Business Admin-operations and administration

In this session we focused on the last section of the business admin module-operations and administration. 


What is the role of the Administrative Manager?

• Ensuring that market information is collected
• Examining work practices
• Assisting in the recruiting and training of staff
• Auditing existing work practices to ensure compliance
• Ensuring that all stationery, diaries, calendars etc carries  the correct information

Centralisation and decentralisation
A decision has to be made whether to centralise or decentralise the duty of an administrative manager


The following are some of the advantages of centralisation

•  It concentrates the work into one area which mininises costs
• It avoids duplication of effort
• It avoids confusion regarding area responsibility and the location of information
• It allows for the sharing of standard technology such as computers and printers
• It is easier to control by one manager

Decentralisation

• can place clerical work closer to the practical work to which it relates
• Organisations that have a wide geographical spread may require an administrative function in each area to properly service the target audience

The next issue that needs to be considered is the layout of the office. This can be open plan or single offices
Before choosing the layout the following should be considered:

1. Space requirements
2. Open plan design
3. Number of staff
4. Storage requirements
5. Placement of machinery

Business Administration-Production

This week we looked at the production process and how to layout a production facility.  There are a number of factors that need to be considered prior to designing a production facility.  These are:

1. The production process itself
2. Where are the inputs coming from?
3. What method of material handling will be required?
4. Process layout
5. Production layout

All companies should be involved in research and development to help them develop a new product or service to meet the changing needs of their customers/clients.  There are a number of stages involved in developing a new product or service.  These include:

1. Idea generation
2. Idea screening
3. Concept development and testing
4. Market strategy
5. Business analysis
6. Product development
7. Test marketing
8. Commercialisation

EC-Business to Customer

Last week we concentrated on business to business e-commerce.  Today we will focus on business to consumer.  With a predicted growth rate of 14% business to consumer e-commerce, it is essential that companies understand the importance of e-commerce in their business. 
What sells well on the Net-books, CDs, clothing, holidays etc. 

There are a number of enablers and limiters of e-tailing. 

Enablers:

1. Product category
2. Access to information
3. Access to price information
4. Novelty
5. Accessibility
6. Convenience 

Limiters

1. Lack of trial
2. Lack of interpersonal trust
3. Lack of instant gratification
4. High shipping and handling costs
5. Lower customer service
6. Loss of privacy and security
7. High economies of scale
8. Lack of a stable customer base
9. Poor logistics
10. Lack of experience
11. Lack of in-store shopping experience

Are there any consequences associated with e-tailing?
There are a number of consequences that e-tailers have to be aware of.  These are:

1. It can increase intertype competition
2. It can lead to conflict between channel members
3. It can lead to price competition

As mentioned earlier there are some servies or products that sell very well on the Internet.  In class we focused on the following

• Recruitment
• Travel and tourism
• Banking
• Grocery
• Entertainment

Another aspect of business to consumer e-commerce is the ability to understand the behaviour of consumers online.  Is there a difference in the behaivour of offline consumers and online consumers?????????? 

During the next session we will look at a model of consumer behaviour online

Market Research-Observation

In this session the focus was on observation.  Ideally, observation should not be used in isolation.  The following are the methods of observation used in research.

1. Natural/contrived situations
2. Open/disguished 
3. Structured/unstructured
4. Human/machine
5. Direct/indirect

There are a number of advantages of observation.

1. Allows you to get a feel for how the respondent actually behaves
2. If the respondent fails to respond, the researcher can still observe their behaviour
3. Some forms of data are gathered more quickly by observing

Disadvantages

1. Can't question the behaviour
2. Observation research can be timely and costly
3. Behaviour display today may not be a reliable indicator for future behaviour

Business Administration-Human Resource Management

A manager should remember that people are the ultimate resource in the organisation.  At present there are a number of challenges facing Human Resource Managers.  These challenges include:

1. Dynamic Global Competition
2. Technology and the importance of the knowledge economy
3. Demographics
4. Legal and political changes

There are a number of factors that should be considered when developing a human resource plan, these include:

• Understanding the corporate objective
• Analyse current human resources
• Estimate future needs-conduct a demand and supply analyses
• Develop action plans for recruitment, selection and induction

Recruitment and Selection
This process is concerned with the finding, assessing and engaging new employees.  Prior to designing the recruitment advertisement it is necessary to focus on creating a job analysis.  This involves focusing creating a job description, person specification and terms and conditions of employment.  A job description identifies the scope, duties and responsibilities attached to the job.  The person specification identifies the traits and abilities that the ideal candidate should have.  A HR manager can identify the ideal and desireable traits the ideal candidateshould have.  The terms and conditions have to be identified before the contract is signed.

Once a number of CVs or application forms have been processed a small number of candidates will be chosen.  The find the right candidate a number of selection methods could be used.  These include:

• Intelligence tests
• Aptitude tests
• Proficiency
• Personality tests
• Interview and reference checks

Once the ideal candidate has been chosen there is a placement and induction process.

Motivation and reward
How do you motivate your staff?  What types of rewards are used to motivate staff?  Does money really motivate??

There are three main theories of motivation and these are:

• McGregor's Theory X and Theory Y
• Herzberg Two Factor Theory
• Vroom's Expectancy Theory

A new employee will go through an appraisal process possibly within twelve months of starting in the organisation.  The main reasons why an appraisal is undertaken is as follows:

• It identifies whether people are performing at a satisfactory level
• Determining if additional training is needed
• Identify potential in existing employees
• Provide input into the reward system
• Enables more effective communication between management and employees

Training and development
Training is for the here and now-to acquire skills that are necessary for the job.  Development is for the future.  Some training courses take place within the company such as manual handling and health and safety training.  More specialised training may take place in training centres, colleges or universities. 

Business Administration-Finance

In this session we focused on some financial controls that are commonly used in organisations. 
We tend to use trading profit and loss accounts and balance sheets to understand the use, flow and control of organisational assets.
There are three main categories of financial controls, these are:

1. Budgetary controls
2. Break even analysis
3. Ratio analysis

Budgetary controls
Budgeting is used to express in quantifiable terms, plans for a particular future period.  There are four main types of budgetary controls:

1. Revenue and expense budgets
2. Time, space, material and production budgets
3. Cash budgets
4. Capital expenditure budgets

Break even analysis

When calculating the break even point it is necessary to look at fixed and variable costs.  The break even analysis aims to identify the point at which it becomes profitable to produce a product or service.  There are a number of reasons why an organisation conducts a break even analysis:

• It facilitates long term planning
• It can identify the minimum sales or volume of business that the organisation must achieve to remain in profit.
• It also provides essential information for decision making such as which products to eliminate.

Ratio Analysis
There are four main types of financial ratios which include:

1. Liquidity
2. Activity Ratios
3. Profitability
4. Leverage or gearing ratios

Liquidity Ratios
These ratios measure the organisation's financial stabilty.
These are two common types of liquidity ratios:

1. Current ratio
2. Acid test ratio

The formulae for current ratio is:
Current Assets
___________
Current Liabilities


Assets Test Ratio

Quick Assets (current assets less stock)
_______________________________
Current Liabilities


Activity Ratios
These indicate how efficiently an organisation is using its resources.  The three main ratios we covered were:

• Inventory turnover
• Debtors to sales ratio
• Creditors turnover

Profitability Ratios
This informatoin can be found in the profit and loss accounts.

Leveraging and Gearing Ratios
This looks at the long term funding of the organisation.  There are three main gearing ratios:

1. Debt ratio
2. Debt equity ratio
3. Times interest earned ratio

Market Research-Exploratory Research Design: Secondary Data

In this session we focused on secondary data.  There are two forms of secondary data:

• Internal
• External

Examples of internal include:

• Invoices
• Shipping records
• Sales reports
• Customer service reports

External sources include:

• Reports produced by government departments
• Reports produced by market research firms
• Directories

What are the advantages and disadvantages of secondary data

Advantages

1. Cost-in some cases there is a little or no cost involved in accessing secondary data-i.e. CSO statistics from the CSO website
2. Completedness-data can be more detailed than primary research data
3. Timeliness-secondary data can be accessed quite quickly from the Internet

Disadvantages

1. Data bias-there is the possibility that the same data can be interpreted differently
2. Data accuracy-how was the data collected
3. Is the data useful?

We will focus on observation next week.

Business Administration-Control

For this session we focused on the management function of control.  What is the importance of control in the work place?  Control enables a manager to prevent negative events from happening and it also enables management to keep staff and groups on track to achieving specific company goals and objectives. 
In order for control to be effective managers must set standards, measure performance against standards, analyse results and give feedback and if necessary correct any mistakes and prevent them from happening in the future.

There are a number of characteristics that should be present to ensure effective control in an organisation.  These are:

• The control system must be understandable
• The control system must be related to decision centres and conform to organisational structure.
• It must identify any deviations/exceptions
• It must identify critical activities
• The control system must have flexibility
• The control system must be consistent
• It must be cost effective
• The control system must be reviewed on a regular basis

In order for the control system to be effectively implemented the following must be present:

• There must be consultation and participation from all employees in the organisation
• Motivation-why should the employees implement/conform toa new control system
• Groups and informal organisation must also be taken into consideration
• Before implementing the control system the organisational structure must analysed in detail
• Leadership styles can have a profound impact on whether a control system is implemented correctly
• MBO

Within an organisation there are two forms of control which are:

• Financial control
• Non-financial control

For this session we will focus on non-financial controls.  Next week we will focus on financial forms of control.

Non financial forms of control

• Gantt Charts

(http://www.ganttchart.com/)

• PERT analysis

Task ID	Task Description	Prerequisites	Optimistic Duration	Most Likely Duration	Pessimistic Duration
1	Build internal components	none	1	2	3
2	Modify roof and floor	none	2	3	4
3	Construct collection stack	1	1	2	3
4	Pour concrete and install frame	2	2	4	6
5	Build high-temperature burner	3	1	4	7
6	Install control system	3	1	2	9
7	Install air pollution device	4, 5	3	4	11
8	Inspection and testing	6, 7	1	2	3

(http://www.waa-inc.com/projex/examples/pert_eg2b.htm)

• Management audits
• Inventory control
• EOQ-Economic order quantity
• Production control
• Quality control (Six sigma and TQM)

Market Research-market segmentation

For this session we how to use market research for market segmentation.  There are a number of bases that can be used to segment a market.  These include:

• Demographic
• Geographic
• Geodemographic
• Psychographic
• Behavioural
• Benefit
• Occasions of use

Once a segment has been selected it is necessary to focus on the size and growth of the market, the attractiveness of the segment and company objectives and resources.
Once a market has been segmented then the company can target their customers.  When a company is choosing a target market strategy it is necessary to conduct research on the company's resources such as manpower, capital, capabilities and skills and also the degree of product variability.

Once the target strategy has been selected it is then necessary to focus on how the company wants to position their product or service.  There are a number of ways that a company can position their product/service.  These are:

• The features of the product or service
• Usage category
• Benefits of the product or service
• Specific usage occassions
• Against competition