Jepson

Jepson

1. Leadership and Management

   • LEADERSHIP: a relationship through which one person influences the behaviour or actions of other people
   • Importance: changing organisational structures & for rapid change
     • Flatter & greater delegation, Teamwork, support.
   • Traditional = commanding Modern = Teamwork
   • Management is doing things right, Leadership is doing the right thing
   • Senior management
     • Set corporate objectives & strategic decisions
   • Middle management
     • Accountable for the senior management
     • Run business functions and departments
   • Junior management
     • Supervises
     • accountable for middle management
     • Monitor and control day-to-day tasks
     • Manage a team of workers

2. Leadership styles

   • Authoritain/autocratic
     • where a leader delegates policies, procedures and goals to be achieved and has full control
     • Strong Motivation. Decisions made quickly
     • one wrong decision can cost the business. Responsibility
     • Staff arent involved
   • Paternalistic
     • Make decisions in your interest.
     • A bond. Employees are truthful
     • Dictatorship. poor decision making
     • Treat as Family
   • Democratic
     • Ideas move freely.
     • Strong teams are built.
     • Lots of ideas made
     • Uncertainty. Time consuming.
   • Laissez Faire
     • Leave well alone. Only there when needed.
     • Keeps them motivated
     • self manage
     • Employees may not be high skilled

3. Blake Mouton Material Grid

   • Impoverished
     • Lacking in skills
     • No interest
   • Produce or perish
     • Team are at a means to an end.
     • Strict work rules
   • Middle of the Road
     • Not effective
     • Dont inspire
   • Country club
     • More concerned on needs and feelings
     • Fun and relaxed work.
     • No direction
   • Team management
     • Organised
     • Motivate
     • Trust and respect
   • How to use it
     • 1) identify leadership style
     • 2) ways to improve and develop skills
     • 3) put the grid to context

4. Tannenbaum schmidt continuum

   • Autocratic to delegates
   • Employees can get involved
   • Stonger bond they trust each other
   • You need a good manager/employee bond

5. Stakeholder mapping

   • STAKEHOLDER: someone with involvement or interest within a business
   • Considers those who can affect and will be affected
   • identify who the most important stakeholders are
   • Avoid negative publicity
   • Should be focusing on the stakeholders with higher shares

6. Decision making

   • Hunch: intuition, gut feeling
   • Scientific: based on data
   • Opportunity cost
     • Cost of missing out on next best alternative.
     • Resources are limited

7. Stakeholders

   • STAKEHOLDER: an individual or organisation who has vested interest in activities and decision making
   • e.g. shareholders, managers, suppliers
   • Can work for or transact
   • internal (employees), connected, external

8. Finance

   • REVENUE (sales) = Quantity X Price
   • TOTAL COST = Fixed + Variable
   • PROFIT = Revenue - Total cost

9. Measurement and importance of profit

   • PROFIT: the reward or return for taking risks and making investment
   • Measures the business success
   • Made by the £value earned or sales/investments made
   • GROSS PROFIT = Revenue - cost of sales
   • OPERATING PROFIT = gross profit - expenses & overhead
   • GROSS PROFIT MARGIN = gross profit / revenue (X100)
   • OPERATING PROFIT MARGIN = operating profit / revenues (X100)
   • Operating profit tells us how effectively sales turned into profit. Value.
   • RETURN ON INVESTMENT = operating profit (net profit) / capital invested (X100)

10. Ways to improve profitability

    • Increase Quantity sold
      • Better use of capacity
      • Higher market share
    • Increase selling price
      • Max value extracted
      • But competitors respond
    • Reduce variable costs per unit
      • Inc value per unit sold
      • But could mean low quality inputs
    • Increase production Output
      • Spreads fixed costs over greater units
      • Dangerous if no demand
    • Reduce fixed costs
      • Reduces break-even output
      • Reduce ability to inc sales

11. Financial objectives

    • FINANCIAL OBJECTIVE = a specific goal or target relating to the financial performance, resources and structure of a business
    • Provides a focus
    • Reduces failure
    • Context for making investment decisions.

12. cash flow forecating

    • Used to predict inflow & outflows
    • enables business to identify cash flow shortages
    • OPENING BALANCE = money carried forward from previous month
    • CASH INFLOW = money from sales or interest flowing into the business
    • CASH OUTFLOW = money covering wages, rent, advertising.
    • NET CASH FLOW = inflow - outflow
    • CLOSING BALANCE = opening + net cash flow
    • Why produce it?
      • Advanced warning of cash shortages
      • To see if the business can afford to pay people
      • For financial control
      • Too reassure investors that business is managed properly
    • Problems with it
      • Over trading - growing the business too fast
      • Sales lower than expected
        • over optimistic
        • market reaches gaps
      • if customers don't pay on time
      • costs prove higher
      • How to manage these problems
        • Make and act on reliable cash flow forecasting
        • Manage working capital effectively.
        • Choose right sources of finance
        • Dont allow customers too much trade credit.

13. Breakeven analysis

    • CONTRIBUTION = selling price - variable cost per unit
    • CONTRIBUTION PER UNIT = selling price per unit - variable costs per unit
    • TOTAL CONTRIBUTION = contribution per unit X number of units sold
    • PROFIT = contribution - fixed costs
    • Breakeven Output
      • Calculated by: Table, Formula or graph
      • Assumptions
        • Selling price per unit stays the same
        • Variable costs direct proportion to output
        • Fixed costs stay the same
      • BREAKEVEN occurs when CONTRIBUITION = FIXED COSTS
      • BREAKEVEN OUTPUT (UNITS) = fixed costs / contribution per unit

14. Budgeting

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