Business Models Theories And Techniques Commerce Essay

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Abraham Maslow developed a theory which was about personality, which has influenced a number of different fields it also includes education. Maslow's theory accurately describes many realities or personal experiences (a model of human needs).Many people find that they can understand and relate to what Maslow's says. They tend to recognize some features of their behaviour or experiences which is true and identifiable.

Maslow has set up a Hierarchy Theory of Needs which is set up in five different stages/levels of basic needs. Beyond these needs, higher levels of needs exist. These include needs for understanding, appreciation and purely spiritual needs, it is expected that the person will not feel the second need until the demands of the first need has been satisfied, and the third need until the second has been satisfied and so on. Maslow's Hierarchy needs are as follows:

Physiological Needs

These are the biological/essential needs. They consist of needs of oxygen, food, water and relatively constant body temperature. These are the strongest needs because if a person was deprived of all needs, the physiological ones would come first in the person's search for satisfaction.

Safety Needs

When all the physiological needs are satisfied and are no longer controlling the thoughts and behaviours, the needs for security can then become active. Adults have little awareness of their security needs expect in times of an emergency or periods of disorganisation in the social structure (such as arguing). Children often show the signs of insecurity and the need to be safe.

Needs of Love, Affection and Belongingness

When the needs of safety and for physiological wellbeing are satisfied, the next level of needs for love, affection and belongingness can emerge. Maslow states that people seek to overcome the feelings of loneliness and alienation. This also involves both giving and receiving love, affection and the sense of belonging.

Needs For Esteem

When the first three levels of needs are satisfied, the needs for Esteem can become dominant. These involve needs for both self-esteem and for the esteem a person gets from others. People have a need for a firmly based, stable, high level of self respect, and respect from others. When these needs are satisfied, the person will feel self confident and valuable as a person in the world. When these needs of the person become frustrated, the person may feel weak, worthless and helpless.

Needs For Self-Actualisation

When all of the foregoing needs are satisfied, then and only then the needs for self-actualisation can be activated. Maslow describes self-actualisation as a person's need to be and do that which the person was "born to do". Example "an artist must paint and a poet must write." These needs makes themselves feel signs of restlessness. The person may feel on edge, tense, lacking something and restless. If a person is hungry, unsafe, unloved or accepted or lacking self-esteem, it is very easy to know what the person is restless about. It is sometimes not always clear what a person wants when there is a need for self-actualisation.

The hierarchic theory is represented as a pyramid, with the larger, lower levels representing the lower needs, and the upper point representing the need for self-actualisation. Maslow believes that the only reason that people would not move well in direction for self-actualisation is because of hindering placed in their way by society.

Workforce Environment

In the workforce, if Maslow's theory is true, there are some very important leadership implications to enhance workplace motivation. There are staff motivation opportunities by motivating each of their style of management, role, company activities and compensation plans.

As a result, adequate workforce motivation requires important leadership that understands which needs are active for each individual employee's motivation. Abraham Maslow's model indicates that the basic low-level needs such as safety and physiological requirements must be satisfied before the employee can move onto the higher-levels such as self-fulfilment to pursue that need. The model is displaying that once a need has been satisfied it no longer motivates the employee and then they will move to the next higher level to satisfy that need.

Here are the levels of Maslow's Hierarchy Theory of Needs, and how employers can motivate their employees on each level:

Physiological Motivation: Provide sufficient breaks for lunch and pay salaries that allow workers to buy life's essentials.

Safety Needs: Provide a working environment which is safe, relative job security, and freedom from threats.

Social Needs: Generate a feeling of acceptance, belonging, and community by reinforcing team dynamics.

Esteem Motivators: Recognise achievements, assign important projects, and provide status to make employees feel valued and appreciated.

Self-Actualization: Offer challenging and meaningful work assignments which enable innovation, creativity, and progress according to long-term goals.

Employers need to remember that not everyone is motivated by the same needs, and not everyone necessarily follows the order of levels for their needs. At various points in their lives and careers, different employees will be motivated by completely different needs. It is vital that employers identify each of their employee's needs currently being pursued.


Problems with the Maslow Theory

There are several problems with the Maslow model when real-life working practice is considered they are the individual behaviour seems to respond to several needs (not just one), the same need (e.g. the need to interact socially at work) may cause quite different behaviour in different individuals, there is a problem in deciding when a level has actually been "satisfied", the model ignores the often-observed behaviour of individuals who tolerate low-pay for the promise of future benefits. Even though Maslow's Hierarchy is straightforward and easy to understand, there is little experiential evidence to support the model. Some critics suggest that Maslow's model is only really relevant to understanding the behaviour of middle-class workers in the UK and the USA (where Maslow undertook his research).

Research shows that in some cultures, social needs are placed more primarily than any others. Maslow's Hierarchy also fails to explain that some people will sacrifice their physiological needs such as food to pursuit their goals. Furthermore, there is little evidence that suggests that people satisfy fully one motivating need at a time, other than situations where needs clash.

Though scientific support fails to reinforce Maslow's Hierarchy, his theory is very popular in some organisations as it has been introduced to managers as motivation.



Definition of a Business Model:

"A Business Model is a description of the operations of a business including the components of the business, the functions of the business and the revenue and expenses that the business generates."


The Marketing functional area can use PESTLE Analysis.

PESTLE Analysis is a useful tool for understanding the company situation as a whole; it is also used very often in combination with the SWOT analysis to assess the situation of an individual organisation.

PESTLE stands for:

Political - Political factors influence organisations in many different ways. Political factors can create opportunities and advantages in organisations. On the other hand they can also place duties and obligations on organisations.

Economical - Economical factors of Global and National affect all organisations. Global and National interest rate and financial policy will be set around economic conditions. The climate of the economy will dictate how consumers, suppliers and creditors behave within society.

Sociological - Sociological factors focuses within the society such as family, friends, neighbours, colleagues etc. These forces shape who people are, the way people behave and the way people purchase.

Technological - Technological factors have changed in a positive way over the years, which have also changed the way many organisations operate. Organisations use technology in different ways such as technology infrastructure, technology systems and technology hardware.

Legal - Legal factors are the changes to legislation. This could have an impact to resources, taxation, employment, imports and exports.

Environmental -

The PESTLE analysis aims to summarise and identify environmental influences on an organisation.

PESTLE analysis involves identifying the Political, Economic, Socio-Cultural and Technological influences on an organisation, providing a way of auditing the environmental influences that have impacted the organisation in the past and how they could improve and do in the future.


It is very important than an organisation considers its environment, before making the marketing process. The environmental analysis needs to be continuous and feed all the aspects of planning.

The Organisation's marketing area/environment is made up of:

The Internal Environment - for example, the staff (internal customers), finance, wages and office technology etc.

The Micro-Environment - for example, external customers, suppliers, competitors, agents and distributors etc.

3. The Macro-Environment - for example, Political forces, Economic forces, Sociological forces, and Technological forces, Legal forces. These are known as PESTLE factors.


Comprised Of


- Grants, funding and initiatives

- Future taxation policy

- Current taxation policy

- Effect of wars or worsening relations with particular countries

- The current and future political support

- Trade bodies


- Overall economic situation

- Current and future levels of government spending

- Strength of consumer spending

- Current and future level of interest rates, inflation and unemployment

- Ease of access to loans

- Specific taxation policies and trends

- Exchange rates



- Social mobility

- Media views and perceptions

- Attitudes towards issues such as education, corporate responsibility and the environment

- Ethnic and religious differences

- Lifestyle patterns and changes


- Global communication technological advances

- The level of research funding

- The ways in which consumers make purchases

- Intellectual property rights and copyright infringements

- Relevant current and future technology innovations


- Trading policies

- Future legislation changes

- Changes in European law

- Regulatory bodies

- Legislation in areas such as employment, competition and health & safety


- Attitudes to the environment from the government, media and consumers

- Current and future environmental legislative changes

- The level of pollution created by the product or service

- Recycling considerations


Workforce Environment

PESTLE can be used in the workforce as a checklist or brainstorm to consider and also a prompt analysis of the different influences. The Model can also be used in an organisation to guide and inform further analysis, in doing so the organisation can find out a few questions on which they can asses themselves such as:

Which of the PESTLE factors are affecting the organisations?

Which of the PESTLE factors are the most important at the present time? Or could be in the next few years?

Looking at PESTLE analysis and SWOT analysis, you can gather that they are somewhat similar. Every element of PESTLE analysis can use every element of SWOT analysis to create a greater powerful analysis technique.

For example, an organisation can make an analysis of Sociological/Socio-Cultural strength, Sociological/Socio-Cultural weakness, Sociological/Socio-Cultural opportunity and Sociological/Socio-Cultural threat. In doing so, the orgnasation has used SWOT analysis to help them analyse the Sociological/Socio-Cultural element of the PESTLE analyis. They can obviously do this for the other five elements of this.

By combining the PESTLE analysis with a SWOT analysis, organisations can immensely increase the power of your analysis technique.

Tesco's PESTLE Analysis

External Factors of PESTLE analysis have been crucial in Tesco's success, this is because Tesco have taken into account the implications for employees, consumers, associated organisations, stakeholders and including the company's mission statement.

Politically, the Credit Crunch has lead to a high number of unemployment. As Tesco is one of the largest and quickest growing retailers, more jobs have been available with Tesco which has helped reduce the levels of unemployment. Using PESTLE analysis is keeping Tesco updated with their environmental atmosphere. Although Tesco's overwhelming physical presence is one of Tesco's competitive advantages at present, there are issues about the competition of other organisations. There are other laws and regulations governing competition and monopolies as well as polices which would be identified through a PESTLE analysis.

The PESTLE analysis of Tesco examines the main external factors impacting the company.

Tesco's Political Factor - It can be national, local or international. Many governments could be involved. For example, Tesco might have to deal with the British and Columbian politics in regards to its coffee supply.

Tesco's Economical Factor -It has a large impact, in the stock market Fluctuations and tax increases which can have a serious affect the bottom line of the company.

Tesco's Sociological Factor - This can vary from the impacts of fashion, to immigration.

Tesco's Technologies Factor- Tesco have had a major impact on this factor, they have online shopping and provide a delivery service which has become a key factor in Tesco's recent success. They have done this by using their company website of

The changes caused by all the external impacts lead to numerous legal problems. A large organisation has an environmental impact, Tesco uses fossil fuel in its transportation network. To reduce this demand is a major challenge.


The PESTLE analysis is so vital to the development and the success of the company of Tesco's in addition to the daily management of each store in line with strategic decisions. If a organisation does not know its external factors, it may find it hard to handle the business in an effect and efficient manner.

Advantages Of PESTLE

It is simple and it is less time consuming.

It provides an understanding of the business environment.

It can help an organisation to anticipate their future difficulties and take rapid action to avoid or to minimise their effect.

It may also raise awareness of threats to a project.

It can help an organisation to spot its opportunities and exploit them.

It can encourage the development of strategic thinking.

Disadvantages Of PESTLE

It can collect large amounts of information which may make it difficult to see what needs to be corrected in the organisation.

As the society changes rapidly, it makes it increasingly difficult to anticipate developments that may affect an organisation in the future.

It is sometimes created as a simple list and not critically presented.

The analysis could be based on


Human Resources (HR)

Definition of a Technique is:

The HR functional area can use Job Rotation

Job rotation is the method of motivating staff especially those who work in teams; it motivates them because it gives the worker something more to do, other than just one job/task. Although each team member may have set tasks each member will be rotated through all the tasks that each team member performs.

Job rotation is practiced to allow qualified employees to gain extra insights into the processes of an organisation, which will decrease the level of boredom and also increase job satisfaction through job variation. Job rotation can furthermore be about changing employees scheduled in offices, particularly in public offices.

At senior management levels, job rotation frequently referred to as management rotation which is closely linked to success planning as employees will develop other skills as learning experience. For lower management levels, job rotation usually two purposes which are:

Promotability (Employee motivation)

Skill enhancement (Skills shortages and skills gaps)

This benefits the employer because its staff will experience different range of roles or tasks which makes the employee more motivated, each team member will learn a range of skills and they have better skill work course. It may lead to a loss of output in the short-term as workers are learning new jobs and settling in.

Workforce Environment

In a retail environment a sales assistant may be on the shop floor for periods of time tiding it up, helping staff, helping customers, clearing the fitting rooms, serving on the till and working in the stock room.

In a health environment, there are some hospitals who have made their nurses practise job rotation, this has become more of a process of individual growth, involving improvements of the employees.

Advantages of Job Rotation

Disadvantages of Job Rotation


In comparison, organisations can all apply a business model, theory and technique to their companies. It is a matter of figuring out which model, theory and technique would be more suitable for them.


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How did you go about 'researching'?

What problems did you encounter?

How did you overcome those problems?

What types of information did you gather?

Talking about what worked for me and what didn't work for me - business school