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Introduction to Business
Rationale
In economics, Business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate revenue.
The etymology of "business" refers to the state of being busy, in the context of the individual as well as the community or society. In other words, to be busy is to be doing commercially viable and profitable work. The term "business" has at least three usages, depending on the scope — the general usage (above), the singular usage to refer to a particular company or corporation, and the generalized usage to refer to a particular market sector, such as "the record business," "the computer business," or "the business community" -- the community of suppliers of goods and services. The singular "business" can be a legally-recognized entity within an economically free society, wherein individuals organize based on expertise and skills to bring about social and technological advancement. With some exceptions, (such as cooperatives, non-profit organizations and (typically) government institutions), in predominatly capitalist economies, businesses are formed to earn profit and grow the personal wealth of their owners. In other words, the owners and operators of a business have as one of their main objectives the receipt or generation of a financial return in exchange for their work — that is, the expense of time, energy, and money. However, the exact definition of business is disputable as is business philosophy; for example, most Marxists use "means of production" as a rough synonym for "business." Socialists advocate either government, public, or worker ownership of most sizable businesses.
Learning Objectives and OutcomesThis is a non-taught unit designed for self-directed study by those intending to enhance their professional or managerial competence, knowledge, understanding, and skills in business studies. Knowledge After completing the course, students/entrepreneurs will understand the fundamental concepts of
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Planning a Business
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.
Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. When the existing business is to assume a major change or when planning a new venture - a 3 to 5 year business plan is required since investors will look for their annual return in the 3 to 5 year time.
Business EnvironmentTutorials
Readings External Environment: introduction to the external environment A business does not operate in a vacuum. It has to act and react to what happens outside the factory and office walls. These factors that happen outside the business are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. The main factor that affects most business is the degree of competition – how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are: Social – how consumers, households and communities behave and their beliefs. For instance, changes in attitude towards health, or a greater number of pensioners in a population. Legal – the way in which legislation in society affects the business. E.g. changes in employment laws on working hours. Economic – how the economy affects a business in terms of taxation, government spending, general demand, interest rates, exchange rates and European and global economic factors. Political – how changes in government policy might affect the business e.g. a decision to subsidise building new houses in an area could be good for a local brick works. Technological – how the rapid pace of change in production processes and product innovation affect a business. Ethical – what is regarded as morally right or wrong for a business to do. For instance should it trade with countries which have a poor record on human rights. Read more ...
Fundamentals of Effective ManagementTutorials
Readings
Effective Management
Management style makes or breaks a business – a good manager earns respect from staff, and is both fair and approachable.The backgroundThere’s no magic formula to effective management skills – it’s a continual learning process and you will never reach a point when you can say you have learnt all you need to learn. The processTo build an effective management style, start as you mean to go on. Above all, be natural – don’t try to be or become someone you are not. Put clear standards in place and ensure all staff are aware of these – people don’t like surprises and will respond more positively if set rules are in place. Effective management skills are about ensuring that everyone knows what is expected of them. Consider asking your staff to set out the standards they expect and then go through these with them – giving them ownership means they will have already bought into the management process. Look back on your career and think about the managers you reported to. What qualities did you like and can you emulate these? Need to knowEffective managers always give feedback openly – this creates an environment of trust and encourages staff to be open with you in return. And not all feedback is critical – it’s just as important to comment when someone has done something right. Top tipsTo build effective management skills, ensure that you hold regular meetings with your staff – both team and individual ones. Set targets for the next month and examine any issues that arise – this will enable you to revisit how effective your management skills are and if you need to vary your management style. Effective management skills also mean knowing when to admit you have made a mistake – it will ensure the rest of your staff don’t do this and will also make you more human. Read More ...
An organisational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organisational aims.[1] It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.[2] Many organizations have hierarchical structures, but not all. Organizations are a variant of clustered entities.
An organization can be structured in many different ways, depending on their objectives. The structure of an organization will determine the modes in which it operates and performs. Organisational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch, department, workgroup and individual. Organisational structure affects organisational action in two big ways. First, it provides the foundation on which standard operating procedures and routines rest. Second, it determines which individuals get to participate in which decision-making processes, and thus to what extent their views shape the organization’s actions.
Production ManagementTutorials
Readings Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs (in the forms of materials, labour, and energy) into outputs (in the form of goods and/or services). The relationship of operations management to senior management in commercial contexts can be compared to the relationship of line officers to the highest-level senior officers in military science. The highest-level officers shape the strategy and revise it over time, while the line officers make tactical decisions in support of carrying out the strategy. In business as in military affairs, the boundaries between levels are not always distinct; tactical information dynamically informs strategy, and individual people often move between roles over time. Operations traditionally refers to the production of goods and/or services separately, although the distinction between these two main types of operations is increasingly difficult to make as manufacturers tend to merge product and service offerings. More generally, operations management aims to increase the content of value-added activities in any given process. Fundamentally, these value-adding creative activities should be aligned with market opportunity (through marketing) for optimal enterprise performance. According to the U.S. Department of Education, operations management is the field concerned with managing and directing the physical and/or technical functions of a firm or organization, particularly those relating to development, production, and manufacturing. Operations management programs typically include instruction in principles of general management, manufacturing and production systems, plant management, equipment maintenance management, production control, industrial labour relations and skilled trades supervision, strategic manufacturing policy, systems analysis, productivity analysis and cost control, and materials planning.[1][2] Management, including operations management, is like engineering in that it blends art with applied science. People skills, creativity, rational analysis, and knowledge of technology are all required for success.
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Motivating EmployeesTutorials
Readings When you think about it, the success of any facet of your business can almost always be traced back to motivated employees. From productivity and profitability to recruiting and retention, hardworking and happy employees lead to triumph.
Unfortunately, motivating people is far from an exact science. There's no secret formula, no set calculation, no work sheet to fill out. In fact, motivation can be as individual as the employees who work for you. One employee may be motivated only by money. Another may appreciate personal recognition for a job well done. Still another may work harder if she has equity in the business. But you can boil down employee motivation to one basic ideal: finding out what your employees want and finding a way to give it to them or to enable them to earn it. Here we've gathered some of the best and most interesting motivational techniques used by successful entrepreneurs. We hope they'll motivate you, too. Corporate Culture
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A performance appraisal, employee appraisal, performance review, or (career) development discussion[1] is a method by which the job performance of an employee is evaluated (generally in terms of quality, quantity, cost, and time) typically by the corresponding manager or supervisor. A performance appraisal is a part of guiding and managing career development. It is the process of obtaining, analysing, and recording information about the relative worth of an employee to the organization. Performance appraisal is an analysis of an employee's recent successes and failures, personal strengths and weaknesses, and suitability for promotion or further training. It is also the judgement of an employee's performance in a job based on considerations other than productivity alone.
Strategy FormulationTutorials
Readings
In the field of business administration it is useful to talk about "strategic alignment" between the organization and its environment or "strategic consistency." According to Arieu (2007), "there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context." Strategic management includes not only the management team but can also include the Board of Directors and other stakeholders of the organization. It depends on the organisational structure.
Accounting and FinanceTutorials
Readings Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making business decisions.
Investment has different meanings in finance and economics. In Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time.[1] In contrast putting money into something with an expectation of gain without thorough analysis, without security of principal, and without security of return is speculation or gambling.
Investment is related to saving or deferring consumption. Investment is involved in many areas of the economy, such as business management and finance whether for households, firms, or governments. To avoid speculation an investment must be either directly backed by the pledge of sufficient collateral or insured by sufficient assets pledged by a third party. A thoroughly analysed loan of money backed by collateral with greater immediate value than the loan amount may be considered an investment. A financial instrument that is insured by the pledge of assets from a third party, such as a deposit in a financial institution insured by a government agency may be considered an investment. Examples of these agencies include, in the United States, the Securities Investor Protection Corporation, Federal Deposit Insurance Corporation, or National Credit Union Administration, or in Canada, the Canada Deposit Insurance Corporation. Promoters of and news sources that report on speculative financial transactions such as stocks, mutual funds, real estate, oil and gas leases, commodities, and futures often inaccurately or misleadingly describe speculative schemes as investment. Investment: thorough analysis and security. Speculation: analysis and some risk. Gambling: lack of analysis and lack of safety.
Information Systems and TechnologyTutorials Readings Information Systems (IS) is an academic/professional discipline bridging the business field and the well-defined computer science field that is evolving toward a new scientific area of study.[4][5][6][7] An information systems discipline therefore is supported by the theoretical foundations of information and computations such that learned scholars have unique opportunities to explore the academics of various business models as well as related algorithmic processes within a computer science discipline.[8][9][10] Typically, information systems or the more common legacy information systems include people, procedures, data, software, and hardware (by degree) that are used to gather and analyse digital information.[11][12] Specifically computer-based information systems are complementary networks of hardware/software that people and organizations use to collect, filter, process, create, & distribute data (computing).[13] Computer Information System(s) (CIS) is often a track within the computer science field studying computers and algorithmic processes, including their principles, their software & hardware designs, their applications, and their impact on society.[14][15][16] Overall, an IS discipline emphasizes functionality over design.[17]
As illustrated by the Venn Diagram on the right, the history of information systems coincides with the history of computer science that began long before the modern discipline of computer science emerged in the twentieth century.[18] Regarding the circulation of information and ideas, numerous legacy information systems still exist today that are continuously updated to promote ethnographic approaches, to ensure data integrity, and to improve the social effectiveness & efficiency of the whole process.[19] In general, information systems are focused upon processing information within organizations, especially within business enterprises, and sharing the benefits with modern society.[20]
Risk ManagementTutorials
Readings Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1] or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures (at any phase in development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack from an adversary or events of uncertain root-cause. Several risk management standards have been developed including the Project Management Institute, the National Institute of Science and Technology, actuarial societies, and ISO standards.[2][3] Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety.
The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect or probability of the risk, or even accepting some or all of the consequences of a particular risk. Certain aspects of many of the risk management standards have come under criticism for having no measurable improvement on risk, whether the confidence in estimates and decisions seem to increase.[1]
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Business FunctionsTutorials
Readings A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It often can be visualized with a flowchart as a sequence of activities with interleaving decision points or with a Process Matrix as a sequence of activities with relevance rules based on the data in the process.
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