introduction to business
1.1 Introduction to business management
What is a business?
A business is a decision-making organisation that uses resources to meet the needs of customers by providing a product or service that they demand.
What do business do?
Businesses identify the needs of consumers or other firms. They then purchase resources, which are the inputs of the business or factors of production, in order to produce output. The 'outputs' of a business are the goods and services that satisfy consumers' needs, usually with the aim of making a profit.
The role of businesses in combining human, physical and financial resources to create goods and services.
All Businesses have what are known as factor inputs that are put into the production process in order to generate output.
Land – this general term not only includes land itself but all of the renewable and non-renewable resources of nature, such as coal, crude oil and timber.
Labour – manual and skilled labour make up the workforce of the business. Some firms are labour intensive, that is they have a high proportion of labour inputs to other factors of production, e.g. house cleaning services. Human capital refers to the quality of labor resources, which can be improved through investments in education, training and health.
Capital – this consists of the finance needed to set up a business and pay for its continuing operations as well as all of the man-made resources used in production. These include capital goods such as computers, machines, factories, offices and vehicles. Some firms are capital intensive, that is they have a high proportion of capital to other factors of production, e.g. power stations. Capital as a FOP is the ONLY exception in business and management where it does not refer to money.
Enterprise – this is the driving force of business, provided by risk-taking individuals, which combines the other factors of production into a unit that is capable of producing goods and services, It provides a managing, decision-making and co-ordinating role. Without this essential input, even very high quality land, labour and capital inputs will fail to provide the goods and services that customers need.
The main business functions and their roles:
• human resources
• finance and accounts
• marketing
• operations.
Most businesses have four functional departments. These will be staffed by people with specific qualifications skills and experience in the work of the functional areas. A small business entrepreneur may have to cover all of these functions by themselves or outsource these functions to specialist firms.
HUMAN RESOURCE MANAGEMENT
The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational objectives. It includes planning for and forecasting staff requirements and managing recruitment and selection. The HR team ensures that managers apply HR policies and procedures consistently across the business.
FINANCE
Finance is the management of money and credit and banking and investments. The accounts and finance section also provides the business with an array of tools for keeping track of cash flows, judging the viability of an investment and being able to prepare and analyse a financial records to both report on and evaluate the health of a business. Financial accounts deal with financial transactions, such as profit and loss accounts. These satisfy the organisation's legal financial requirements. Management accounts look forward and contribute to the strategic decision making process by forecasting financial performance.
MARKETING
The commercial processes involved in creating and designing, promoting and selling and distributing a product or service. The management task that links the business to the customer by identifying and meeting the needs of customers profitably. It does this by getting the right product at the right price at the right place with the right promotion. It also ensures that an organisation's image and brand reflect its high quality and success. The technical team looks for innovative solutions to keep the business's profile high in the market.
OPERATIONS MANAGEMENT
Sometimes referred to as production. Operations management is concerned with supervising, designing and controlling the procedures of the production process. It is the management of processes used to design, supply, produce, and deliver goods and services to customers.
Some typical roles of workers in a business
Managers - organise and plan their departments to exceed the expectation of internal and external customers. They work closely with other managers across the company to promote a range of benefits, including; continuous process improvements, improving accuracy, reducing the need to repeat work and driving up efficiency year on year.
Supervisors - work with managers to ensure that operators apply procedures and practices consistently. This involves using best practice to create value-added services across the business.
Operators - are responsible for day-to-day operations of the business. This is the level at which a university graduate might enter the organisation in order to learn all aspects of the business. The role requires accuracy, efficiency and a high level of individual responsibility.
The role of entrepreneurship (and entrepreneur) and intrapreneurship (and intrapreneur) in overall business activity
Entrepreneurship is the process of starting a business or other organisation. The entrepreneur develops a business model, acquires the human and other required resources i.e. plans, organises and manages a business and is fully responsible for its success or failure. Entrepreneurs are risk takers.
Entrepreneurs have the skills needed to oversee the whole production process, whilst having the ability and willingness to take potentially high risks. Successful entrepreneurs tend to be creative, innovative and passionate. They search for and exploit business opportunities by forecasting and/or responding to changes in the marketplace.
Intrapreneurship is the act of behaving like an entrepreneur but as an employee while working within a large organisation. They represent the initiation and implementation of innovative systems and practices. The intrapreneur is independent, proactive, creative and generates new ideas and innovations to the organisation. Hence, the intrapreneur takes direct responsibility and risks for turning a project or idea into a profitable finished product for the organisation. As the intrapreneur thinks like an entrepreneur looking for business opportunities to increase profits, it is in the best interest of an organisation to encourage intrapreneurship.
What is a business?
A business is a decision-making organisation that uses resources to meet the needs of customers by providing a product or service that they demand.
What do business do?
Businesses identify the needs of consumers or other firms. They then purchase resources, which are the inputs of the business or factors of production, in order to produce output. The 'outputs' of a business are the goods and services that satisfy consumers' needs, usually with the aim of making a profit.
The role of businesses in combining human, physical and financial resources to create goods and services.
All Businesses have what are known as factor inputs that are put into the production process in order to generate output.
Land – this general term not only includes land itself but all of the renewable and non-renewable resources of nature, such as coal, crude oil and timber.
Labour – manual and skilled labour make up the workforce of the business. Some firms are labour intensive, that is they have a high proportion of labour inputs to other factors of production, e.g. house cleaning services. Human capital refers to the quality of labor resources, which can be improved through investments in education, training and health.
Capital – this consists of the finance needed to set up a business and pay for its continuing operations as well as all of the man-made resources used in production. These include capital goods such as computers, machines, factories, offices and vehicles. Some firms are capital intensive, that is they have a high proportion of capital to other factors of production, e.g. power stations. Capital as a FOP is the ONLY exception in business and management where it does not refer to money.
Enterprise – this is the driving force of business, provided by risk-taking individuals, which combines the other factors of production into a unit that is capable of producing goods and services, It provides a managing, decision-making and co-ordinating role. Without this essential input, even very high quality land, labour and capital inputs will fail to provide the goods and services that customers need.
The main business functions and their roles:
• human resources
• finance and accounts
• marketing
• operations.
Most businesses have four functional departments. These will be staffed by people with specific qualifications skills and experience in the work of the functional areas. A small business entrepreneur may have to cover all of these functions by themselves or outsource these functions to specialist firms.
HUMAN RESOURCE MANAGEMENT
The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational objectives. It includes planning for and forecasting staff requirements and managing recruitment and selection. The HR team ensures that managers apply HR policies and procedures consistently across the business.
FINANCE
Finance is the management of money and credit and banking and investments. The accounts and finance section also provides the business with an array of tools for keeping track of cash flows, judging the viability of an investment and being able to prepare and analyse a financial records to both report on and evaluate the health of a business. Financial accounts deal with financial transactions, such as profit and loss accounts. These satisfy the organisation's legal financial requirements. Management accounts look forward and contribute to the strategic decision making process by forecasting financial performance.
MARKETING
The commercial processes involved in creating and designing, promoting and selling and distributing a product or service. The management task that links the business to the customer by identifying and meeting the needs of customers profitably. It does this by getting the right product at the right price at the right place with the right promotion. It also ensures that an organisation's image and brand reflect its high quality and success. The technical team looks for innovative solutions to keep the business's profile high in the market.
OPERATIONS MANAGEMENT
Sometimes referred to as production. Operations management is concerned with supervising, designing and controlling the procedures of the production process. It is the management of processes used to design, supply, produce, and deliver goods and services to customers.
Some typical roles of workers in a business
Managers - organise and plan their departments to exceed the expectation of internal and external customers. They work closely with other managers across the company to promote a range of benefits, including; continuous process improvements, improving accuracy, reducing the need to repeat work and driving up efficiency year on year.
Supervisors - work with managers to ensure that operators apply procedures and practices consistently. This involves using best practice to create value-added services across the business.
Operators - are responsible for day-to-day operations of the business. This is the level at which a university graduate might enter the organisation in order to learn all aspects of the business. The role requires accuracy, efficiency and a high level of individual responsibility.
The role of entrepreneurship (and entrepreneur) and intrapreneurship (and intrapreneur) in overall business activity
Entrepreneurship is the process of starting a business or other organisation. The entrepreneur develops a business model, acquires the human and other required resources i.e. plans, organises and manages a business and is fully responsible for its success or failure. Entrepreneurs are risk takers.
Entrepreneurs have the skills needed to oversee the whole production process, whilst having the ability and willingness to take potentially high risks. Successful entrepreneurs tend to be creative, innovative and passionate. They search for and exploit business opportunities by forecasting and/or responding to changes in the marketplace.
Intrapreneurship is the act of behaving like an entrepreneur but as an employee while working within a large organisation. They represent the initiation and implementation of innovative systems and practices. The intrapreneur is independent, proactive, creative and generates new ideas and innovations to the organisation. Hence, the intrapreneur takes direct responsibility and risks for turning a project or idea into a profitable finished product for the organisation. As the intrapreneur thinks like an entrepreneur looking for business opportunities to increase profits, it is in the best interest of an organisation to encourage intrapreneurship.