U111 B I nt roduction to Business Organization What is Business? o
September 15, 2010
The sum total of all activities involved in the creation and distribution of goods
and services for private property P rimary Activities of a Business Creation Operations P roduction Distribution Getting the good/service into the hands of consumers
(Marketing [everything including the promotion, coming up with distribution network, etc.]) Ancillary (Secondary) Activities of a Business Activities that facilitate or make possible the performances of the P rimary
Activities o o o Accounting Helps Marketers to market effectively and efficiently F inance Responsible to generate the necessary funds Human Resource Responsible for hiring, recruiting, training
individuals o o Information Technology Legal
P rofit Motive Differentiates business from economic activities
Business 111 Course Model (BBA Program Model) o What is a Model? Simplification of Reality Sequential step of procedures/policy
o
A representation of reality
Characteristics of a Good Model? Helps to simplify our understanding of what would otherwise be a very
complex phenomena Structures or frames our thinking regarding a complex topic Provides a meaningful framework for analyzing and studying a complex
p henomena Helps to show how the various aspects of reality (parts of the model) interact
w ith or impact upon one another
Critical Success Factors indicators of Business Success T ruly successful business has to be doing all 5 of these factors successfully 1. Achieving financial performance o Making money is important, because there is no use if company is
going bankrupt o Not just about profit/loss Think of return on investment
2. Meeting customer needs o o Given the target market, what is it they need from this product/service Being able to understand those needs, meet those needs
3. Providing products quality and services o Provide very high levels of customer service
4. Encouraging innovation and creativity
o
Tr y ing to encourage people to be looking at new/better ways to be
doing things o Looking and new products to help the general public
5. Gaining employee comm itment o Any organizat ion is only as good as the people working for the
organizat ion It is the people of the organizat ion that provide the company with world
class quality It is the job of every manager to help his/her respect ive organizat ion
achieve these five crit ical success factors Organizat ion Stakeholders Individuals or groups who depend on a company for the realizat ion of
t heir personal goals and upon whom the company depends for the realizat ion of its goals Relat ionship between business and stakeholders = m utual dependency Primary Stakeholders (degree of dependence is high) o o o Owners (Shareholders) Customers Employees
Secondary Stakeholders (almost same as primary, except degree of
dependency is less) o o o o Suppliers Creditors Communities Government
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Society as a whole
Stakeholders provide a business wit h the capacity t o operate o o o Owners provide capital Customers provide sales Employers provide labour
Stakeholders therefore have legitimate expectations of a business o o o Owners expect fair rate of return on their investment Customers expect quality products/service Employers expect fair wages, fair amount of respect, etc.
Therefore business must recognize its responsibility to address
s takeholder expectations Failure to address stakeholder expectations will result in: o Demotivated and uncommit ted employees o o o Low levels of creativity and innovation Low levels of quality and customer service Poor financial performance
Dissatisfied and disappearing customers Angry shareholders and falling stock prices Potential bankruptcy of the firm