Introduction to Business Management

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Lecturer: Hove Stanley 082 ± 476 - 2846

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ourse Overview

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Ô e business world and business management Entrepreneurs ip Ô e establis ment of a business Ô e business environment

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^eneral management Ô e basic elements of planning Organising management activities Leaders ip: leading people in organisation Human resource requirements and developing effectiveness in HR

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›otivating and managing uman resources Ô e legal environment and uman resources ontrolling t e management process

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Ô e marketing process Ô e marketing instruments Ô e integrated marketing strategy Public relations Ô e financial function and financial management Asset management: t e investment decision

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èinancing decisions Ô e operations management function Operations management: activities, tec niques and met ods Purc asing and supply management Sourcing activities

    





  

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›anagement c allenges


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ïntroduction to Business ›anagement , editors ronje; Du Ôoit; ›arais and ›otlatla. 6t Edition, Oxford University Press 2003

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Business ›anagement , second edition , editors; S ›arx , D Van Rooyen , JK Bosc and HJJ Reynders. J L van Sc aik Publis ers 1998

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Ô e Business World And Business ›anagement

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Ô e role of business in society Needs and need satisfaction Ô e main economic systems Ô e need satisfying institutions of t e free market Ô e nature of business management Ô e development of business management

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Ôransformation of resources into products and services ›eet t e needs of t e people Business activity involves uman activities. People manage activity Business activity involve productionmanufacturing,retailing,mining and services

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Business produce products and services for money Business involve profit ± t e reward for meeting t e needs of t e people and means for an organisation to pay for resources Ô e prevailing c aracteristic of t e business world is called t e market economy

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Ô e market economy compromise small and large business organisation Needs in a country determine t e complexity of its business environment Business creates wealt . Wealt results in a country¶s economic growt Ô e businessperson or entrepreneur is at t e eart of t e business world.

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Society as certain expectation toward business ontrol is t roug regulations and legislation Some examples ± competition policy, employment equity , skills development act and black economic empowerment legislation

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Social responsibility Business et ics ± exploitation of workers and consumers Affirmative action Environmental damage onsumerism

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A need may ave p ysical , psyc ological or social origin. All needs require satisfaction According to Abra am H. ›aslow uman needs range in a definite order from t e most essential for survival to t e least necessary

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     Unlimited needs ¢ Self ± realisation ¢ Esteem needs ¢ Social needs ¢ Security needs ¢ P ysiological needs

Limited resources ¢ Natural resources ¢ Human resources ¢ apital resources ¢ Entrepreneurs ip/ management

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Resources are production factors Natural resources can not be increased ± land , minerals , forests and water Human resources ± labour and related skills apital ± buildings , mac inery , computers etc. Entrepreneurs ip ±risk takers.

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ommunity decides w ic institutions s ould produce and distribute products and services Ô e community determines t roug political process t e economic system in w ic necessary need satisfying institutions are establis ed

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Ô e free market economy ± most products and services are supplied by private organisations seeking profit ommand economy ± communism, t e state owns and control factors of production

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Socialism ± compromise between pure market and pure command. State controls t e principal industry. Socialism ± strategic resources belong to every citizen. Ô e rest of t e business and consumers operate wit in free market environment

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Private owners ip èreedom of c oice èree competition Profit and reward according to ability ›anagement environment ± private business

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èree to c oose career èree c oice of job , union and strike onsumer freedom and c oice Economic freedom and private initiative Unstable environment- cyclical flactuations

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State owns and controls all industries and agriculture No competition Profit not allowed ›anagement are party members Limited c oice of work Limited c oice of products

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State can control / concentrate resources towards particular ends Low productivity & standard of living Planning difficult or impossible

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Basic industries owned by state èreedom of c oice Limited competition Profit motive recognised Decisions restricted to government policy in state ± owned organisations

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èree to c oose job and employer Limited rig t to strike in state enterprises onsumers ave freedom of c oice except on state products Possibility of full employment State stabilises economic fluctuations

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Ô ere is little incentives in state organisations Unproductive state organisations

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Business organisations ± mobilise t e resources in a country at t e risk of a loss and in seeking a profit Business organisations refer and mean private enterprises ^overnment orgnisations ± protection and creation of collective non-profit seeking facilities and services ; education , ealt etc.

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^overnment organisations like education and ealt are need satisfying organisations t at operate wit out a profit motive ›anagement of government organisations fall under t e subject of public administration an independent science

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Ô e state may control and own business organisations in t e form of public corporation i.e.. Eskom, Ôransnet and Ôelkom Non ± profit seeking organisations provide seek a surplus of income over expenditure

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Economics as a social science studies ow umans and society exercise c oices concerning different ways of using t eir scarce resources for products and services

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Business management as an applied science is concerned wit t e study of t ose institutions in a particular economic system t at satisfies t e needs of a community Economics studies t e entire economic system of a country w ile business management look at t e individual organisation

 
  
 


  

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Obtain t e ig est possible output ( products and services) at t e least possible input ( lowest cost) Examine factors , met ods and principles t at enable a business organisation to maximise its profits and ac ieve its objectives

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›iddle Ages ± AD 1000 subsistence economies feudal and manorial system Renaissance ± birt of mercantilism; simple urban industries , territorial specialisation and t e development of banking and book-keeping

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Early capitalism followed t e renaissance ± Adam Smit and t e growt of cities ± t e industrial revolution 19t entury saw t e appearance of t e company Ô e demand for professional management broug t business management into being

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1900 emp asis on production management ± resulting in overproduction 1930s emp asis on sales management in an attempt to get rid of t e excess 1950s emp asis on t e marketing concept

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1970s & 1980s focused on strategic management 1990s globalisation of business management

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Scientific sc ool lassical sc ool Human relations sc ool ontemporaray management t inking

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Business management is a young applied science t at sets out to study t e ways in w ic a business can ac ieve its prime objective , w ic is to make a profit. Successful management is often regarded as an art as well as a science.

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Ant ropology- culture , be aviour and diversity Economics ± environment , markets location etc. Engineering ± product development factory lay out and employee safety Law- formation of a business , employment conditions and contract development

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omputer science ± information management , e-marketing etc. Accounting ± control systems , budgets , cost analysis etc. Psyc ology ± leaders ip , negotiation communication etc. Sociology ± organisational be aviour and et ics

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›at ematics ± decision models , planning models , market measure, financial models , uman resource models etc.

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^eneral management ›arketing Public relations èinancial management Production/ Operational Purc asing