Introduction to Business Management
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Business Management Lecturer: Hove Stanley 082 – 476 - 2846
Transcript of Introduction to Business Management
Business Management
Lecturer: Hove Stanley082 – 476 - 2846
Business Management
Course Overview
Introduction to Business Management
The business world and business management
Entrepreneurship The establishment of a business The business environment
General Management Principles
General management The basic elements of planning Organising management activities Leadership: leading people in
organisation Human resource requirements and
developing effectiveness in HR
General Management Principles
Motivating and managing human resources
The legal environment and human resources
Controlling the management process
The functional management of the organisation
The marketing process The marketing instruments The integrated marketing strategy Public relations The financial function and financial
management Asset management: the investment
decision
The functional management of the organisation
Financing decisions The operations management
function Operations management: activities,
techniques and methods Purchasing and supply management Sourcing activities
Contemporary issues in business management
Management challenges
Prescribed text for programme
Introduction to Business Management , editors Cronje; Du Toit; Marais and Motlatla. 6th Edition, Oxford University Press 2003
Recommended text
Business Management , second edition , editors; S Marx , DC Van Rooyen , JK Bosch and HJJ Reynders. J L van Schaik Publishers 1998
Business Management
The Business World And Business Management
The business world and business management
The role of business in society Needs and need satisfaction The main economic systems The need satisfying institutions of
the free market The nature of business
management The development of business
management
The role of business in society
Transformation of resources into products and services
Meet the needs of the people Business activity involves human
activities. People manage activity Business activity involve production-
manufacturing,retailing,mining and services
The role of business in society conti.
Business produce products and services for money
Business involve profit – the reward for meeting the needs of the people and means for an organisation to pay for resources
The prevailing characteristic of the business world is called the market economy
The role of business in society conti.
The market economy compromise small and large business organisation
Needs in a country determine the complexity of its business environment
Business creates wealth. Wealth results in a country’s economic growth
The businessperson or entrepreneur is at the heart of the business world.
Society influence business
Society has certain expectation toward business
Control is through regulations and legislation
Some examples – competition policy, employment equity , skills development act and black economic empowerment legislation
Society influence business: factors
Social responsibility Business ethics – exploitation of
workers and consumers Affirmative action Environmental damage Consumerism
Needs and need satisfaction
A need may have physical , psychological or social origin. All needs require satisfaction
According to Abraham H. Maslow human needs range in a definite order from the most essential for survival to the least necessary
Needs and resources of the community
Unlimited needs Self – realisation Esteem needs Social needs Security needs Physiological
needs
Limited resources Natural resources Human resources Capital resources Entrepreneurship/
management
Society’s limited resources
Resources are production factors Natural resources can not be
increased – land , minerals , forests and water
Human resources – labour and related skills
Capital – buildings , machinery , computers etc.
Entrepreneurship –risk takers.
Need satisfaction
Community decides which institutions should produce and distribute products and services
The community determines through political process the economic system in which necessary need satisfying institutions are established
The main economic systems
The free market economy – most products and services are supplied by private organisations seeking profit
Command economy – communism, the state owns and control factors of production
The main economic systems conti.
Socialism – compromise between pure market and pure command. State controls the principal industry.
Socialism – strategic resources belong to every citizen. The rest of the business and consumers operate within free market environment
The free – market economy
Private ownership Freedom of choice Free competition Profit and reward according to
ability Management environment – private
business
The free market economy conti.
Free to choose career Free choice of job , union and strike Consumer freedom and choice Economic freedom and private
initiative Unstable environment- cyclical
flactuations
Command economy
State owns and controls all industries and agriculture
No competition Profit not allowed Management are party members Limited choice of work Limited choice of products
Command economy conti.
State can control / concentrate resources towards particular ends
Low productivity & standard of living
Planning difficult or impossible
Socialism
Basic industries owned by state Freedom of choice Limited competition Profit motive recognised Decisions restricted to government
policy in state – owned organisations
Socialism conti.
Free to choose job and employer Limited right to strike in state
enterprises Consumers have freedom of choice
except on state products Possibility of full employment State stabilises economic
fluctuations
Socialism conti.
There is little incentives in state organisations
Unproductive state organisations
Need – satisfying institutions of the free market
Business organisations – mobilise the resources in a country at the risk of a loss and in seeking a profit
Business organisations refer and mean private enterprises
Government orgnisations – protection and creation of collective non-profit seeking facilities and services ; education , health etc.
Need – satisfying institutions of the free market conti.
Government organisations like education and health are need satisfying organisations that operate without a profit motive
Management of government organisations fall under the subject of public administration an independent science
Need – satisfying institutions of the free market conti.
The state may control and own business organisations in the form of public corporation i.e.. Eskom, Transnet and Telkom
Non – profit seeking organisations provide seek a surplus of income over expenditure
Nature of business management
Economics as a social science studies how humans and society exercise choices concerning different ways of using their scarce resources for products and services
Nature of business management
Business management as an applied science is concerned with the study of those institutions in a particular economic system that satisfies the needs of a community
Economics studies the entire economic system of a country while business management look at the individual organisation
Purpose and task of business management
Obtain the highest possible output ( products and services) at the least possible input ( lowest cost)
Examine factors , methods and principles that enable a business organisation to maximise its profits and achieve its objectives
The development of business management
Middle Ages – AD 1000 subsistence economies feudal and manorial system
Renaissance – birth of mercantilism; simple urban industries , territorial specialisation and the development of banking and book-keeping
The development of business management conti.
Early capitalism followed the renaissance – Adam Smith and the growth of cities – the industrial revolution
19th Century saw the appearance of the company
The demand for professional management brought business management into being
The development of business management : approaches.
1900 emphasis on production management – resulting in overproduction
1930s emphasis on sales management in an attempt to get rid of the excess
1950s emphasis on the marketing concept
The development of business management: approaches
1970s & 1980s focused on strategic management
1990s globalisation of business management
Theories of management
Scientific school Classical school Human relations school Contemporaray management
thinking
The study of business management
Business management is a young applied science that sets out to study the ways in which a business can achieve its prime objective , which is to make a profit. Successful management is often regarded as an art as well as a science.
Business management and other sciences
Anthropology- culture , behaviour 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
Business management and other sciences conti.
Computer science – information management , e-marketing etc.
Accounting – control systems , budgets , cost analysis etc.
Psychology – leadership , negotiation communication etc.
Sociology – organisational behaviour and ethics
Business management and other sciences conti.
Mathematics – decision models , planning models , market measure, financial models , human resource models etc.
Functional areas in business management
General management Marketing Public relations Financial management Production/ Operational Purchasing
