BUSINESS RESUMEN
1.1 intro to business management
1.1.1
BUSINESS AS SYSTEMS
its a system bc it has input a process output and feedback
INPUTS are all resources needed to create a product like :
* physical resources
* the raw materials and semi-finished goods that a business needs to begin production. Also includes capital goods, like equipment or machinery
* Financial
* are the fund needed to start the business also used to grow and maintain it. Also includes products that business has in storage, stock or inventory.
* human resources
* ppl needed to run the business
PROCESS
businesses will combine their inputs in different ways to produce products, the process they use will depend on the type of product, how and where its sold, the number and skill of employees, the financing used, and physical or intellectual work needed.
* HUMAN RESOURCES → makes sure business employs the correct number of skilled employees to produce and deliver products. Also makes sure that employees are treated athically and in line with the laws
* FINANCE AND ACCOUNTS → this processes ensure the business has enough money to carry out its business activity over time
* MARKETING → process of selling the right of product, at the right, place, time and customers
* OPERATIONS → operations refers to how core activity is carried out. operations muts plan how and in what quantity goods and services are produced
OUTPUTS → what a business produces. can be 2 types
* goods: tangible, has physical characteristics that can be measured
* services: INtangible, can't be touched or described by physical characteristics
FEEDBACK/FEEDBACK LOOPS →output of a system becomes an input to the same system.
POSITIVE FEEDBACK → moves systems and processes in the same direction
NEGATIVE FEEDBACK → output feeds back into the inputs in a way that moves the system in the opposite direction
* revenue → income business generates
* ethics → moral principles that guide a person or a group
* sustainability → meeting present needs without jeopardizing the ability of future generations to meet their needs
* stakeholders → individuals or groups that affect or are affected by an organization
1.1.2
DOUGHNUT ECONOMICS MODEL
doughnut economics model → model that outlines the social foundation (human needs) and ecological ceiling (planetary boundaries) that economic activity needs to respect to find the 'safe and just space for humanity'.
The outer ring of the doughnut is focused on the environment, there are imp systems that work together to keep the planet stable. If we disturb them too much it will cause permanent damage. The limit of this systems are called planetary boundaries, or the ecological ceiling
The red areas show that we are already putting too much pressure on the earth's systems.
HUMAN NEEDS / SOCIAL FOUNDATION
human needs are represented in the inner ring of the doughnut, they include the obvious like food, water, housing. But theres also human needs related to social interactions such as human networks, social equity political voice and work. The red areas in the inner circle show that we are not meeting human needs globally.
1.1.3
THE ECONOMY
WHAT IS THE ECONOMY?
Economy is a system for producing and provisioning or distributing goods and services among a group of people
The economy is embedded in society. Society is embedded in the natural environment
The centre of the model shows diff systems and groups of ppl that distribute goods and services
* households → imp care services provided between ppl with strong relationships. These goods and services are mainly produced with unpaid work
* state → provides fundamental goods and services that everyone can access. often at no or low price. mainly funded through taxes
* commons → provides shared goods and services produced by society, or provides resources from Nature. ppl use and distribute goods, services and resources through self-organised systems. there is no payment
* markets → provides goods and services produced by business. businesses produce and sell goods and services in exchange for money
SECTORS OF ECONOMY
PRIMARY SECTOR
extraction or production of raw materials from earth like agriculture fishing forestry mining and drilling
SECONDARY SECTOR
manufacturing and processing, raw materials turn into products
TERTIARY SECTOR
refers to any business that serves a service like selling clothes and food
QUATERNARY SECTOR
the area of economic activity involved with knowledge and the movement of info. it can also be considered part of the tertiary sector. includes businesses that provide web-based services and many new kinds of media
DYNAMIC NATURE OF SECTOR ACTIVITY
The steps involved in creating products is called the supply chain
supply chain of a chair
Many businesses are involved in 1 sector only
INTEGRATED BUSINESS → a business whose activities span two or more sectors
1.1.4
STARTING A BUISNESS
Business has a good chance of success when
* there is a skilled collaborative team of employees in place
* there is enough funding to run the business
* the marketing has been researched well
* the operations are efficient and resilient
success or failure depends on changes in the socio cultural, technological, economic, environmental, political, legal and ethical conditions
SWOT and STEEPLE are used to understand internal and external factors.
ENTREPRENEURIAL MINDEST AND SKILL-SET
Entrepreneurs → person who organizes human, physical and financial resources to start a business
to be an entrepreneur you need to be
* creative
* passionate to make change
* risk taker
The work of entrepreneurs and other changemakers involve
* understanding communities and their problems
* designing and planning solutions
* taking action
* sharing and growing actions and ideas to increase impact
REASONS FOR STARTING A NEW BUISNESS
* NEW BUSINESS IDEA → new idea for a product or service, new idea can motivate them to start a buisness
* PASSION TO MAKE CHANGE → good at identifying and understanding problems, they see opp for change, powerful sense of purpose in their work. Inner drive to make positive change
* MARKET NEED → identifying a need in the market, not necessarily create a new product but fulfilling the needs of a group of ppl
* EARNING A LIVING → sole reason to make money for themselves and their families
* GREATER FINANCIAL REWARD → set their own business up to make more money
* CONTROL → employees may feel like they have no control over their work/future so they may set up a business to have more control
* WORK-LIFE BALANCE → they may want to set their own hours, freedom to choose projects they like.
CHALLENGES OF STARTING A NEW BUSINESS
* LACK OF FUNDS → underestimation the amount of money needed to sustain operations
* STRONG COMPETITION → consumers loyal to established brands, competitors lower prices than newcomers
* MARKET TOO SMALL/ NO MARKET → some are too focused on their product and not pay enough attention to the market.
* UNSKILLED EMPLOYEES OR LACK OF COLLABORATION → recruiting qualified employees can be difficult especially in labour shortages. New businesses tend to to have small teams if they don't work well business is likely to fail
* POOR MANAGEMENT SKILLS → make expensive mistakes before they realize they need help
* ECONOMIC, ENVIRONMENTAL OR POLITICAL SHOCKS → rapid changes in economy, environment, politics can impact a business
STEPS TO START A NEW BUISNESS
1. refine the idea: spend considerable time getting feedback on their ideas to ensure that its the best it can be
2. prepare business plan: guide that tells you how the business will get started and operate
3. decide on legal structure: will the entrepreneur be the only owner? Will it be a partnership? should they set up as a business corporation? Related to who owns the business and what kind of value the business will bring to society
4. register business: in most countries businesses must be registered w/goverment. registration paperwork and permissions of necessary, they may need to file paperwork on how the business will be run
5. find location:
6. hire employees
7. get funding
* product oriented business where a business prioritises research and development of high quality, specialised products, rather than prioritising market research.
* market orientated business where the sole focus of a business is on the needs and wants of a market segment.