Introduction to Business Management (AREC 323)

Introduction to Business Management (AREC 323)

• Course offered by Douglas Mugabe, [email protected], at the University of Alberta
• Focuses on management in Agri-Food, Environmental, and Forestry businesses
• Course outline covers defining business, management concepts, roles of managers, management strategies, and associated issues
• Covers factors like:
  • Problems faced by businesses
  • Manager roles
  • Management importance
  • Management strategies
• Also discusses:
  • What is a business? (Inputs, processes, outputs, value addition)
  • Business needs (Customers, owners, products, market)
  • Defining profit and loss
  • Defining value
  • Determining when to shut down a business
  • Distinguishing between for-profit and nonprofit businesses
  • Factors of production and relevant rewards (Land, Labor, Capital, Enterprise, Rent, Wages, Interest, Profit)
  • Business processes (Inputs, transformation, outputs, costs, revenue, profit)
  • Understanding management as a process encompassing planning, organizing, controlling, and leading

What is a Business?

• A process that takes inputs and adds value
• Businesses engage in commercial, industrial, or professional activities, usually for profit
• Businesses need customers, owners, products, a market, and units of exchange
• Everything in a business revolves around money

What Does a Business Need?

• Site for buildings
• Customers, suppliers
• Raw materials, finance
• Factories, offices; Capital, machinery; Roads/rail/airports
• Government (law and order)
• Schools/Colleges; Labour (skilled, unskilled, temporary, permanent)
• Risk-takers; Decision-makers; Coordinators (enterprise)

Factors of Production and Income

• Factors: Land, Labor, Capital, Enterprise
• Income rewards: Rent, Wages, Interest, Profit

Business Process Web

• Inputs flow into Production Process to create Outputs
• Linked to:
  • Fixed costs
  • Variable costs
  • Total costs
  • Revenue
  • Profit

What is a Business (Organization)?

• System with inputs (raw materials, resources, information) transformed into outputs (products/services) with feedback loops
• Composed of employees' activities, management, technology & operations

What Do Businesses Do?

• Recognize and meet a demand
• Add value (increase utility), which can come from:
  • Form, Time, Place, and Possession
  • Increasing revenue, profit growth, and reducing costs/ effort
  • Improving productivity, strategy, process, service, and information
  • Creating new strategies for products, business services and brands.

Class Discussion / Questions

• Reasons people don't buy all clothes online
• Whether a YouTuber is a business
• Whether healthcare is a business
• What businesses produce
• Defining business opportunities as favorable circumstances to introduce a new product/service

Problems Faced by All Businesses

• Cash flow management; Competition
• Economic fluctuations; Regulatory compliance
• Cybersecurity threats; Talent acquisition and retention
• Customer satisfaction; Rising operational costs
• Technological advances; Supply chain disruptions
• Market demand fluctuations; Innovation
• Managing growth/scaling; Financial planning & budgeting
• Employee productivity/engagement

Class Activity Topics

• Defining profit, loss, and value
• Differentiating for-profit and nonprofit businesses
• Identifying the four factors of production and their rewards

What is Management?

• The process of coordinating work activities effectively and efficiently
• Key categories: Planning, organizing, controlling, and leading

Who/What is a Manager?

• Organizational members who direct others on their tasks/ duties
• Works with others to coordinate the activities
• Focuses on getting the most output from the least amount of inputs
• Completes tasks so organizational goals are achieved
• Different levels of managers exist: top, middle, and first line

Management Skills

• Technical skills (knowledge and proficiency in a specific area)
• Human skills (working efficiently with others)
• Conceptual skills (thinking and conceptualizing about abstract concepts)

Roles of Managers

• Planning (determining goals and how to reach them, including defining goals, strategies, and subplans)
• Organizing (grouping activities logically and efficiently)
• Controlling (monitoring performance and adjusting plans)
• Leading (guiding and motivating employees toward goals)

Why Management Matters

• Effective resource utilization and goal achieving
• Decision-making; Motivation and leadership
• Conflict resolution; Risk management
• Effective communication; Encouraging innovation and creativity

Management Strategies to be Competitive

• Outsmarting competitors
• Increasing the barrier to entry, Cross Licensing
• Mergers, Acquisitions, Consolidations
• Strategies like Bayer buying Monsanto, Potash corp. of SK & Calgary-based Agrium, contracting, strategic pricing, and gaining market power (implications include higher prices, production decisions determined by farmers)
• Implication changes include changes in number of businesses and business cycles; creative destruction; unstable prices

Example: Consolidation in the Seed & Food Industries

• Data shown about Canola Seed Cost (1989-2018), illustrates consolidation trends in the sector.
• Visual representations demonstrate consolidated ownership/operation in the food industry

Any Questions/Next: Entrepreneurship

• Placeholder for potential questions and subsequent topic of Entrepreneurship.