General Business Administration Bachelor Course PDF

GENERAL BUSINESS ADMINISTRATION Bachelor Wiesbaden Business School Prof. Dr. Markus Faber AGENDA 1 INTRODUCTION 2 BASICS OF BUSINESS ADMINISTRATION 3 MATERIAL 4 PRODUCTION 5 MARKETING 6 OBJECTIVES 7 MANAGEMENT 8 ORGANIZATION 9 HUMAN RESOURCES 10 FINANCING AND INVESTMENT 11 ACCOUNTING / CONTROLLIN...

GENERAL BUSINESS ADMINISTRATION Bachelor Wiesbaden Business School Prof. Dr. Markus Faber AGENDA 1 INTRODUCTION 2 BASICS OF BUSINESS ADMINISTRATION 3 MATERIAL 4 PRODUCTION 5 MARKETING 6 OBJECTIVES 7 MANAGEMENT 8 ORGANIZATION 9 HUMAN RESOURCES 10 FINANCING AND INVESTMENT 11 ACCOUNTING / CONTROLLING 12 MEGA TRENDS AND PERSPECTIVES 2 1 INTRODUCTION Why? What? How / When? 3 INTRODUCTION Why? Why is it relevant for you? Why did you choose to study “something” with Business Administration? Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 4 INTRODUCTION What? Objectives of the course “General Business Administration” - Understanding Business (Administration / Management) as a Science - Knowing the most relevant Corner Stones of Business Administration - Being able to understand a Company as an Organism - Preparing you for the Courses to come - Changing the own Perspective so far: Shifting from Customer to Producer Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 5 INTRODUCTION What? “Systems” Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 6 INTRODUCTION What? Source(s): https://www.visualcapitalist.com/the-50-most-valuable-companies-in-the-world-in-2023/ Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 7  S INTRODUCTION What? The operating institution (1/2) Money and equity markets Equity (deposits / profits) Debt (credit / interest) Business to … Accounting and Controlling Sourcing Finance Market Supplies Storage un- Materials Basic Sales and B2G Government finished Assets factors marketing goods Pro- of the Operating duction products / Private Staff Storage services B2B - resources Dispo- made businesses finished Liquidity sition goods Human B2C Households / resources Finance individuals Accounting and Controlling Goods Taxes / fees / contributions Grants / subsidies Financing Financial information Government Source(s): Based on Wöhe, 2002. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 8 INTRODUCTION What? The operating institution (2/2) Company Corporate management Target system Corporate strategies Financial markets Financing and Financial, balance sheet Corporate controlling Investment and income statements Revenue Costs Procurement Sales markets markets Material Production Marketing (Product goods / (Production factors) services) Corporate operational accounting Financing Goods Financial information Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 9 INTRODUCTION How / When? Relevant information: see StudIP Literature: … and many, many more. But most relevant: Script and Content of the Course Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 10 2 BASICS OF BUSINESS ADMINISTRATION Science History of BA Science Science and BA 11 SCIENCE Parameters of Science 1. Identification and increase of knowledge (research) - Qualitative - Quantitative 2. Imparting and broadening knowledge (teaching) - Education / Training for jobs - Universities - In-company training Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 12 SCIENCE Business Administration and Science Characteristics of a science with four elements  Focus on the economic side of the business Object of … Includes the economic principles and processes in the company knowledge  The decisions to be made on the use of scarce goods are regarded as the object of knowledge A distinction is made between theoretical and practical: Knowledge  Theoretical knowledge objectives are characterized by the acquisition of knowledge target  Practical focus on empirical decision-making processes and the development of new bases for decision-making  Every science requires certain methods in order to achieve the specified goals. Methods  By its very nature, methodology is an interdisciplinary science  A system presents the knowledge gained in a context System  The context can represent cause-and-effect mechanisms, among other things Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 13 SCIENCE Business Administration in the Context of Science The sciences overview Science Ideal sciences Real sciences Logics Mathematics Methods Humanities Natural sciences Biology Chemistry Physics Social sciences Law Arts Languages Economic sciences Political Business Sociology Psychology Economics sciences Administration Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 14 HISTORY OF BA SCIENCE Main Steps of Development Antiquity Middle Ages Modern Times 19th Century 20th Century 400 B.C. Starting 1200 1650 onwards 1800 onwards 1900 onwards  Lively long-  Compatibility of  The state  Trade as an  Birth of modern distance trade economy and promotes trade industry business  Plato: Skepticism religion  Mercantilism  National administration towards the  Thomas  Maximization of economy (A.  First business pursuit of profit Aquinas: Just state wealth Smith) schools around  Aristotle: Money price  Import duties  First industrial 1900 has no intrinsic  Prohibition of revolution  Business value interest until the  Cheap labour administration Reformation as independent science since 1912 Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 15 SCIENCE AND BA Needs, Definitions, Principles (1/5) Maslow’s hierarchy of needs Source(s): McLeod, S., Simply Psychology, 2018 Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 16 SCIENCE AND BA Needs, Definitions, Principles (1/5) Needs Maslow's pyramid of needs is a model developed by the psychologist Abraham Maslow (USA) to describe the motivation of people  Deficit and growth motives. necessity of economic Needs Means to satisfy needs activity and application of the economic principle The assumption is that people naturally strive for self-realization. However, deficit needs must first be satisfied. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 17 SCIENCE AND BA Needs, Definitions, Principles (2/5) Kinds of individual economies  Producers (Private / Governmental)  Consumers (Private / Governmental) What is a Company? The company can be characterized as an open, dynamic, complex, autonomous, market-oriented, social system. Principles:  Maximizing (maximal output should be achieved)  Minimizing (goal to be achieved with minimal input)  Optimizing (achieving maximum output with minimum input) Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 18 SCIENCE AND BA Needs, Definitions, Principles (3/5) Effectiveness: Efficiency:  Assessment of target achievement, i.e. the extent to  Assessment of the relationship between the service which the planned targets have been achieved. provided and the use of resources.  Can be measured by efficiency and profitability.  Can be measured by productivity.  Doing the right things, i.e. performance effectiveness.  Doing things right, i.e. performance. Goods: Physical goods Non-physical goods Services Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 19 SCIENCE AND BA Needs, Definitions, Principles (5/5) Comparison of market economy and planned economy Socialist centrally planned economy Capitalist market economy  centralized control  control via the economic system  state ownership  private property  plan fulfilment  market regulates supply, demand and prices  without freedom of choice  freedom of choice  state ownership of the means of production  state and private ownership of the means of (including land and buildings) production (including land and buildings) Prerequisite for both economic systems:  Use of production factors  Compliance with the principle of economic efficiency  Maintaining financial equilibrium (maintaining solvency) Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 20 SCIENCE AND BA Code of conduct of Business Administration Science Visible reality Value judgements Practically normative direction Companies as part of the observable reality companies from the  value judgments in the statement area are deliberately (relevant section of reality) perspective of psychology avoided Experience object of  it is not the task of the scientist to evaluate the ethical and Business administration social objectives pursued by companies  the objectives must be determined empirically and must companies from the not be derived from norms perspective of sociology vs. companies from the Normative evaluative direction perspective of …  value judgments in the area of statements are consciously demanded, although they elude scientific proof  overriding values (of the researcher) are incorporated into Object of knowledge of Business administration: the research statements as norms, as target ideas “Planned allocation of scarce resources to given needs” Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 21 3 MATERIAL Basics Procurement Storage 22 MATERIAL Basics Decision- and function-oriented overall model Company Constitutive decisions Location Legal form Cooperations Management Controlling, Organization, Human Resources Performance Research and Development, Logistics Real goods Suppliers Procurement Production Nominal Customers goods Accounting / Finance Economy Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 23 MATERIAL Basics The object of materials management is the supply and the disposal of goods for all areas in accordance with the respective requirements through procurement and through logistics. The terms merchandise management and procurement management are often used synonymously with materials management. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 24 MATERIAL Basics Objects of materials management and kinds of material Materials Management Material Raw materials: Raw materials Raw materials are the main components of a Auxiliary materials company's products in terms of quantity Operating and/or value. materials Unfinished goods Logistics Auxiliary materials / supplies: Procurement Finished goods Auxiliary materials are secondary components of a company's products in terms of quantity Other goods and/or value. Information Operating materials / consumables: Human resources Operating materials are not incorporated into Assets the products of a company but are consumed directly or indirectly in their production. Services Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 25 MATERIAL Basics Objectives of the materials management Costs Procurement costs Materials costs Logistics costs Deadline compliance Time Output Quality Throughput time Supply readiness Right time, location, quantity, status-quo Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 26 MATERIAL Procurement Objectives of procurement: Ensuring the needs-based supply of those goods that are used in the operational provision of services Strategically: Outsourcing decisions (make-or-buy) Quantity of suppliers and locations Operative: Planning of needs Planning of stocks Procurement politics Supplier politics Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 27 MATERIAL Procurement Requirements types and requirements planning in procurement Procurement planning - raw materials Sales Planning - auxiliary materials - other goods / services Production planning - unfinished goods - finished goods Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 28 MATERIAL Procurement Determination of requirements using the example of an automotive parts list Product Parts Parts Parts Primary need Secondary need Secondary need Secondary need 5 Wheel nut 4 Wheel 1 Rim 1 Landing Gear … 1 Floor Assembly Vehicle … 1 Power Train Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 29 MATERIAL Procurement Deployment principles Single Procurement Stock Procurement Just in Time  Cheaper per product because  Lower / no storage facility  Short storage times of higher quantities needed  Low capital lock-up +  No production delays  Relatively low procurement  Lower storage costs  Wait for better prices costs  Risk of ageing  No cheap purchasing times  Planning need is much higher  Risk of capital quality loss  No instant adaption of  Risk of supplier delays / I  Capital lock-up production quantities logistics delays  High storage costs Z-Goods Y-Goods X-Goods Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 30 MATERIAL Procurement Cost trends as a function of order volumes Costs Total costs Storage costs Optimum order Order costs quantity Quantity ordered q Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 31 MATERIAL Storage Comparison of manual and automatic bearings Manual bearings Automatic bearings  Goods are brought to the man  Flexible space allocation  Storage of many articles, batches, MHD in a small space +  Fast removal of whole units  Short training times  Direct access to every segment Low personnel + deployment  Low forklift use  High picking performance Low picking error rate  Large proportion of picking time is spent on  Low inventory effort transportation (man to goods) and searching  Paperless communication  High personnel costs  Costs: forklift maintenance, repair of inventory I  High error rate  Space allocation is fixed  High inventory costs I  Service know-how required  High printing costs if no MDE  Costs: maintenance, spare parts Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 32 MATERIAL Storage Barcode shapes Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 33 MATERIAL Storage Schematic structure of a passive RFID system 3) Scanner Intermec UAP-2100 WAN/ Tag-Antenna WLAN / LAN 2) RFID- Antennas 4) Data procesing 1) RFID-Tags Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 34 MATERIAL Storage Pallets and containers cycle Commerce Challenges: Forwarding Returning empty containers for "filling“ Documenting and invoicing exchanges between the parties involved Identifying and sorting out defective containers Provision Balancing out stock fluctuations Industry Paletts depot Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 35 4 PRODUCTION Basics Organization Planning 36 PRODUCTION Basics Production management: The object of production management is the economic design and implementation of the transformation of existing production factors into products and internal services using production processes. Production as a transformation of input factors into marketable products / services: Raw Material Auxiliary Material Combination of input Products / Consumables factors Services Human Resources Input Production Output Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 37 PRODUCTION Basics Objectives of production management Costs Production costs ↓ Manufacturing costs ↓ Time Output Deadline compliance ↑ Quantity ↑ Throughput time ↓ Quality ↑ Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 38 PRODUCTION Organization Depending on the run size and batch size, i.e. the number of identical products produced in succession, and whether or not the equipment is converted, there are different types of processes: Individual production Serial production Mass production Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 39 PRODUCTION Organization Shop floor manufacturing and assembly Immovable equipment designed for similar operations is grouped together in so-called workshops The products are transported between the workshops according to the production sequence Frequently used for series production → Very flexible, very fail-safe → but high control effort, medium productivity Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 40 PRODUCTION Organization Floor production and assembly Fixed equipment designed for the production of a specific product is arranged one after the other according to the production sequence. High productivity of employees High inflexibility with regard to product types Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 41 PRODUCTION Organization Group production and assembly / series production Mixture of workshop and flow production Parts of production are combined into groups within the framework of flow production Flexibility advantages of workshop production are combined with productivity advantages of flow production Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 42 PRODUCTION Planning Differences between inventory management and production planning Inventory management Production planning Stock levels are planned so that an end product is We know the demand for the end product available in the optimum quantity We plan the production of intermediate products, The demand for the product is usually a forecast the input quantity of which depends on the end (historical values) product→ dependent demand → independent demand → dependent demand Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 43 PRODUCTION Planning Process of Production Planning Business Planning Aggregated Planning Manufacturing Resource Planning (also including other divisions) Master Production Scheduling Capacity planning and consideration of changes Business planning Material Requirement Planning Orientation towards the value chain Hierarchical planning concept Process Planning Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 44 PRODUCTION Planning Dimensions of Aggregation Regarding: Time YEARS Hours / Seconds Regarding: Spatial COMPANY Machine Regarding: Factual FINANCIALS Process Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 45  PRODUCTION Planning Production control alternatives: Push vs Pull Push: Central control based on the bring-principle Pull: Decentral control based on the take-principle Order by Machine, Feedback, Approval ORDER ORDER ORDER ORDER Controller Material / Production Storage Production Storage Production Products Material / Production Production Production Product Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 46 5 MARKETING Basics Product Place Price Promotion 47 MARKETING Basics Problem solving process Monitoring functions 1. Analysis of the situation 2. Definition of Marketing Objectives Controlling Planning C P 3. Definition of Marketing Strategy Management 4. Definition of Marketing Instruments P 5. Creation of Marketing Mix A D Assignment Decision 6. Implementation of Marketing Concept 7. Marketing Evaluation → The management of the general marketing problem-solving process, in particular the design and implementation of the marketing concept, is referred to as marketing management. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 48 MARKETING Basics Sales market: All consumers to whom the company turns as actual and potential buyers of its products and services in order to induce them to purchase its services / products. Characteristics of a market Market Research Customer Object of purchase Initiator Purchasing goals Influencer Purchase influencer Decision maker Purchase process Buyer Purchase causes User Purchase location Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 49 MARKETING Basics Market segmentation refers to the division of the overall market into homogeneous submarkets according to various criteria. Geographical Demographical segmentation segmentation  Region  Age  Population density  Gender  Climate  Size of the household  Language  Income Socio-psychological Behavioral segmentation segmentation  Generally  Personality  With regard to products / services  Social class Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 50 MARKETING Product Product ideas – idea selection: Depending on several questions Is a product interesting How high is the risk involved primary because of economic in manufacturing this reasons? product? Does the new product fit in Is the idea technically the existing product portfolio? realizable? What is the performance capacity of your own company? Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 51 MARKETING Product Product development comprises the technical, market and production-oriented activities of the research and development department of an industrial company in order to create new or improved products or processes. Development Definition of potential product / process Product idea: Research Constructure development Idea search Product launch Idea Prototyping Definition of concentration Marketing Tools / Tests Correction of Tools Idea selection Development Optimization suggestions Market surveys Production Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 52 MARKETING Product Product design: Before designing the product, the elements and dimensions that can be determined on the product must be considered. Functionality / Marketing Overview Service ability Functional safety Design Packaging Product Operational safety Core Environ- Susceptability to failure mental Marking Impact Durability Value retention Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 53 MARKETING Product Product policy: design of a company's sales program in terms of type and quantity, as well as the additional services offered together with the product. Product policy Product Product Product Product Product (program) retention changes innovation elimination diversification horizontal Variation vertically Differentiation lateral Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 54 MARKETING Place Distribution: design and control of the transfer of a product from the producer to the buyer. Distribution Sales channels Logistics Sales Paths Sales Bodies Storage Direct Own bodies Order processing Indirect Others Transportation Mixed paths Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 55 MARKETING Place The degree of distribution describes the availability of a product at a certain point in time or within a certain period of time. Decisions on the number and type of sales intermediaries between the company and the end consumer determine the degree of distribution. Direct sales path Indirect sales path Producer Producer Wholesaler Retailer Consumer Consumer Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 56 MARKETING Place Franchising is a contractually regulated cooperation between two legally independent companies in which the franchisor grants the franchisee the right to sell goods and services under a brand or a specific company name and in accordance with the franchisor's specifications in return for a fee. What can the franchisor make available to the franchisee? - Trade name and brand - Methods and techniques of management - Production processes, formulation - Supply of goods - Marketing concepts - Staff training -… Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 57 MARKETING Place Logistical distribution is part of the logistics of a company: includes all activities of technical transfer of entrepreneurial services to the place of the customer Main objectives: Right products at the right time at the right location at right quality and quantity at minimal costs → Over-all objective: High delivery service at minimal costs for logistics Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 58 MARKETING Price Conditions policy: The terms and conditions policy includes decisions on the prices of the products and/or services offered, as well as the related purchasing conditions such as rebates, discounts and credit financing. Pricing policy decision: corresponds to the totality of all decisions in the sales program that serve to shape the price-performance ratio in a customer- and target-oriented manner. Practice-oriented price determination: In practice, price determination depends heavily on the risk appetite of decision-makers, the behavior of competitors, as well as the pricing strategy and the design of other marketing tools. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 59 MARKETING Price Causes for price setting Causes for price setting Introduction of new Looking at Price modifications Price changes products optimized prices Different perspectives for price setting Orientations for price setting Competitor- / Cost-oriented Profit-oriented Demand-oriented Industry-oriented Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 60 MARKETING Price Cost orientation: Cost-oriented pricing is based on cost accounting. The method used is known as progressive costing, mark-up costing or mark-up pricing. Progressive costing / mark-up costing On the basis of full cost On the basis of partial cost accounting accounting Price= Price= Total unit costs plus profit Variable unit costs plus gross mark-up profit mark-up the determination of the necessary minimum price is of great importance for the existence of a company [long-term and short-term price floor] Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 61 MARKETING Price Profit orientation: In profit-oriented pricing, the company attempts to specify a profit target from which the price can be derived. A break-even analysis is often carried out Revenue (R) Costs (C) R Loss zone C Profit zone Capacity limit Break-even quantity x Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 62 MARKETING Price Demand-oriented pricing: Competitor / Industry orientation: Demand-oriented pricing is based on the In competitive pricing, the company bases its prices value of a product as subjectively perceived on those of its competitors. In many cases, a company by the buyer. The company is guided by orients itself to the industry price. market data and demand conditions. Special forms of competitive pricing are - price leadership and - the price cartel. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 63 MARKETING Price Price differentiation: What types of price differentiation can be distinguished? Spatial According to target Time-related customer group Determinants of the price elasticity According to sales According to path and body quantity According to order size Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 64 MARKETING Price Price increases: Price reduction: Price reductions may be economically necessary Price awareness is generally strongest for or a possible active strategy. frequently purchased products. A distinction must be made between long-term Price fluctuations are often not noticed for price reductions and price reductions that a products that are purchased irregularly. company only carries out for a short period of time, so-called promotional prices: sales, loss leader offers Causes for price increases Causes for price reductions - Oversupply - Cost increases (due to inflationary trends) - can lead - Unfavorable capacity utilization to the company having to pass on the higher costs to - Falling market share prices in order to maintain the long-term price floor. - General economic situation (review) - Lower costs - due to more rational production - An economic or structural upswing - can lead to processes / expansion of production volume (cost excess demand. A minimal price increase can regression) significantly increase the overall profit. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 65 - MARKETING Promotion Communication policy and public relations Communication policy: The aim of communication policy is to convey information about products and the company to current and potential customers, as well as to the public interested in the company, in order to create optimal conditions for satisfying needs. Public relations: Public relations communicate general information about the company's activities and their results. The aim is to create a relationship of trust that facilitates future relations between the company and potential partners or other interest groups. Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 66 MARKETING Promotion Functions of advertisements: Main objectives of advertising: Advertising has the task of conveying information A consistent advertising measure strives to achieve four about the existence, characteristics, availability main objectives, whereby one objective builds on the other and purchase conditions (price) of products and from publicity to triggering action. services. Main objectives Such information serves potential customers in a variety of ways:  Checking the match between the customer's needs Announcement Information Image-building Action-trigger and a specific offer  Information about the product in order to be able to Immediate sale make a preliminary decision (pre-selection) Further  Drawing attention to a product for which there is a activities of the need, but which the customer would not have solicited noticed without advertising company  Comparison of different offers (market transparency) Forwarding the advertising message to third parties Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 67 MARKETING Promotion Correspondent AIDA-concept: Attention Interest Desire Action (Aufmerksamkeit) (Interesse) (Wunsch) (Handeln) Promotional message: The content of the advertising relates to various aspects depending on the advertising objective Brand of the product Properties of the product Benefits of the product The advertising Needs that can be met with the product consists of a Status of the product - rational Advantages (compared to competing products) and an - emotional Identification of potential users of the product part. Availability of the product Conditions under which a product can be purchased (especially price) Special services associated with the product Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 68 MARKETING Promotion Advertising concept: Definition and design of communication between advertiser and recipient Advertising object Target group Advertising Advertising budget objectives Elements of the marketing concept Advertising Advertising location message Advertising media Advertising period and advertising material Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 69 6 OBJECTIVES Types of objectives Target setting process 70 OBJECTIVES Types of objectives Objectives are statements and ideas about future states or behaviors that are considered desirable, which are (can be) realized by actions. Factual objective Formal objective Factual objectives refer to the specific action (the Formal objectives are overriding objectives business task) in performing the various (compared to the factual objectives) to which the operational functions. factual objectives must be aligned and in which They can be divided into: the success of entrepreneurial activity is - performance targets (procurement targets, expressed. production targets, sales targets, turnover Formal objectives are therefore also referred to targets) as performance objectives. - financial targets (liquidity, capital procurement, Key formal objectives that reflect the success of investments, etc.) the company are - social and ecological objectives (employee and - productivity social objectives such as employee satisfaction, - economic efficiency environmental protection) - profit/profitability Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 71 OBJECTIVES Types of objectives Formal objectives of a company (economic principle) Productivity Economic efficiency Profit and Rentability Factual objectives Management- and Environmental and Productivity Financial objectives organisational targets social objectives Market targets Liquidity Division of work Employee related Revenue targets Capital procurement Problem solving Society related Production targets Capital and asset processes Ecological responsibility Procurement targets structure Management functions Risk Management style Operational activities Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 72 OBJECTIVES Types of objectives Functions of objectives Decision-making process Decision realization Review of the consequences Orientation function Coordination function Control function Information can be assessed for its Coordinated communication and relevance actions between the company The contribution of the chosen divisions become possible alternative action to the result can Evaluation function Motivational function be checked Decision alternatives can be The individual employee can target Recognizable deviations can be evaluated in a targeted manner his or her level of ambition analyzed as to their cause and possible conflict situations can be Selection function Performance appraisal function resolved rationally Alternative with the highest con- The performance of the individual/ Connection to the coordination tribution can be selected targeted unit can be evaluated function possible Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 73 OBJECTIVES Types of objectives Example: Environmental protection Resource objective Emission and waste objectives Risk objectives  Avoid  Minimize  Conserve /  reduce potential dangers.  keep  recycle  dispose of  Prevent scarce resources  limit polluting emissions and waste Incidents. Limitation of resource use Limitation of emissions and waste Risk limitation Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 74 OBJECTIVES Target setting process Management cycle Management Will formation Will enforcement Objective decisions Measure decisions Organization Controlling Control  Analysis /  Analysis / Forecast Forecast  Planning of  Planning objectives measures  Objective setting  Measure setting Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 75 OBJECTIVES Target setting process 1 2 3 4 5 6 7 Target Target Target Target Feasibility Target Target operatio- implemen- search ordering check decision review nalization tation Step-by-step development of a possible target system for the company Determination of the actual target system of the company Revolving adaptation / further development of the target system Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 76 OBJECTIVES Target setting process 1 Target search. Task: selecting the right objectives, i.e. those that are appropriate and meet the requirements, on which to base the further objective-setting process. Base of the target search Theory of the firm Reality / Empirically Empirically determined catalogs of objectives: Premises:  profit maximization still dominant, but: Existence of other (equally important) goals:  Homo oeconomicus  security  Individual decision-maker (unipersonal  qualitative growth target decision)  social responsibility  … Profit maximization as dominant Multi-target function objective Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 77 OBJECTIVES Target setting process 2 Target operationalization Target operationalization Target content Target extent Temporal reference Organizational reference What period / point in time Which organizational unit / What measure and level of does the target statement market do the goals relate target achievement is being What facts do the targets refer to? to? sought? relate to? By when should the degree How much should be What should be achieved of target achievement be Who is responsible for achieved? and measured? measured? achieving the targets?  Satisfaction goals vs.  Formal goals  Short-/medium-/long-  Company goals maximization goals  Factual goals time goals  Department goals  Target approximator vs  Static vs. dynamic goals  Area goals target fixer  Employee goals Value units of the extent (monetary / non-monetary) Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 78 OBJECTIVES Target setting process 3 Target ordering: Hierarchization of objectives Ultimate goal = Purpose  The lower an employee is ranked in the company hierarchy, the less the company's What is to be achieved? top objectives provide him/her with a direct orientation for his/her daily work.  Intermediate and subgoals must therefore be derived from the overall goals to enable employees at subordinate levels to align their actions/decisions with them. Intermediate goal = Means to achieve the ultimate goal and purpose in relation to  Furthermore, subgoals can usually be operationalized more easily (increased the corporate objective measurability) and possible duplications (goal redundancies) become clear when comparing different sub-goals. The significance of the individual goal becomes clearer. Subgoal =  Ultimate and subgoals can be linked in an end-means relationship or as fundamental Means to achieve the objectives. intermediate target Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 79 OBJECTIVES Target setting process Checking for feasibility, target decision/implementation/realization 4 5 6 7 Feasibility check Target decision Target implementation Target review Which possible objectives Are the measures required Which target corrections should actually be defined Who is notified of which to achieve the goal appear to be necessary as binding objectives to be targets? realistically feasible? over time? pursued? Resources Coordination of all Addressee assignment Degree of target Time horizons relevant decision- Realistic demand level achievement Target conflicts makers Acceptance Changed framework Performance potential Target selection Consequences / conditions of the bodies Target setting sanctions Changed values of the responsible for decision-makers implementation Hochschule RheinMain – WBS – General Business Administration 2024 / 2025 80