Chapter 1 - Business Objectives (1) PDF

Principle of Business Administration The basic principles and nature of business administration. Chapter (1) Part I This course presents: The basic principles and nature of business administration. The organizational functions and skills such as marketing and different between acco...

Principle of Business Administration The basic principles and nature of business administration. Chapter (1) Part I This course presents: The basic principles and nature of business administration. The organizational functions and skills such as marketing and different between accounting and finance as well as Human resources management. The functions of management and linking together in cooperative relationships through the organizational structure. The concept of efficiency and effectiveness in management which mean “the process of making good use of the available resources to achieve the goals of the organization. Then The curriculum focuses on the integrative nature of the manager's tasks, as each job positively affects the others, professional management and leadership.  Learning Outcomes 1.1 Understand business management and business administration. 1.2 Recognize fundamental guiding principles 1.3 Understand the quality definition and developments 1.4 Define business terms related to corporate/business aims, goals and objectives.. Business Management and Business Administration both terms refer to the processes and functions of a business, there is a delicate difference between them. Business Administration:  refers to the performance of business operations, focusing on the day-to-day activities, tasks, and functions that are necessary to keep a business running smoothly. It involves the administration of various aspects such as finance, human resources, marketing, sales, and operations. Business administration is more focused on the internal processes and systems of an organization. business administration is concerned with the "how" of running a business, such as: Managing daily operations Overseeing financial transactions Supervising employees Maintaining records and reports Ensuring compliance with laws and regulations.Business Management: Focus on overall strategy: Business Management focuses on developing and implementing a comprehensive strategy to achieve the organization's goals. Emphasis on leadership and vision: Business Management emphasizes the importance of leadership, vision, and direction-setting to drive the organization forward. Holistic approach: Business Management takes a general view of the organization, considering factors such as market trends, customer needs, and competitive landscape.  Business management is concerned with the "what" and "why" of running a business.  In other words, business management is concerned with:  Setting strategic objectives  Developing business plans  Making key decisions  Allocating resources  Managing change  Leading and motivating employees  In summary:  Business Administration is about running the business efficiently and effectively on a day-to- day basis.  Business Management is about setting the direction of the business and making strategic decisions to achieve long-term goals. Key differences(dissimilar concepts) :  Scope: Business Administration focuses on the internal operations of a business, while Business Management focuses on the overall direction and strategy of the organization.  Level: Business Administration is more tactical and operational, while Business Management is more strategic and managerial.  Focus: Business Administration focuses on efficiency and effectiveness in the day-to-day operations, while Business Management focuses on achieving long-term goals and objectives.  Skills: Business Administrators typically require strong technical skills in areas like accounting, finance, and HR, while Business Managers require strong leadership, communication, and problem-solving skills.  Role of the manager: In Business Administration, managers are often focused on implementing policies and procedures, while in Business Management, managers are focused on developing and executing strategic plans.  What is business? A business is an organization or entity engaged in commercial, industrial, or professional activities with the goal of generating profit by providing goods, services, or both to consumers. Businesses operate in various sectors of the economy and can range in size from small, family-run enterprises to large multinational corporations. Key Components of a Business: 1.Goods or Services: Businesses provide tangible products (goods) or intangible services to meet the needs or desires of customers. 2.Profit Generation: The primary aim of most businesses is to make a profit by selling goods or services at a price higher than the cost of production or delivery. 3.Customers: Businesses rely on customers to purchase their products or services. Understanding customer needs and preferences is crucial for business success. 4.Operations: A business typically has processes in place for production, marketing, sales, and distribution to ensure smooth functioning and growth. 5.Market: Businesses operate within a market, competing with others to attract customers. Market conditions, including supply and demand, pricing, and competition, influence business strategies. Types of businesses can be categorized into: For-profit businesses: Companies that aim to generate profits for their owners or shareholders. Non-profit organizations: Entities that operate without the goal of generating profits, often with a focus on social welfare or public benefit. Social enterprises: Organizations that combine business principles with social goals, aiming to create positive impact while generating revenue.  Fundamental Business principles: Fundamental business principles are statements that a company or organization adheres to in order to identify its priorities and guide future decisions.  These business principles serve as a foundation for building a strong organizational culture that drives success, fosters employee engagement, and creates value for stakeholders.  Guiding principles These principles are not mutually exclusive, and they often overlap or complement each other. Customer-centricity: Prioritize customer needs, wants, and expectations to build loyalty, drive growth, and create value. Innovation: Encourage experimentation, creativity, and continuous improvement to stay ahead of the competition and adapt to changing market conditions. Integrity: Conduct business with honesty, transparency, and ethical standards, upholding high moral principles and values. Accountability: Take ownership of actions and decisions, accepting responsibility for mistakes and outcomes. Collaboration: Foster open communication, teamwork, and partnerships to achieve common goals and leverage diverse perspectives. Alertness: Adapt quickly to changes in the market, technology, or customer needs to stay competitive and responsive. Inclusivity: Promote diversity, equity, and inclusion in all aspects of the organization to create a welcoming and productive work environment.  Respect: Treat all stakeholders with respect, dignity, and empathy, recognizing their value and contributions.  Risk-taking: Take calculated risks to pursue new opportunities or innovate products/services while mitigating potential risks through careful planning and mitigation strategies.  Collaborative leadership: Lead by example, empower teams, and facilitate open communication to build trust and foster a positive work culture.  Data-driven decision-making: Use data analysis and insights to inform decisions, measure progress, and optimize performance.  ** Employee empowerment**: Give employees the self- sufficiency to make decisions, take ownership of their work, and provide opportunities for growth and development.  Social responsibility: Recognize the organization's impact on society and strive to contribute positively through corporate social responsibility initiatives. characteristics of Business the key aspects of business, Understanding these aspects is crucial for aspiring entrepreneurs, business leaders, and anyone interested in navigating the world of business. They provide a comprehensive framework for understanding how businesses operate, make decisions, and achieve success. 1. 1.Core Functions: Operations: The day-to-day activities that produce and deliver goods or services. This includes production, logistics, inventory management, and quality control. Marketing & Sales: Identifying and reaching target customers, promoting products or services, and securing sales. Finance & Accounting: Managing financial resources, tracking revenue and expenses, and ensuring financial stability. Human Resources: Recruiting, hiring, training, and managing employees, ensuring a positive work environment. Research & Development (R&D): Developing new products, processes, or technologies to remain competitive. Information Technology (IT): Managing computer systems, networks, data, and software to support business operations. 2. Strategic Considerations: Business Strategy: The overall plan for achieving long- term goals, including market positioning, competitive advantage, and growth strategies. Market Analysis: Understanding customer needs, market trends, competitive landscape, and potential opportunities. Financial Planning: Setting financial goals, developing budgets, and managing cash flow. Risk Management: Identifying and mitigating potential risks to the business, such as financial, operational, or legal risks. Sustainability: Considering the environmental and social impact of business activities, embracing ethical practices, and promoting responsible growth. 3. External Factors: Economy: Fluctuations in the economy, interest rates, inflation, and other economic indicators can significantly impact business operations. Competition: The presence of competitors, their products or services, and their pricing strategies influence business decisions. Regulations & Laws: Compliance with local, state, and federal laws, regulations, and industry standards is essential. Technology: Rapid advancements in technology create new opportunities but also require businesses to adapt and stay current. Social & Cultural Trends: Changing social and cultural values, consumer preferences, and demographic shifts can impact business decisions.  4. Internal Factors:  Organizational Structure: The way a business is organized, including departments, reporting lines, and decision-making processes.  Company Culture: The values, beliefs, and behaviors that shape the workplace environment.  Leadership: The role of leaders in setting direction, inspiring employees, and fostering a positive work environment.  Employee Skills & Motivation: The capabilities and engagement of employees are crucial for success.  Communication & Collaboration: Effective communication and collaboration among teams and departments is essential for efficient operations. 5. Key Concepts: Value Proposition: The unique value intention offered to customers, differentiating the business from competitors. Competitive Advantage: The factors that allow a business to outperform its rivals. Customer Relationship Management (CRM): Systems and processes for managing relationships with customers. Business Model: The framework outlining how a business creates value, generates revenue, and sustains itself. Innovation: The development of new products, services, processes, or business models. Business aims, goals and objectives Aim:  The Why: The aim represents the fundamental purpose of something, be it a person, a project, or an organization. It's the driving force behind all actions and decisions.  Broad and Abstract: Aims are often inspirational statements that express a long-term vision or a desired state of being. They are not specific or measurable.  Example: "To improve the health and well-being of all people.“  Example: "To revolutionize the way people learn through innovative and engaging online education platforms." Goal: The What: Goals are specific outcomes that contribute to achieving the overall aim. They define the desired results and provide direction for action. More Concrete than Aims: Goals are still aspirational but are more defined than aims. They describe what you want to achieve, but not necessarily how. Example: "To develop a new vaccine that effectively prevents a specific disease." Example "To reach 1 million active users on our online learning platform within the next two years." Business Objective: Objective: The How: Objectives are the specific, measurable steps taken to achieve a goal. They provide a roadmap for action and make progress tangible. SMART: Objectives are typically framed using the SMART criteria: Specific: Clearly defined and detailed Measurable: Quantifiable with a clear target Attainable: Realistic and achievable Relevant: Aligned with the goal and overall aim Time-bound: Have a deadline or timeframe Example: "To complete clinical trials for the new vaccine within the next five years."  In summary:  Business Aim: The "why" behind the business's existence, its overarching vision, and long-term goals.  Business Goal: The "what" the business wants to achieve, specific outcomes contributing to the aim.  Business Objective: The "how" the business will achieve its goals, with specific, measurable steps and targets.  These three concepts work together to create a clear and purposeful strategy for a business. The aim sets the vision, the goals define specific outcomes, and the objectives provide the roadmap for achieving success.  Here are a few more examples of aim, goal, and objective, showcasing different areas of focus:  Example 1: Improving Community Health  Aim: To improve the health and well-being of the local community.  Goal: To increase the number of residents with access to affordable healthcare services by 15% within the next five years.  Objective: To establish a free community clinic offering basic medical care, dental services, and mental health support within the next two years.  Example 2: Promoting Education  Aim: To foster a love of learning and empower individuals through education.  Goal: To increase the high school graduation rate in the district by 5% within the next three years.  Objective: To implement a mentoring program for at-risk students, pairing them with volunteer tutors to provide personalized support and guidance.  Example 3: Developing a Successful Business  Aim: To create a thriving and innovative business that benefits its customers, employees, and the community.  Goal: To launch a new product line that meets a growing market demand and increases revenue by 20% within the next year.  Objective: To conduct comprehensive market research and develop a detailed business plan for the new product line within the next six months.  Example 4: Personal Development  Aim: To become a more confident and skilled communicator.  Goal: To improve public speaking abilities by taking a public speaking course and participating in a local Toastmasters group.  Objective: To prepare and deliver a five-minute presentation in front of a group of peers within the next month.  Remember, the key is to start with a broad aim, then break it down into specific, measurable goals. Objectives then provide the concrete steps to achieve those goals. This process helps to clarify purpose, set priorities, and measure progress toward fulfilling your vision. Feature Business Goal Business Objective Broad, Specific, detailed, Scope overarching, actionable aspirational Strategic, high- Tactical, Level level, long-term operational, short- to-medium term Qualitative, Quantitative, Nature general, measurable, conceptual tangible Short-to-medium Timeframe Long-term (years) term (months to years) Become the Increase market Examples industry leader in share by 15% sustainable within the next 2 practices. years.