MGT1001 Introduction To Business Lecture Notes PDF

MGT1001 Introduction to Business Lecture 1 Business and Economic Systems  Lecture Objectives Explain basic concepts in business – types of business, adding value, risk-reward relationship, and business goals Identify the main function...

MGT1001 Introduction to Business Lecture 1 Business and Economic Systems  Lecture Objectives Explain basic concepts in business – types of business, adding value, risk-reward relationship, and business goals Identify the main functional areas of business in an enterprise Define economics and the four types of economic systems Describe briefly the role of supply, demand, and competition in a free enterprise system Describe the role of government in the economy  What Is Business? The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs  Question skills development Why do you study business? What are the positive and negative points about business? Rapid development of Al - convient global perspective replacing human position A cultural differences -leas-developed countries legal system is bad & well developed countries wanted non-ecofriendly  Identifying Major Types of Businesses Manufacturing Service Businesses Exeau Businesses Goods-producing (keyboards) Service-providing (health care) Companies that create value by Companies that create value by making “things”, most of which performing activities that deliver some benefit to are tangible. customers.  social enterprise : (Mainaim : X Profits) Diamond cab (for disabled people to get on Taxil 11 Not all organizations are businesses …… Nonprofit organizations provide goods and services but do NOT1 have the fundamental purpose of earning profits.  Adding Value: the Business of Business A system for satisfying customers by transforming lower-value inputs into higher-value outputs An organic farm in primaraeon Vegetables and fruits Yuen Long Water, seeds, time, Temperature Sorting, grading, control...etc. secondary Packaging…etc. production Tevitary production Consumers Grocery store and Varieties, delivery, supermarkets guarantee…etc. High-valued added  Adding Value: the Business of Business Making amartphone/clothes/bottles... Can you think of a similar case and draw a simple diagram to illustrate it? indwebgeihtaught ten is make noted to have revision and remember the main point good results that we're natified in exam  Adding Value: the Business of Business Revenue Money a company brings in through the sale of goods and services Business model A concise description of how a business intends to generate revenue Competitive advantage Some aspect of a product or company that makes it more appealing to target customers Leg good quality/cheap price !.  Relationship Between #P Sales Revenue and Profit Profit is what remains after all business costs/expenses have been deducted from sales revenue (paid by customers). A loss (negative profit) results when a firm’s expenses are greater than its revenues. Sales Revenue Expenses Profit  Primary Goal of Business Earn a Profit - The reward for the risks that businesses take in providing products. ~ l; Ribk ! Any other goals/objectives? Different objectives at different stages? Short-term and long-term?  * D Major Functional Areas in a Business Enterprise 1. Manufacturing, production, or operations 2. Marketing 3. Finance & accounting 4. Human resources 5. Research & development/Information technology  Major Business Functions Manufacturing, production, or operations an area where the company makes products or provide services purchasing, logistics, facilities management  Major Business Functions Marketing identifying opportunities in the marketplace and satisfy customers working with R&D to develop the products to address those opportunities creating branding and advertising strategies to communicate with potential customers, and setting prices  Major Business Functions Finance and accounting responsible for virtually every aspect of a firm’s finances ensuring that the company has the funds it needs to operate monitoring and controlling how those funds are spent drafting reports for internal and external users  Major Business Functions Human resources (HR) responsible for recruiting, hiring, developing, and supporting employees maintaining a quality workforce Hong Kong Jockey Club.  Major Business Functions Research and development (R&D) functional area responsible for conceiving and designing new products exploring new technology < Medevelopment of  Major Business Functions Information technology (IT) Systems that promote communication and information usage through the company or that allow companies to offer new services to their customers online platform unique app => A communition  Economics Economics is the study of how wealth (anything of value) is created and distributed. Microeconomics Macroeconomics The study of the decisions made The study of the national by individuals and businesses and global economies © MANGOSTOCK/SHUTTERSTOCK © KK-ARTWORKS/SHUTTERSTOCK  Types of Economic Systems Economy WHAT goods and services HOW will they The system will be be produced? through which produced? a society creates and WHO owns distributes FOR WHOM and controls wealth will they be the major produced? factors of production?  Types of Economic Systems Land & natural resources WHO owns and controls the Labor major factors of Capital production? Entrepreneurship  Case Study -- Zynga Questions: Factors of production and resources Environmental Factors – Lecture 2  Types of Economic Systems Pure Planned Economy Pure Market Economy Communism Socialism Mixed Capitalism Capitalism Cuba India Brazil U Canada USA N. Korea China France K  Planned System Economic systems in which the government controls most of the factors of production & regulates their allocation: Communism Socialism & everybody in the same it ! Karl Marx (1818 – 1883)  Communism Economic system in which the government owns & operates all productive resources & determines all significant economic choices. Create a classless society & no private businesses are allowed. e.g., North Korea, Cuba  Socialism Economic system characterized by public ownership & operation of key industries combined with private ownership & operation of less-vital industries. Eliminate poverty, provide social services, and reduce economic waste. e.g., China, Israel  Mixed Economy Economic system in which land, factories, & other economic resources are privately owned but with various levels of government involvement and intervention. Economic freedom combined with government policies to achieve social goals e.g., Canada, UK  Capitalism Economic system based on economic freedom & competition in the market. No government intervention and limited role of government e.g. Hong Kong, Switzerland Basic Assumptions for Adam Smith’s Laissez-Faire Capitalism Laissez-faire = “let them do”  Factors of Free Market Three factors differentiate a free-market system: I Government Supply & Intervention Demand Competition Supply & Demand  Competition Icomplete for the name group customers Competition is rivalry among businesses for sales to potential customers. In a capitalistic society, competition ensures only businesses that provide consumers with useful products and services at fair prices will survive.  Types of Competition NEXelA] Pri Pure Competition Monopoly DEPEMTR = ) p I! Many buyers & sellers. No No direct competitors so that one can influence market one company dominates. prices. Monopolistic Oligopoly Competition Market dominated by a few producers. Many sellers that differentiate products from competitors. /Tt ASEEProduct  Government Role Much of HK’s business success is due to the laissez faire economy. SAR government provided a low tax base, an efficient infrastructure and allowed trade and industry to flourish with minimum intervention/proactive measures. (Free trade/ERN ineconomy ! SAR government sees its role as building the business-friendly environment to enable the private sector to prosper.  Government Role Protect Stakeholders’ Right Stakeholders are groups that are affected by a business’s operations including colleagues, employees, supervisors, investors, customers, suppliers, and society at large. Leg. customers' council protect Foster Competition their rights : Antitrust laws/competition laws, e.g., to snure fair competition and encourage industries to have as many competitions as the market will sustain. eg. Foodpanda/Deliveros/Keeta  Government Role Encourage Innovation Encourage individuals & companies to take risks such as investing in technology, inventing new products, & starting new businesses. Economic Stability eg MnAD En -** ~. Monetary policy: government policy & actions E to regulate money supply. I (PEY Fiscal policy: use of government revenue & spending to influence the business Y ↑ Interest rate con down take reference to USA. Interent rate ↓ nitumate