Management Tools - Session 2 - Charter 1 PDF

ORGANIZATIONS: An Organization is a Group of people with a common purpose (goals) and created structure (means). Your class and your work teams are organizations Understanding What Businesses Do Business Any profit-seeking organization that provides goods and/or services designed to satisfy the...

ORGANIZATIONS: An Organization is a Group of people with a common purpose (goals) and created structure (means). Your class and your work teams are organizations Understanding What Businesses Do Business Any profit-seeking organization that provides goods and/or services designed to satisfy the customers needs any business does is to view it as a system for satisfying customers by transforming lower-value inputs into higher-value outputs Adding Value: Value Higher Value Outcomes Value Lower Value Incomes $ Adding Value: The Business of Business Revenue (aka. income) Money that a company brings in (money incomes) through the sale of goods and services Adding Value: The Business of Business Profit Money left over after all the costs involved in doing business have been deducted from the revenue In (very) general terms: + Revenue (money income) - Expenses (money outcome) = Profit (remaining money) Adding Value: The Business of Business CASH is a Reality Why? (next Slide) Competing to Attract and Satisfy Customers Competitive advantage Aspect of a product or company that makes it more appealing to its target customers A competitive Advantage can be anything that distinguishes your value proposition in front of your consumer. What makes you different and better than others? Types of Businesses For-profit organizations Organizations that provide goods and/or services with a profit motive Not-for-profit organizations Organizations that provide goods and services without having a profit motive; these are also called nonprofit organizations This does not mean that they do not make profit Major Types of Businesses Goods-producing businesses Service businesses Create value by making things, most of which are tangible Create value by performing activities that deliver some benefit to customers - Goods can be tangible (car) and intangible (software) Goods-producing businesses are often capital-intensive businesses Service businesses tend to be labor-intensive businesses Exhibit 1.3 The Business Mindset Exhibit 1.3 The Business Mindset Exhibit 1.4 Positive and Negative Effects of Business on Society Multiple Environments of Business Social environment Trends and forces in society at large (demographics, education level, purchasing power...) Can affect demand, composition of the workforce, Stakeholders Anyone affected by a company s decisions/activities Note difference with Shareholders The Multiple Environments of Business Technological environment Forces resulting from the practical application of science to innovations, products, and processes (medical advancements, availability of technology...) Disruptive technologies They change the nature of an industry Can create or destroy entire companies (internet, email, iphone, electric car...) The Multiple Environments of Business Economic environment Conditions and forces that affect the cost and availability of goods, services, and labor, shaping the behavior of buyers and sellers Legal and regulatory environment Laws and regulations at local, state, national, and international levels Multiple Environments of Business Market environment Target customers, influences on the behavior of those customers, and competitors with similar products Functional Areas in an Enterprise Manufacturing, production and operations Defines How the company makes what it makes (products) or does what it does (services) Purchasing, logistics, facilities management, quality Marketing Understand and identify opportunities in the market Develop the products to address those opportunities Create brand, and promotion strategies Set prices and distribution channels Functional Areas in an Enterprise Research and development (R&D) Functional area responsible for conceiving and designing new products Information technology (IT) Systems that promote communication and information usage through the company, or that allow companies to offer new services to their customers Functional Areas in an Enterprise Finance and Accounting Getting the funds it needs to operate Monitoring and controlling how those funds are spent Keep records for managers and outside audiences (investors, tax) Human resources (HR) Recruiting, hiring, developing, and supporting employees Business services Help company with legal needs, banking, real estate, and other areas Exhibit 1.8 Elements of Professionalism Exhibit 1.7