module 1- intro business

8/8/2019 Module 1- Intro Business

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THE BUSINESS:

ITS NATURE AND SCOPE


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Chapter line-

up: Meaning

Characteristics

Objectives Requisites of a successful business

Scope of business

Types of industry

Brief about commerce

Difference between business and

profession.


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MEANING OF BUSINESS:

The etymology of "business" relates to the state

of being busy either as an individual orsociety as a whole, that which engages thetime, attention, or labour of any one, as hisprincipal concern or interest, whether for a

longer or shorter time; constant employment;regular occupation; as, the business of life;

business before pleasure.

DEFINITION OF BUSINESS:

According to Prof.Own, Business is any enterpriseengaged in production and distribution of goodsand services for sale in a market or rendering

services for a price.


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CHARACTERISTICS OF

BUSINESS: Sale or transfer of goods for value:

One of the basic characteristics of business is sale or transfer of goods

and services for value.

Example: Man shaving his beard is not considered as business were as

if he sets up a salon and offers the same service to various

customers for a price is business.

Dealing in goods and services:

Business implies dealing in either goods or services.

Example: goods include clothes, watches, tools, machinery, etc..

Services include transport service,

hospitality, web services etc..


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Recurrences of dealings:

An isolated or a single transaction cannot be called business.

Business involves constant and continuous transactions i.e,

buying and selling of goods and services.Example: an old car sold cannot be called a business whereas

constant dealing in sales of second hand cars can

constitute business.

Profit motive:

Profit is the main reason for formation of business units. It is the biggest and

powerful stimulus for running a business.

Example: clothes given away to orphans cannot be business, clothes sold for

a certain margin of profit is business.

Risk involvement:

Business activities focus on future and future is unknown and uncertain.

Hence the level of risk in business is high and inevitable. Profit or returns

depend upon the degree of risk involved.


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OBJECTIVES OF BUSINESS

BUSINESS

ECONOMIC

Satisfactory prices

Creation of

customersMaking innovation

Profit maximization

Growth

SOCIAL

Quality goods

Fair worker deal

Fair return to

investorsFair trade practices

Fair deal to

suppliers


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REQUISITES OF A SUCCESSFULBUSINESS:

Clear objectives: determination of objectives is one

of the most essential prerequisites of business. Theobjectives set forth have to be realistic andachievable.

Planning: a pre-determined course of action. Theaccomplishment of objectives depends upon a the

plan to a great extent.

Sound organization: organization of a business isharmonious combination of men, machine,material, money, management, etc. so all thesehave to work together to achieve the goals and in

an effective manner.

Research: it is a systematic search for newknowledge. Research is needed to find out newstrategies, make plans, set goals and to organizethe business setup.


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Finance: is said to be the life blood of the business enterprise. Itbrings together all the resources like labor, materials, machine andcombines them for production. It is the lubricating oil needed tomove the business wheel constantly.

Proper plant location, layout and size: the success of the businessalso lies upon is internal strength which is comprised of the land itis located, size and its layout. Businessmen must take sufficient carein the initial stages of selecting a good suitable location for his/herbusiness otherwise the business may flounder.

Effective management: one of the reasons for failures of businessoften attributed to as their poor management skills. The one man,i.e, the proprietor may not be equally good in all the areas of hisbusiness but should and must inculcate a good management talent.

Harmonious relations with the employees: employees occupies adistinct role in any business enterprise. They are the living resourceof the organization and hence a cordial and harmoniousrelationship should be maintained in order to get the best out ofthem.


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INDUSTRY

What is an industry?

Industry refers to the processesof extraction and productionof goods meant for final

consumption or use byanother industry.

Goods used by the finalcustomers is called asconsumer goods.

Goods which are used by otherindustries for furtherproduction purpose is calledas producer goods.


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INDUSTRIES

EXTRACTIVE &GENETIC

CONSTRUCTION

MANUFACTURING

INDUSTRIES:

1. Analytical2. Processing

3. Synthetic

4. Service

5. Assembly line


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EXTRACTIVE INDUSTRIES:

Industries which are concerned with theextraction and utilization of natural

resources from earth, sea, and air. The

products of these industries are used

for manufacturing and constructive

industries for their finished productproduction.

Examples: fishing, mining, fruit gathering,

agriculture, afforestation and hunting.


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GENETIC INDUSTRIES:

Genetic engineering, genetic modification (GM), and

gene splicing are terms for the process ofmanipulating genes in an organism, usually outside

of the organism's normal reproductive process.

Example: breeding plants, cattle breeding, fish

hatcheries, poultry farms.

AstraZeneca, Amgen, GlaxoSmithKline (GSK),

Biogen, Celltech Group, Genzyme.


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MANUFACTURING INDUSTRIES

Engaged in the conversion of raw materials into semi

finished goods and into fully finished goods to meet

the purpose of selling the products and generating

revenues. They account for a large part of the totalbusiness activities on the whole.

Example: cotton textile, steel industries, detergent

manufacturers, furniture makers etc..


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ANALYTICAL INDUSTRIES

The basic product is analyzed and, inturn many products are emerged fromone single product.

Example: kerosene, petroleum, gas, diesel etc.


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PROCESSING INDUSTRY

A product has to pass through severalprocesses before a final product is obtained.

The finished product of one process appears as

a raw material to the next process.

South Dagon, Gold Roast Co.,Ltd., Ko Ko CandySweet, Rainbow Industry Ltd., Star Diamond

International Co., Ltd., Date International Co., Ltd.


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SYNTHETIC INDUSTRIES:

Ingredients are brought together and are combined orsynthesized in the manufacturing process to produce a newproduct.

Example: yarn spinning, paint making and soap making industries. Arasan Group Of Companies, Nirma Limited, Sun Chemicals, GTN

Industries Limited, Krishtex


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SERVICE INDUSTRIES

Industries concerned with rendering of services.

Examples: hotels, railways, aero planes, shipping.


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ASSEMBLY INDUSTRIES

The finished products are produced byassembling various parts or components

bought from other business to arrive at a

new product.

Example:

Dell, nokia, Ford,

samsung, LG,

Toshiba, Whirlpool,

Sony, Cannon,

Titan, Ferrari, Fossil

etc


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CONSTRUCTION INDUSTRIES

These industries are concerned with thecreation of infrastructure facilities forfacilitating other activities. Engineering andarchitecture skills play an important role.

Examples : Salarpuria Properties PL, Alpha

Constructions, Hindustan Construction Co Ltd,Aditya Birla Nuvo Limited


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COMMERCE

Commerce includes all those activities which arenecessary to bring goods and services from theplace of their production to the place of their

consumption.


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FUNCTIONS OF COMMERCE

Hindrances of persons

Hindrances of exchange

Hindrances of place Hindrances of time

Hindrances of information


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DEFINITION MANAGEMENT:

To manage is to forecast, to plan, to organize, to command, to coordinate

and to control.

- HENRY FAYOL

Management is knowing exactly what you want men to do and then seeing

that they do it in the best and cheapest way

- F. W. TAYLOR


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CHARACTERISTICS OF MANAGEMENT:

1.Management is a group activity: - Management is an essential part of

group activity. As no individual can satisfy all his desires himself, he unites

with his fellow- being and works in an organized group to achieve what he

cannot achieve individually.

2. Management is goal-oriented: - Management aims to achieveeconomic and social objective. It exists to achieve some definite goals or

objectives. Group efforts in management are always directed toward the

achievement of some pre-determined goals.

3. Management is universal in character: - Management is applicable in

all types of organization. Whenever there is human activity, there is

management. The basis principle of management are

universal application and can be applied in all organization whenever they

are business, social, religious, cultural, sport, educational, politics or

military.


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4. Management is needed at all levels of the organization: - Another

important feature of management is that it is needed at all levels of

the organization, e.g. top level, middle level and supervisory level. The

only difference is of the nature of task and the scope of authority.

5. Management is a social process: - Management is getting things

done through others. This involves dealing with people. The efforts of

the human beings have to be directed, co-ordinate and regulated by

management in order to achieve the desired results.

6. Management is a system of authority: - Since management is a

process of directing men to perform a task, authority to accomplish

the work from others is implied in the every concept of management.

Management cannot perform in the absence of authority.

7. Management is a dynamic function: - Management is a dynamic

function and it has to be performed continuously. It is constantly

engaged in the molding of the enterprise in an ever charging business

environment.


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8. Management is an art as well as a science: - Management is a science

because it has developed certain principle which is of universal

application. But the result of management depend upon the personnel

skills of managers and in this sense management is an art.

9. Management is a profession: - In the present days, management is

recognized as a profession. It has a systematic and specialized body of

knowledge .

10. Management aims at maximising profits: - the available resources are

properly utilised to get desired results. The results should be the

maximizing or increasing profits by the economic function of a manager.


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DIFFERENCE BETWEEN MANAGEMENT &

ADMINISTRATION:

The term administration and management are used

synonymously. Running of a businesss requires skills which

is called Management and functioning of governmentdepartments and non-profit institutions requiring skil is

called Administration.


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ADMINISTRATION

Determines policy to be followed

& decide the objectives to be

achieved.

Functions are largely Legislative.

Its a top-level function

Planning, Organizing, Staffing.

Requires administration ability

more than technical ability.

Is a thinking function.

MANAGEMENT

Implement the policy & achievethe objectives.

Directly involves in the execution

of the plan & achieving the

objectives.

Its a lower-level management

Direction, Motivation & Control.

Requires technical ability more

than administration ability.

Is a doing function.


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SCOPE OF MANAGEMENT:

1. SUBJECT MATTER OF MANAGEMENT includes the various functionssuch as Planning, Organizing, Staffing, Directing & Control.

2. FUNCTINALAREAS OF MANAGEMENT - consists of the following areas:

Financial Management - cost control, bedgetary control, management

accounting.

Personnel Management recruitment, training, promotion, retirement,

social security, labor welfare.

Production Management production planning, production controland quality control.


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Office Management office layout, equipment layout.

Marketing Management price determination, channels of

distribution, market research, sales promotion & advertising.

Maintenance Management maintenance of building, plant &

machinery, furniture.


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FUNCTIONS OF MANAGEMENT:

1. PLANNING - its the primary function of management.

Planning refers to deciding in advance as to what would be done in

the near future.

In an organisation it is important to achieve the objectives, in orderto achieve them planning helps to determine what is to be done,

how it is to be done and by whom it is to be done.

Planning pervades Management.

Thus, planning includes determination of the objectives, setting

policies & procedures, determining projects, setting strtegies,

budgeting.


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2. ORGANISING is the distribution of work in group wise or section

wise for effective performance .

Organisation divides the total work and co-ordinates all the

activities by authority relationship. Besides organizing defines the

position of each person in the organization and also decides the path

through which the communication should flow.

organising consists of conscious co-ordination of people towards a

desired goal. - KOONTZ & ODONNEL


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3. STAFFING - involves manpower planning & manpower management.

it includes preparing inventory of personnel available, requirement ofpersonnel, sources of manpower selection, their selection, remuneration,training & development and periodic appraisal of personnel working

It is the placement of the right persons in the right jobs.

The success of any organisation depends upon the successful performanc ofstaffing function.


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4. DIRECTING actual performance of the work.

Direction deals with making the workers learn the techniques toperform the jobs assigned to them.

It includes Guidance, Supervision & Motivation of the employees.

Directing concerns the total manner in which a manager influences

the action of his subordinates. It is the final action of a manager ingetting others to act after all the preparations have been completed.


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5. CONTROLLING - is the last function of management.

It is to see whether the activities have been performed in conformity withthe plans or not.

it is the process of checking to determine whether or not, proper

progress is being made towards the objectives and goals and acting, if

necessary to correct any deviation.

- PROF. HAIMANN

a good system of control has the characteristics of : economy, flexibility ,

understanding and adequacy to organisational needs.


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THANK YOU.

OPEN FOR QUERIES

-NEHA.A.JAIN- PRIYADARSHINI.S

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