Business Foundations: A Changing World
Chapter 1
The Dynamics of Business and Economics
Business is a practice whereby individuals and organizations engage in economic activities through the provision of goods and services that fulfill their consumer needs. The provision of these goods and services is mainly driven by the goal of making profits although there are organizations whose goal is not to make a profit but to provide goods and services.
To make significant profits, individuals and organizations have to be able to productively balance the art of applying skills such as marketing, management skills, financial resource management, adapting to change, and acting ethically in their businesses. Whereas the economics, natural resources, human resources, financial resources, and several intangible resources are the key pillars of business enterprises, the understanding of the demographics surrounding the business.
It is critical the individual and organizations fully design their businesses to fit the economic systems surrounding their business which could be socialism, communism, and capitalism, or a mixed economy.
Chapter 2
Business ethics and social responsibility
Lack of business ethics can significantly undermine the success of a business enterprise.
Adherence to business ethics and social responsibility is the key determinant of the reputation of any business.
Stakeholders expect unwavering observation of the set standards in the society even if it means lowering the anticipated profit for the firm.
Chapter 3
Business in a Borderless World
Movement of people across national boundaries opened up buying selling and provisions of services between individuals and organizations from different nations.
Nations engage in trade due to comparative advantages when a monopoly exists in a nation and to outsource products and services. Nations have to balance their trade with other nations to avoid or reduce trade deficits which can arise if they end up importing more than what it can export.
Business in a borderless world is, however, facing several setbacks such us economic ethical, legal-political, technological and social and cultural barriers.
Chapter 4
Options for Organizing Business
Sole proprietorships involve one individual owning and operating a business.
Sole proprietorships are more common is the service provision sector than in the manufacturing of goods. Partnership on the other hand is the association of two or more persons as the co-owners of a business.
A partnership can be limited or general, in a general partnership, owners share the management roles and liability of the business whereas in a limited partnership, at least one partner has to assume unlimited liability and at least one partner assumes liability for his/her investment in the partnership.
Chapter 5
Small Business, Entrepreneurship, and Franchising.
Entrepreneurship is a process of introducing, developing, and running a business to achieve desirable results. It is becoming the primary driver of the development of small businesses which generates up to 63% of new jobs and constitutes 42% of the United State’s private payroll.
Starting a small business requires entrepreneurs to generate concepts, create business plans, strategies, and plan then finally make decisions on the variable surrounding the business. These decisions cut across forms of ownership such as sole proprietorship, partnership, and corporation to financial resources which involves choosing between debt financing or equity financing.
Chapter 6
Nature of management
During the management of a business, planning provides a vital role in establishing the right objectives for the organization which will offer increased profits, operational efficiency and growth, and competitive advantage. They provide information on who, what, how, when, and where will operations of the business take place.
Management is an essential element in running business since every organization requires effective means of acquiring resources which will enable them to effectively pursue their objectives and effectively coordinate the transformation of resources into goods and services.
Successful leadership is key to normal operations in an organization. Leaders can use autocratic democratic or free-reign leadership styles to effectively communicate the organization’s objectives and expectations, empower employees to make decisions, and successfully direct the employees collectively to work towards the organization’s goals.
Chapter 7
Organization, Teamwork, and Communication
Organizational culture defines how activities and decision making are done in an organization, it is guided by the sharing of beliefs, values, philosophies, rules, and a role model behavior.
Organizations rely on specialization culture, the classification of labor into small groups with specific tasks which can be assigned to employees as a single task, this practice helps improve efficiency, time wastage, ease training and reduce overloading an employee with numerous tasks.
Organizational management varies with the size and culture of an organization. The span of management in vary with the size of the organization, a narrow span of management is in organizations with many layers of managers while a wide span on management is in organizations with few layers of management.
Chapter 8
Managing Service Manufacturing Operation
Operation management calls of entrepreneurs into the skills to create and run a business that will transform resources into goods and activities.
The transformation process in the manufacturing, production, and operation sector requires the application of either technology, administrative procedures, and equipment or a combination of inputs to develop a tangible or intangible product.
Computer-assisted designs have a significant influence on daily operations in several businesses. It has helped scale up the application of robotics technology in processing and manufacturing businesses.
Chapter 9
Motivating Work Force
Businesses retain employees by challenging them to be more productive, providing adequate incentives and employee growth opportunities.
Business owners motivate their employees through open and friendly interactions, offering incentives and rewards, providing constructive criticism and both negative and positive feedback, resolving conflicts transparently and professionally, making the employees feel like partners rather than workers, etc.
A classical move to improve employee productivity workers should divide jobs into small groups which will allow specialization, device means of improving the performance of every task, and specify the desired outcome of every task.
Chapter 10
Managing Human Resource
Human resource is one of the most fundamental elements of an organization, planning for necessities such as a number of employees, analysis of tasks and determining job description and specification give the organization the power to forecast and develop operational strategies.
The performance of employees of an organization is key to achieving its goals and making profits. Organizations, therefore, have to assess the performance of each employee to obtain the basis of establishing the right compensation and determine the quality of the organization’s training development activities and selection.
Diversity in organizations provides opportunities for the employees to learn how to respect differences and improves productivity, work relationships, and the ability to deliver valuable produces to a diverse consumer base.
Chapter 11
Customer-Driven Marketing
Marketing of organizations products increases the organization’s ability to increase sales. it offers opportunities to create value for the product so that the consumers can get what they are looking for.
Crating value allows businesses to manage their markets and consumer relationship through improved consumer’s subjective assessment of the product’s direct benefits in relation to the cost of the product.
Marketing is driven by the theory that a business should at all times satisfy the consumer requirements through a coordinated operation that significantly promotes the organization’s objectives.
Chapter 12
Dimensions of Marketing Strategy
Marketing strategies mixed to come up with a marketing mix that involves decision-making on the manageable variables highly likely to provide the best results for the operation of the business.
The most effective marketing strategy will involve the right mix that will satisfy the consumer requirements, and build a long-term consumer and business relationship.
Products are classified according to consumer, conveniences, specialty, and shopping and this will inform the planners on the marketing strategies to adopt.
Chapter 13
Digital Marketing and Social Networking
Digital marketing, digital media, and E-business revolve around the utilization of internet, and electronic media to conduct business operations such as communicating with clients and online marketing.
Digital communications have generated a completely new dimension and tremendous business opportunities for organizations seeking to develop relationships with their consumers, target customers, and expand their market.
Relying on digital markets allows the organizations to capitalize on the fast and cheap communication platform, interact more with its market, and improve communications between organizations.
Chapter14
Accounting and Financial Statements
Open book management allows financial managers to share financial information on with employees and training them to interpret, understand, and utilize the information.
Financing of an organization is an activity met to provide financial capital to start a business and investments provide necessary assets for the operation of the business.
Everything owned or leased by an organization constitute the assets of the firm and owner’s equity will include all assets which can be claimed by stakeholders, partners, or individuals.
Chapter15
Money and Financial Systems
Financial systems of business enterprises deal with how the generally accepted currency by individual governments and organizations.
The majority of business owners use the financial institutions whereby they can withdraw or deposit or save as it suits the operation of the business.
Financial institutions allow individuals and organizations to purchase items or services with the promise that they will repay the institutions at a later date.
Chapter 16
Financial Management and Security Markets
Due to the heavy utilization of the credit system, most of the sales in small businesses are made through credit cards, this creates a need for proper management of receivables.
The means of production in an organization determines the optimal inventory levels which are solely managed by the financial manager, he/she should ensure that excess inventory is will not tie the finances of the organization and a shortage of inventory will not lead the customers to their competitors.
Capital budgeting is an essential process by which an organization can analyze its needs and select the best assets which will allow them to maximize the value of their products.
References
O.C. Ferrell, Geoffrey A. Hirt, Linda Ferrell, 2015, Business Foundations: A Changing World, eleventh edition, Mc Graw Hill foundation.