Learning_Unit_1

Introduction to Business Management

• Institution: IIE Rosebank College

• Learning Unit: Introduction to Business Management

Learning Content

• Theme 1: Business and Society

• Learning Outcomes:

  • LO1: Explain the concept of business management.

  • LO2: Discuss the four key elements of business.

  • LO3: Explain the purpose of business management.

  • LO4: Analyse the different economic systems in which a business may operate.

  • LO5: Discuss the three types of need-satisfying organizations.

  • LO6: Explain how the fourth industrial revolution (4IR) and sustainability impact businesses.

Defining Business Management

• Definition: Business management involves various functions:

  • Planning: Setting goals and developing strategies.

  • Organising: Coordinating resources and tasks.

  • Leading: Guiding and motivating employees.

  • Controlling: Monitoring performance and making corrective actions.

• Goal: To optimize resources, reduce risks, and increase profitability in a dynamic environment.

Important Definitions in Management

• Frederick Winslow Taylor: "Management is the art of knowing what you want to do and then seeing that they do it in the best and cheapest way."

• Mary Parker Follett: "The art of getting things done through people."

• Karl Marx et al.: "Using resources efficiently so the end product is valued more than initial resources."

• John F. Mee: "Securing maximum results with minimum effort for prosperity and service to the public."

Important Scholars in Management

• Frederick Winslow Taylor (1856-1915): Known for principles of scientific management.

• Henri Fayol (1841-1925): Developed administrative management theory and 14 principles.

• Frederick Irving Herzberg (1923-2000): Known for the motivation-hygiene theory.

• Henry Mintzberg (1939-Present): Proposed managerial roles categorized into interpersonal, informational, and decisional roles.

• Peter Ferdinand Drucker (1909-2005): Advocate for valuing customers and improving management practices.

• George Elton Mayo (1880-1949): Known for his work on employee satisfaction.

• Henry Ford (1863-1947): Revolutionized assembly line production.

Essential Functions of Management (POLC)

Planning

• Setting goals and developing action plans.

Organising

• Allocating resources and assigning tasks.

Leading

• Guiding and inspiring team members.

Controlling

• Monitoring performance and ensuring alignment with objectives.

Core Principles of Effective Management

• Clarity of Purpose: Align goals with mission and vision.

• Strategic Planning: Develop strategies for decision-making.

• Organisational Structure: Define roles and reporting relationships.

• Leadership: Motivate and guide teams.

• Continuous Improvement: Foster innovation and process improvement.

What is a Business?

• Definition: An organization or economic system where goods and services are exchanged.

• Requirements: Investment and customers.

• Types:

  • Private ownership (e.g., Capitec Bank)

  • State ownership (e.g., government entities)

• Forms:

  • Formal: Registered entities subject to taxes.

  • Informal: Unregistered entities not subject to taxes (e.g., vendors, hairdressers).

Meeting Societal Needs

• Role of Organizations: Address societal needs through resource allocation.

• Types of Need-Satisfying Organizations:

  • For-profit: Must generate profit (e.g., Pick ‘n Pay).

  • Non-profit: Receive funding but do not generate profit (e.g., SPCA).

  • State-owned: Produce goods/services believed vital for the economy (e.g., SAA, SABC).

Evolution of Economic Systems

• Purpose: Govern resource allocation and production.

• Key Questions Addressed by Economic Systems:

  • What products/services to produce?

  • How will they be produced?

  • Who will receive them?

• Main Economic Systems:

  • Capitalism

  • Socialism

  • Mixed economies.

Types of Economic Systems

Traditional Economy

• Based on agriculture and customs; rigid and slow to change.

Market Economy

• Based on private ownership and market competition; personal choices prevail.

Command Economy

• Central authority dictates production; includes socialist and communist systems.

Mixed Economy

• Combines features of both market and command economies.

The Importance of Institutions

• Institutions include businesses and organizations that fulfill needs and implement policies to improve social welfare. Collaboration is vital.

Entrepreneurship Overview

• Definition: Taking risks to create and grow a business for profit.

• Pathways to entrepreneurship include starting new ventures, buying businesses, or franchising.

• Contribution to Economy: Entrepreneurship fosters growth and innovation.

Factors of Production

• Definition: Resources used to produce goods and services.

• Four Factors:

  1. Natural Resources: Land, water, minerals.

  2. Human Resources: Labor force involved in production.

  3. Capital: Equipment and buildings.

  4. Entrepreneurship: Combines elements to create products.

Role of Small Businesses

• Importance: Employment creation, innovation, and local economic contribution.

• Policies should support small business growth (finance, education).

Historical Context of Industrial Revolutions

• First Revolution: Mechanisation and steam power.

• Second Revolution: Electricity and mass production.

• Third Revolution: Digital technology and automation.

The Fourth Industrial Revolution (4IR)

• Definition: Characterised by convergence of technologies (AI, IoT, robotics).

• Challenges: Job displacement and ethical implications.

IT's Contribution to Globalization

• Infrastructure Development: Facilitates global connectivity and e-commerce.

IT's Role in Technological Advancements

• Innovation Acceleration: Drives advances in various technology fields.

Sustainable Business Practices

• Aim to meet current needs while preserving future resources.

• Adoption of Sustainable Development Goals (SDGs).

Conclusion

• Significance of Business Management: Key to structuring and guiding organizations toward sustainable growth and success.