THE FIELD OF STUDY

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20 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

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THE FIELD OF STUDY
OF BUSINESS
MANAGEMENT

Study unit 1

2

LECTURE OUTLINE

1
INTRODUCTION

2
NEED SATISFACTION

3
BUSINESS MANAGEMENT FIELD OF STUDY

4
BUSINESS ENTERPRISE AND OPERATING UNIT

5
BUSINESS MANAGEMENT AS A SCIENCE

6
BUSINESS MANAGEMENT VE ECONOMICS

7
FACTORS OF PRODUCTION

8
FUNCTIONAL APPROACH

9
SYSTEMS APPROACH

10
STUDY UNIT REVIEW

11
APPLICATION QUESTIONS






3

INTRODUCTION

Primary field of study: establishment and management of businesses

Business Management: principles by which businesses are managed to
achieve objectives successfully

Entrepreneurs driving force behind economic progress


businesses = firms = enterprises


NEED SATISFACTION


Motive


drive satisfying needs

Maslow’s hierarchy of needs




4

NEED SATISFACTION

To satisfy needs: scarce resources required

Scarce resources = factors of production (FOP)

Businesses perform conversion processes to create products and services
from these four factors of production:


inputs


outputs


Economic problem:

unlimited/various needs BUT







limited/scarce resources (FOP)

Economic motive:

the drive to satisfy needs by






acquiring products and services

Economic principle:

(how is this to be done)





to achieve the highest possible
output

of




products and services to satisfy needs by




using the lowest possible
inputs

(scarce FOP/




limited resources)





Minimise input ; maximise output


5

BUSINESS MANAGEMENT


FIELD OF STUDY


Business management as a science



Free market system and profit motive



What a business is



How a business is established and managed



The role of entrepreneurs in establishing and managing a business in the
free market system



The business functions performed in an enterprise to deliver the required
products and services to customers

6

BUSINESS ENTERPRISE AND OPERATING UNIT

ENTERPRISE



independent economic entity


legal entity for certain forms of business enterprises


continuity


own decisions


accepts risks, uncertainty, rapid change


profitable use of factors of production


remunerates factors of production


uses operating unit to achieve goals and objectives


TYPES OF ENTERPRISES


Private enterprises, public corporations, non
-
profit enterprises


7

BUSINESS ENTERPRISE VS OPERATING UNIT

OPERATING UNIT



physical, visible production unit


transformation (conversion) process takes place


production of products and provision of services


found in every economic system


in free market system its survival depends on business enterprise


not just a factory, may be a shop, store, warehouse, bank branch,
restaurant, etc.


8

BUSINESS ENTERPRISE VS OPERATING UNIT

PLANT




HUMAN ELEMENT




OPERATING UNIT (ESTABLISHMENT)




ALL OTHER BUSINESS FUNCTIONS




ENTERPRISE

9

BUSINESS MANAGEMENT AS A SCIENCE


body of knowledge


proved through observation, experimentation and/or logical argument


theories not yet proven wrong


theories formulated in Business Management relate to the establishment
and management of businesses


object of study/empirical object


Q:

what is observed/studied?


A:

business enterprise and its operating unit(s)


problem statement/angle of investigation/cognitive object


Q:

what is the angle of investigation/viewpoint to be researched?


A:

maximisation of the rate of return on capital invested


applied/practical science


normative science


providing guidelines/principles

10


Economic principle re
-
stated:



To achieve the greatest economic return
(income) with the lowest possible means of
production (cost)


11

BUSINESS MANAGEMENT VS ECONOMICS

BUSINESS MANAGEMENT

ECONOMICS

Private business enterprises
concerned about customer need
satisfaction and pursuit of rate of
return through means of production,
eg., income generation of enterprise
and its operating unit

Concerned about need satisfaction in
the national economy as a whole, eg.,
income generation, income
distribution and income expenditure
for the economy as a whole

Problem statement:

Economic principle

Problem statement:

Economic principle

Object of study:

business enterprises



establishment and management

Object of study:

total economy


economic phenomena

Smaller field of study: mainly concerned about
economic processes within an enterprise

12

FACTORS OF PRODCUTION/SCARCE RESOURCES (4)



Natural resources: occur naturally in earth’s environment


land including agriculture, minerals, forests, wind/water energy, fruits of
the sea


Human resources: physical and mental effort


workforce and working population


Capital: ownership of the enterprise’s assets


machinery, equipment, funds


Entrepreneurship: driving force


bear all the risks, enjoy all the spoils

13

SYSTEMS APPROACH


The systems approach assumes that all businesses comprises of
interdependent parts

that can only be understood by reference to the
whole. As such, a business may be analysed in terms of inputs, processes
and outputs.



synergetic principle


open or closed


every effort to achieve objective(s)


all systems are subsystems


open systems more complex