Module 1
Introduction to Business
Management
What Will Be Covered
▪ Overview of Business Management
o Key Concepts
▪ Organization Structures
o Organizational Types
o Main Business Functions
▪ Business Participants and Staffing Model
▪ Business Management Activities and Influencing Factors
▪ Graded Discussion Post 1
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Business Management
Management
Management is an art of getting things done through and with
people in formally organized groups. It is an art of creating an
environment in which people can perform and individuals can co-
operate towards attainment of group goals.
Source: Harold Koontz
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Business Management
Business management:
▪ Is the coordination and organization of business activities.
▪ Includes all of the aspects of overseeing and supervising
business operations.
▪ Is the act of allocating resources to accomplish business
strategy and goals
▪ Is comprised of planning, organizing, staffing, leading or directing, and controlling an
organization (a group of one or more people or entities) or effort for the purpose of
accomplishing a goal
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Business Activities
A business can:
▪ Provide goods and activities to consumers for the purpose of making a
profit, or
▪ Provide social or educational services (e.g. government, and non-
profits)
▪ In both case, they establish goals and work to meet them in an
effective and efficient manner.
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Relationship of Efficient and Effective Management
Means doing the EFFICIENT(Means) EFFECTIVE (Ends) Means doing
task correctly appropriate
Resource Goal Attainment
with the least tasks, i.e., fitting
possible cost
Usage the square pegs
with minimum Doing things right Doing the right things in square holes
wastage of and round pegs
resources Low Waste High Attainment in round holes.
Management Strives for:
Low Resource Waste (high efficiency)
High Goal Attainment (high effectiveness)
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Business Management High Level Workflow
ACTIVITIES
INPUTS AND OUTPUTS
PROCESSES
Raw materials Administration Goods
Physical Assets Processes Services
Capital Operations Products for Sale
People
Systems
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Business Functions
Business Functional Areas
Human Accounting/
Marketing Sales
Resources Finance
Production/ R&D/
Customer Information
Operations Product
Service Technology
Development
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Marketing
Marketing Functions
▪ Carrying out market research to obtain feedback on potential and existing
products and/or services
▪ Performing market research and analysis and advising senior managers of the
results and implications
▪ Promote products and services through a variety of advertising and promotional
methods, e.g. press, TV, online, direct mail, sponsorship and trade shows or
exhibitions
▪ Obtain and update profiles of existing customers to target advertising and
promotions appropriately
▪ Produce and distribute marketing copy and publicity materials (e.g. catalogues,
brochures, etc.…)
▪ Design, update and promote the company website and social media platforms
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Sales
Sales Functions
▪ Organizing sales promotions
▪ Responding to customer enquiries
▪ Selling the product or service to customers, either over the telephone or face to face
▪ Preparing quotations or estimates for customers
▪ Negotiating discounts or financial terms for business customers
▪ Providing technical advice Keeping customer records up to date
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Human
Human Resource Functions Resources
▪ Responsible for recruitment which involves: posting of job vacancies, receiving and recording all
job applications, arranging interviews and notifying candidates of the result, sending a contract
of employment and other essential information to new staff
▪ Monitoring the working conditions of staff
▪ Checking health and safety and keeping accident records
▪ Carrying out company welfare policies, e.g. long-service awards and company loans
▪ Advising managers on the legal rights and responsibilities of the company and its employees
▪ Keeping records of grievances and disciplinary actions and their outcome
▪ Monitoring the terms and conditions of employment, including wage rates
▪ Maintaining staff records
▪ Liaising with staff associations or trade unions which represent the workforce
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Accounting/
Finance/Accounting Functions Finance
ACCOUNTING FINANCE
▪ Measure, summarize, and communicate ▪ Producing invoices, checking payments are received
financial and managerial information and and chasing up overdue payments
advise other managers on financial ▪ Recording money received and checking and paying
matters. invoices received
▪ Preparation of financial statements to
▪ Preparing the payroll and paying staff salaries
stakeholders (internal and external) assess
▪ Monitoring departmental budgets to check
managers are not overspending Issuing regular
the financial strength of the organization budget reports to all departmental managers
▪ Prepare information, such as reports on ▪ Producing cash flow forecasts and regular financial
the cost of materials used in the reports for senior managers
production process, for internal use only ▪ Advising senior managers on sources of finance for
capital expenditure.
▪ Producing the statutory accounts each year
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Production/
Productions/Operations Functions Operations
▪ Ordering (often buying) stocks of raw materials from approved suppliers
▪ Storing and checking the stocks of raw materials
▪ Planning production schedules to maximize machine capacity and staff levels
▪ Producing or assembling the finished product
▪ Checking the quality of the product throughout the production process
▪ Checking production is on schedule and resolving delays or problems
▪ Packing and storing the final products before distribution
▪ Scheduling routine machinery inspections and maintenance
▪ Carrying out repairs to machinery and equipment as required
▪ For a knowledge-based business it could entail supporting technology
products
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R&D/Product
R&D/Product Management Functions Management
Note that the exact activities will depend upon the industry.
▪ In the pharmaceutical industry, scientists research and develop new medicines
and drugs
▪ In the food industry, technologists work with chefs to prepare new products such
as ready meals, sauces or flavorings.
▪ Electronic and IT companies concentrate on new technology products and
software, such as HD televisions, the X-box 360 and iPod accessories
▪ In the aerospace and car industries, engineers focus on improving performance
and safety whilst reducing emissions or noise. Designers concentrate on the
shape and look, both internally and externally
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Customer
Customer Service Functions Service
▪ Answering customer enquiries about products and services
▪ Providing specialist information and advice to meet customer needs
▪ Solving customer problems, providing after-sales service, including
replacing damaged goods, arranging for repairs or for spare parts to be
obtained and fitted
▪ Dealing with customer complaints according to company procedures
▪ Analyzing records of customer complaints to resolve problem areas
▪ Using customer feedback to improve customer service and satisfaction
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Information
Information Technology Functions Technology
▪ Recommending new/updated systems and ▪ Connecting new or additional equipment to
software to keep abreast of technological the system Installing a security system which
developments and the needs of the business limits access to authorized users and
▪ Buying and installing new hardware and protects against hackers and viruses
software and providing information or training ▪ Technically maintaining the company website
as appropriate ▪ Monitoring staff computer use for
▪ Assisting users who have computer problems compliance with the company IT policy
Repairing the computer system when required ▪ Operating a back-up system for critical data
▪ Advising on/obtaining/issuing computer so this can be recovered quickly in an
supplies and consumables emergency
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Forms of Business Ownership
Business Structure Types
Sole Proprietorship Private Company (Incorporated) Public Company (Incorporated)
• Simple setup, minimal capital • More complex to s6etup and run • Large businesses that have many
• Name registration • Legal entity is separate from its financial and reporting obligations
• No separate taxes owners, where owners are not • General public and other
• No legal different between the usually liable for company debts institutions can buy share into the
owner and the business • Owned by shareholders who are company
• Owner(s) is entitled to all profits often the company managers • Structure is good for a major
• Lack of continuity • Ownership can transfer capital injection, allowing the
business to expand
Partnership Franchise Non-profit/Government
• Combines resources with a • A business (franchisor) authorizes • Includes, charities, government
partner a franchise to be setup under its and government agencies
• No separate taxes name in return for a fee • Structure similar to that of a
• Minimal capital to start up • Franchisor needs less capital than company
• All profits go to both partners it otherwise would to develop a • Generate substantial sums of
• Liabilities are split between business money from donations, citizen
owners • Franchisee takes on a known taxes that gets put right back into
• Partnership Agreement required successful business model and operations
name and minimizes risks 20
Organization Structures and Roles
Organizational Structures
TALL ORGANIZATION FLAT ORGANIZATION
More management layers and Fewer management layer and
more hierarchical controls. decision making closer to the
Narrow span of control. customer. Wide span of
control.
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Tall Organization
Benefits Drawbacks
▪ Clarity and managerial control. ▪ When the structure gets too tall
▪ Narrow span of control allows for communication begins to take
close supervision of employees. too long to travel through all the
levels.
▪ Clear, distinct layers with
obvious lines of responsibility, ▪ Communication problems
control, and a clear promotion hamper decision-making and
structure. hinder progress.
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Flat Organization
Benefits Drawbacks
▪ Offer more opportunities for ▪ Managers may have heavier
employees to excel clarity and workloads
managerial control. ▪ Many employees report to a
▪ Flexible and better able to adapt single manager can make the
to changes quickly manager’s job impossible
▪ Allows employees to make
decisions
▪ Lean towards a democratic
decision making
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Organizational Roles
Business Participants
The main participants in a business are:
• Owner(s)
• Employees
• Stakeholders
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Business Stakeholders
Stakeholders have a
legitimate interest in
the success for failure
of the business and
the policies the
business adopts.
Source: Foundations of Business
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Common Levels of Management
Top Management
• Set objectives
• Scan environment
• Plan and make decisions
C-Suite
Directors
Middle Management
• Allocate resources
Regional Managers
• Oversee first-line managers
General Managers
• Report to top management
Department Managers
• Develop and implement plans
Functional Manager, etc.
Supervisory Management
• Coordinate activities
Team Leads, Supervisors • Supervise employees
• Report to middle managers
• Oversee day-to-day operations 28
Additional Levels of Management
Board of Directors BOD
C-Suite All titles that begin with C (CAO,
Executives CEO, CFO, CTO, CIO, etc.
Directors Sr. Leadership
Mid-Level Management Managers, Sr. Managers
Includes: Project Mgrs.,
Supervisors/Team Leads
Program Mgrs.
Includes: Professionals
Staff
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Management Roles
Decision Interpersonal Informational
Roles Roles Roles
Needed for organizational Bridge the gap between Handle, analyze and share
decision making executives and employees information across the
Creates a team environment organization
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Management Skills for Business Management
DIAGNOSTIC
CONCEPTUAL
Essential to analyze the
Essential for solving
course of action for complex
complex problems
situations that could disrupt
the organizational health
POLITICAL INTERPERSONAL
Essential for building the Fundamental for leaders
foundation of the business. to motivate and
Skills used to establish communicate with
connections employees
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Discussion Question 1
On the discussion board answer the following question. Please
write a short paragraph and aim to include 3 reasons.
Question
Why should the data analyst have a general understanding of
Business Management?
Due Date: January 24, 2023
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Business Management Activities
& Influencing Factors
Business Management Processes
1. Planning
▪ Strategic
▪ Tactical
▪ Operational
▪ Contingency
2. Organizing
3. Leading
4. Monitoring & Controlling Source: Fundamentals of Business
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Planning
STRATEGIC TACTICAL OPERATIONAL CONTINGENCY
Strategic plans are designed Tactical plans support Operational plans sit at the Contingency plans are
with the entire organization strategic plans by translating bottom of the totem pole; back up plans for when
in mind and begin with an they are the plans that are things fail. These are
them into specific plans
organization's mission. Top- made by frontline, or plans that deal with
level managers, design and relevant to a distinct area of managers/supervisors. alternative course of
execute strategic plans to the organization. Operational plans are action. Contingency
paint a picture of the desired Tactical plans are concerned focused on the specific plans are created to deal
future and long-term goals of with the responsibility and procedures and processes. with what might happen if
the organization. Strategic functionality of lower-level Managers must plan the these assumptions turn
plans look ahead to where departments to fulfill their routine tasks of the out to be wrong. A
the organization wants to be department using a high contingency plan allows
parts of the strategic plan.
in three, five, even ten years. level of detail. management to act
Strategic plans, serve as the Can be single use and only immediately if an
framework for lower-level used once. unplanned occurrence of
planning an operational event.
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Video: Types of Business Plan
Organizing
▪ Once plans are made, decisions must be made about how to
best implement the plans.
▪ The organizing function involves deciding how the organization will be
structured (by departments, matrix teams, job responsibilities, etc.).
▪ Organizing involves assigning authority and responsibility to various
departments, allocating resources across the organization, and defining how
the activities of groups and individuals will be coordinated.
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Leading
▪ Leaders use knowledge, character, and charisma to generate enthusiasm and
inspire effort to achieve goals.
▪ Managers must also lead by communicating goals throughout the organization,
by building commitment to a common vision, by creating shared values and
culture, and by encouraging high performance.
▪ Managers can use the power of reward and punishment to make people
support plans and goals.
▪ Leaders inspire people to support plans, creating belief and commitment.
Leadership and management skills are not the same, but they can and do
appear in the most effective people.
Supervision Motivation Communications Leadership
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Monitoring and Controlling
▪ Observing and responding to “ what” actually happens, is called controlling.
▪ Controlling is the process of monitoring activities, measuring performance, comparing results to
objectives, and making modifications and corrections when needed.
▪ Controlling may be the most important of the four management functions. It provides the
information that keeps the corporate goal on track.
▪ By controlling their organizations, managers keep informed of what is happening; what is working
and what isn’t; and what needs to be continued, improved, or changed.
A 5 Step Control Process
Step 2 Step 3 Step 4 Step 5
Step 1
Performance Deviations Deviation Corrective
Standards
Measurement from Standards Reasons Action
Video: The Management Process 38
Business Cycle
▪ A typical cycle runs from
three to five years but could
last much longer. Though
typically irregular, a cycle
can
▪ Is divided into the following
general phases of expansion,
peak, recession, depression,
trough, recovery
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Video: Business Lifecycle
Influencing Factors on Business Activities
Source: Foundations of Business 40
Wrap Up
Main takeaways from module 1:
▪ Management is an art of getting things done through people by creating an environment where people can
perform to achieve organizational goals
▪ There are 8 common functions that of all forms of business include: marketing, sales, human resources,
accounting/finance, production/operations, R&D/product development, customer service, and information
technology
▪ The three most common forms of business ownership are: sole proprietorship, corporation, and partnerships.
Other ownership types are: government and non-profit and franchises.
▪ There are 2 main organizational structures a tall organization with a narrow span of control and a flat organization
with a wide span of control.
▪ The three common levels of management are top management, middle management, and supervisory
management
▪ The 4 steps in the business management process are: planning, organizing, leading, monitoring and control
▪ The business cycle can be divided into the following phases: expansion, peak, recession, depression, trough, and
recovery.
▪ Factors that influence business operations include economic, political, cultural, technological, demographic, and
natural factors.
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Thanks!
Any questions?
You can find me at:
[Link]@durhamcollege. ca
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Resources
Main Reference for this Module:
Fundamentals of Canadian Business, 2nd Edition (Open Textbook).
[Link]
• Chapter 2 – Foundations of Business
• Chapter 6 - Forms of Business Ownership
• Chapter 8 – Management and Leadership
• Chapter 9 – Structuring Organizations
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