BUSINESS MANAGEMENT SL&HL
UNIT 1: INTRO TO BUSINESS MANAGEMENT .................................................................................. 3
1.1 WHAT IS A BUSINESS? ...................................................................................................................3
1.2 TYPE OF BUSINESS ENTITIES...........................................................................................................4
1.3 BUSINESS OBJECTIVES ..................................................................................................................6
1.4 STAKEHOLDERS ............................................................................................................................8
1.5 MULTINATIONAL COMPANIES (MNCS) ............................................................................................. 14
UNIT 2: HUMAN RESOURCE MANAGEMENT: ................................................................................ 15
2.1 INTRODUCTION TO HRM ..................................................................................................................... 15
2.2 ORGANIZATIONAL STRUCTURE .......................................................................................................... 19
2.3 LEADERSHIP AND MANAGEMENT ........................................................................................................ 30
2.4 MOTIVATION AND DEMOTIVATION ........................................................................................................ 32
2.5 (HL) ORGANIZATIONAL (CORPORATE) CULTURE .................................................................................... 49
2.6 COMMUNICATION .............................................................................................................................. 52
2.7 (HL) INDUSTRIAL/EMPLOYEE RELATIONS .............................................................................................. 54
UNIT 3: FINANCE ............................................................................................................................ 58
3.1 INTRODUCTION TO FINANCE ............................................................................................................... 58
3.2 SOURCES OF FINANCE ...................................................................................................................... 58
3.3 COSTS AND REVENUES ..................................................................................................................... 60
3.4 FINAL ACCOUNTS ............................................................................................................................. 62
3.5 PROFITABILITY & LIQUIDITY RATIO ANALYSIS ........................................................................................ 65
3.6 (HL) EFFICIENCY RATIO ANALYSIS ...................................................................................................... 67
3.7 CASH FLOW ..................................................................................................................................... 68
3.8 INVESTMENT APPRAISAL .................................................................................................................... 72
3.9 (HL) BUDGETS................................................................................................................................. 73
UNIT 4: MARKETING ....................................................................................................................... 76
4.1 INTRODUCTION TO MARKETING .......................................................................................................... 76
4.2 MARKETING PLANNING ...................................................................................................................... 78
4.3 (HL) SALES FORECASTING................................................................................................................. 82
4.4 MARKET RESEARCH.......................................................................................................................... 83
4.5 THE 7 P’S OF MARKETING MIX ............................................................................................................ 86
4.6 (HL) INTERNATIONAL MARKETING ....................................................................................................... 91
UNIT 5: OPERATIONS MANAGEMENT ............................................................................................ 93
5.1 INTRODUCTION TO OPERATIONS MANAGEMENT .................................................................................... 93
5.2 OPERATIONS METHODS ..................................................................................................................... 94
5.3 (HL) LEAN PRODUCTION & QUALITY MANAGEMENT ................................................................................ 95
5.4 LOCATION ...................................................................................................................................... 102
5.5 BREAK-EVEN ANALYSIS ................................................................................................................... 105
5.6 (HL) PRODUCTION PLANNING .......................................................................................................... 107
5.7 (HL) CRISIS MANAGEMENT & CONTINGENCY PLANNING ...................................................................... 115
, 5.8 (HL) RESEARCH & DEVELOPMENT ................................................................................................... 118
5.9 (HL) MANAGEMENT INFORMATION SYSTEMS ..................................................................................... 122
BUSINESS MANAGEMENT TOOLKIT ............................................................................................ 139
BMT 1 – SWOT ANALYSIS ................................................................................................................ 139
BMT 2 – ANSOFF MATRIX ..................................................................................................................... 140
BMT 3 – STEEPLE ANALYSIS ................................................................................................................... 142
BMT 4 – BOSTON CONSULTING GROUP MATRIX ........................................................................................ 144
BMT 5 – BUSINESS PLANS...................................................................................................................... 146
BMT 6 – DECISION TREES ...................................................................................................................... 147
BMT 7 – DESCRIPTIVE STATISTICS .......................................................................................................... 148
BMT 8 – CIRCULAR BUSINESS MODELS .................................................................................................... 150
(HL) BMT 9 – GANTT CHART ................................................................................................................... 152
(HL) BMT 10 – PORTER’S GENERIC STRATEGIES ...................................................................................... 153
(HL) BMT 11 – HOFSTEDE CULTURAL DIMENSIONS ................................................................................... 155
(HL) BMT 12 – FORCE FIELD ANALYSIS .................................................................................................... 158
(HL) BMT 13 – CRITICAL PATH ANALYSIS.................................................................................................. 160
(HL) BMT 14 – CONTRIBUTION ............................................................................................................. 162
(HL) BMT 15 – SIMPLE LINEAR REGRESSION.......................................................................................... 164
,UNIT 1: INTRO TO BUSINESS MANAGEMENT
1.1 WHAT IS A BUSINESS?
THE NATURE OF BUSINESS
It is an organisation with the aim of make profit (not always) through the sale of good and services.
INPUTS AND OUTPUTS OF A BUSINESS
INPUTS AND OUTPUTS
To produce goods and services, businesses need to combine human, physical and financial resources in
an effective way.
• Inputs: Money, supplies, equipment, entrepreneurship
• Outputs: Goods and services, profit (taxes) growth
Economists call these resources factors of production, which are comprised of:
• Land: Natural resources used to make goods and services, like water, timber, minerals, and
animals.
• Labour: Human effort used in producing goods and services like farmer, teacher, builder.
• Capital: Man-made resources like machinery, tools, and buildings needed for production, often
funded by money.
• Entrepreneurship: The skills and knowledge of people who manage the production process and
take risks to make a profit like restaurant owner, inventor, manager
BUSINESS FUNCTIONS/DEPARTMENTS
MARKETING DEPARTMENT
Focuses on customer interaction, brand visibility and revenue generation through various strategies
FINANCE DEPARTMENT
Takes care of the company’s money to keep it profitable and stable
HUMAN RESOURCES DEPARTMENT
Manges the company workforce, focusing on employee’s well-being, development and
organizational structure
OPERATIONS DEPARTMENT
Focuses on day-to-day operations and delivery of the company’s products or services
, BUSINESS SECTORS
• Primary Sector – extraction of natural resources, most important sector
• Secondary Sector – manufacturing or construction, it transforms primary sector outputs into
finished goods
• Tertiary Sector – providing services and selling finished goods
• Quaternary Sector – creating or sharing knowledge and information
ENTREPRENEURSHIP
Means starting and running your own business
Are people who take smart risks to build new companies
ATTRIBUTES OF ENTREPRENEUR
• Visionary
• Economic builder
• Creative
• Risk taker
• Leader
• Perseverance
CHALLENGES OF STARTING A BUSINESS
• Difficulty raising finance
• Finding customers
• Finding partners/employees
• Lack of experience
1.2 TYPE OF BUSINESS ENTITIES
PUBLIC AND PRIVATE SECTOR
Private Sector: Business owned by individuals/organization with aim to make profit. Work alone but
follow government rules
Public Sector: Services and organizations owned by the government to provide help to the public. Paid
by taxes and can be free or have a fee
TYPES OF FOR-PROFIT ORGANIZATIONS
SOLE TRADERS
A business owned and operated by one person who has full control and unlimited liability
UNIT 1: INTRO TO BUSINESS MANAGEMENT .................................................................................. 3
1.1 WHAT IS A BUSINESS? ...................................................................................................................3
1.2 TYPE OF BUSINESS ENTITIES...........................................................................................................4
1.3 BUSINESS OBJECTIVES ..................................................................................................................6
1.4 STAKEHOLDERS ............................................................................................................................8
1.5 MULTINATIONAL COMPANIES (MNCS) ............................................................................................. 14
UNIT 2: HUMAN RESOURCE MANAGEMENT: ................................................................................ 15
2.1 INTRODUCTION TO HRM ..................................................................................................................... 15
2.2 ORGANIZATIONAL STRUCTURE .......................................................................................................... 19
2.3 LEADERSHIP AND MANAGEMENT ........................................................................................................ 30
2.4 MOTIVATION AND DEMOTIVATION ........................................................................................................ 32
2.5 (HL) ORGANIZATIONAL (CORPORATE) CULTURE .................................................................................... 49
2.6 COMMUNICATION .............................................................................................................................. 52
2.7 (HL) INDUSTRIAL/EMPLOYEE RELATIONS .............................................................................................. 54
UNIT 3: FINANCE ............................................................................................................................ 58
3.1 INTRODUCTION TO FINANCE ............................................................................................................... 58
3.2 SOURCES OF FINANCE ...................................................................................................................... 58
3.3 COSTS AND REVENUES ..................................................................................................................... 60
3.4 FINAL ACCOUNTS ............................................................................................................................. 62
3.5 PROFITABILITY & LIQUIDITY RATIO ANALYSIS ........................................................................................ 65
3.6 (HL) EFFICIENCY RATIO ANALYSIS ...................................................................................................... 67
3.7 CASH FLOW ..................................................................................................................................... 68
3.8 INVESTMENT APPRAISAL .................................................................................................................... 72
3.9 (HL) BUDGETS................................................................................................................................. 73
UNIT 4: MARKETING ....................................................................................................................... 76
4.1 INTRODUCTION TO MARKETING .......................................................................................................... 76
4.2 MARKETING PLANNING ...................................................................................................................... 78
4.3 (HL) SALES FORECASTING................................................................................................................. 82
4.4 MARKET RESEARCH.......................................................................................................................... 83
4.5 THE 7 P’S OF MARKETING MIX ............................................................................................................ 86
4.6 (HL) INTERNATIONAL MARKETING ....................................................................................................... 91
UNIT 5: OPERATIONS MANAGEMENT ............................................................................................ 93
5.1 INTRODUCTION TO OPERATIONS MANAGEMENT .................................................................................... 93
5.2 OPERATIONS METHODS ..................................................................................................................... 94
5.3 (HL) LEAN PRODUCTION & QUALITY MANAGEMENT ................................................................................ 95
5.4 LOCATION ...................................................................................................................................... 102
5.5 BREAK-EVEN ANALYSIS ................................................................................................................... 105
5.6 (HL) PRODUCTION PLANNING .......................................................................................................... 107
5.7 (HL) CRISIS MANAGEMENT & CONTINGENCY PLANNING ...................................................................... 115
, 5.8 (HL) RESEARCH & DEVELOPMENT ................................................................................................... 118
5.9 (HL) MANAGEMENT INFORMATION SYSTEMS ..................................................................................... 122
BUSINESS MANAGEMENT TOOLKIT ............................................................................................ 139
BMT 1 – SWOT ANALYSIS ................................................................................................................ 139
BMT 2 – ANSOFF MATRIX ..................................................................................................................... 140
BMT 3 – STEEPLE ANALYSIS ................................................................................................................... 142
BMT 4 – BOSTON CONSULTING GROUP MATRIX ........................................................................................ 144
BMT 5 – BUSINESS PLANS...................................................................................................................... 146
BMT 6 – DECISION TREES ...................................................................................................................... 147
BMT 7 – DESCRIPTIVE STATISTICS .......................................................................................................... 148
BMT 8 – CIRCULAR BUSINESS MODELS .................................................................................................... 150
(HL) BMT 9 – GANTT CHART ................................................................................................................... 152
(HL) BMT 10 – PORTER’S GENERIC STRATEGIES ...................................................................................... 153
(HL) BMT 11 – HOFSTEDE CULTURAL DIMENSIONS ................................................................................... 155
(HL) BMT 12 – FORCE FIELD ANALYSIS .................................................................................................... 158
(HL) BMT 13 – CRITICAL PATH ANALYSIS.................................................................................................. 160
(HL) BMT 14 – CONTRIBUTION ............................................................................................................. 162
(HL) BMT 15 – SIMPLE LINEAR REGRESSION.......................................................................................... 164
,UNIT 1: INTRO TO BUSINESS MANAGEMENT
1.1 WHAT IS A BUSINESS?
THE NATURE OF BUSINESS
It is an organisation with the aim of make profit (not always) through the sale of good and services.
INPUTS AND OUTPUTS OF A BUSINESS
INPUTS AND OUTPUTS
To produce goods and services, businesses need to combine human, physical and financial resources in
an effective way.
• Inputs: Money, supplies, equipment, entrepreneurship
• Outputs: Goods and services, profit (taxes) growth
Economists call these resources factors of production, which are comprised of:
• Land: Natural resources used to make goods and services, like water, timber, minerals, and
animals.
• Labour: Human effort used in producing goods and services like farmer, teacher, builder.
• Capital: Man-made resources like machinery, tools, and buildings needed for production, often
funded by money.
• Entrepreneurship: The skills and knowledge of people who manage the production process and
take risks to make a profit like restaurant owner, inventor, manager
BUSINESS FUNCTIONS/DEPARTMENTS
MARKETING DEPARTMENT
Focuses on customer interaction, brand visibility and revenue generation through various strategies
FINANCE DEPARTMENT
Takes care of the company’s money to keep it profitable and stable
HUMAN RESOURCES DEPARTMENT
Manges the company workforce, focusing on employee’s well-being, development and
organizational structure
OPERATIONS DEPARTMENT
Focuses on day-to-day operations and delivery of the company’s products or services
, BUSINESS SECTORS
• Primary Sector – extraction of natural resources, most important sector
• Secondary Sector – manufacturing or construction, it transforms primary sector outputs into
finished goods
• Tertiary Sector – providing services and selling finished goods
• Quaternary Sector – creating or sharing knowledge and information
ENTREPRENEURSHIP
Means starting and running your own business
Are people who take smart risks to build new companies
ATTRIBUTES OF ENTREPRENEUR
• Visionary
• Economic builder
• Creative
• Risk taker
• Leader
• Perseverance
CHALLENGES OF STARTING A BUSINESS
• Difficulty raising finance
• Finding customers
• Finding partners/employees
• Lack of experience
1.2 TYPE OF BUSINESS ENTITIES
PUBLIC AND PRIVATE SECTOR
Private Sector: Business owned by individuals/organization with aim to make profit. Work alone but
follow government rules
Public Sector: Services and organizations owned by the government to provide help to the public. Paid
by taxes and can be free or have a fee
TYPES OF FOR-PROFIT ORGANIZATIONS
SOLE TRADERS
A business owned and operated by one person who has full control and unlimited liability
