1.1 Introduction to Business Management
• What is a business?
• Decision-making company or organization
• May/may not be for profit
• Involves the exchange of goods and services
• Produce goods and/or provide services
• Exist to satisfy the needs and wants of people, organizations, governments, etc.
• Enterprise – a group of people that tackles an objective, usually profit
• Quality of output depends on quality of inputs
• Main inputs in a business
• Capital
• Amount of money needed to run a business
• Man-made goods like machines, buildings, vehicles, and equipment
needed for business to operate
• Investment – increasing spending on capital
• Land
• Space where a business operates
• Raw materials and natural resources that are used in making a product
• Labor/manpower
• Physical & mental efforts of people to produce products/services
• Enterprise/entrepreneurship
• Management, organization, and planning of other three factors of
production
• Actions of entrepreneur who shows initiative and takes risks to set up,
invest, and run a business
• Main business functions and their roles
• Human resources
• Manages the workforce and laborers of the company
• Deals with recruitment, wages, communication, and motivation of
employees
• Finance and accounts
• In charge of managing the organization’s money and assets
• Ensures accurate recording and reporting of financial documentation (to
comply with legal requirements)
• Marketing
• Ensure that a company’s products sell
• Concerned with identifying and satisfying consumers’ needs/wants
• In charge of promotions, advertisements, etc.
• Operations
• In charge of business functions and processes that produce the actual
goods
, • Concerned with research & development, delivery, stock management,
etc.
• Business sectors (or economic sectors)
• Primary
• Involves the harvesting of naturally available resources
• e.g. mining, agriculture, livestock, drilling, and logging
• Regulated and protected by the government
• Fuels (produces inputs for) the other economic sectors
• Example countries: Vietnam, Philippines, Canada, Dubai
• Example companies: Philex Mining, Del Monte, Dole
• Secondary
• Involves manufacturing of raw products to finished or component goods
• Finished goods – exported or sold to domestic consumers
• Component goods – sold to companies in the tertiary sector
• Example countries: China, Scotland, Japan, Italy, USA
• Example companies: Coca-Cola, Honda, Del Monte
• Tertiary
• Involved with service and retail
• Includes retail sales, transportation, entertainment, restaurants, media,
healthcare, banking, etc.
• Exploited in developing countries
• Philippines is a victim of brain drain: where professionals go
abroad to look for jobs making it difficult for companies in the tertiary sector to
find the employees they need
• Relies on the primary and secondary sector for inputs
• Example countries: USA, United Kingdom, Singapore, Hong Kong
• Example companies: JP Morgan, Convergys, Lotte
• Quaternary
• Involves intellectual activities or innovation services
• Includes government, education, libraries, scientific research, information
technology, etc.
• Impact of sectoral change
• Change in economic structure (primary to secondary, secondary to tertiary, etc.)
• Industrialization
• When a country moves towards the manufacturing sector as its
principal output and employment (primary to secondary)
• Products become more refined and have more export potential
• Raises the standard of education
• Opens better job opportunities
• Developed nation
• Exploits the tertiary sector as the national output of employment
• Further raises the standard of education
• Examples of effects of shifting to the tertiary sector
, • For a labor intensive manufacturer of aluminum cans
• Quality of products improve
• More distributors
• Less employees and higher wages for employees
• Can consider turning to robots and machines, as well as
outsourcing
• For the owner of a small seaside bed and breakfast
• Easier to find competent employees
• More income due to higher demand
• More competition
• People would rather work for bigger companies
• Can consider expanding
• For a family-owned vegetable farm
• More demand due to more stores
• Opportunity for a “dampa” system
• Less laborers
• Can consider opening a small business or outsource
• Entrepreneurship (and the entrepreneur) vs. intrapreneurship (and the intrapreneur)
• Entrepreneurship is the process of starting a business, company, or organization
• The Entrepreneur
• The founder, and usually owner
• Big risk, big reward
• Organizes inputs of production into goods and services (outputs)
• Obtains money, buys the inputs needed and makes decisions.
• Takes risks and provides the vision for the business idea
• Assumes large financial risk
• Provides sufficient resources
• Intrapreneurship is similar to entrepreneurship but is done in an existing
organization
• The Intrapreneur
• Is an employee of the organization
• Uses resources of company to undertake projects and therefore risks very
little
• Rewarded in the form of a paycheck
• Does not act autonomously like an entrepreneur as he is dependent on
other employees or the organization he works for
• Reasons for starting up a business or an enterprise
• Profit – positive difference between revenues and costs
• Fame
• Benefit human welfare
• Very fulfilling
• Family
• Legacy
• Common steps in starting up a business and problems new ones may face
• What is a business?
• Decision-making company or organization
• May/may not be for profit
• Involves the exchange of goods and services
• Produce goods and/or provide services
• Exist to satisfy the needs and wants of people, organizations, governments, etc.
• Enterprise – a group of people that tackles an objective, usually profit
• Quality of output depends on quality of inputs
• Main inputs in a business
• Capital
• Amount of money needed to run a business
• Man-made goods like machines, buildings, vehicles, and equipment
needed for business to operate
• Investment – increasing spending on capital
• Land
• Space where a business operates
• Raw materials and natural resources that are used in making a product
• Labor/manpower
• Physical & mental efforts of people to produce products/services
• Enterprise/entrepreneurship
• Management, organization, and planning of other three factors of
production
• Actions of entrepreneur who shows initiative and takes risks to set up,
invest, and run a business
• Main business functions and their roles
• Human resources
• Manages the workforce and laborers of the company
• Deals with recruitment, wages, communication, and motivation of
employees
• Finance and accounts
• In charge of managing the organization’s money and assets
• Ensures accurate recording and reporting of financial documentation (to
comply with legal requirements)
• Marketing
• Ensure that a company’s products sell
• Concerned with identifying and satisfying consumers’ needs/wants
• In charge of promotions, advertisements, etc.
• Operations
• In charge of business functions and processes that produce the actual
goods
, • Concerned with research & development, delivery, stock management,
etc.
• Business sectors (or economic sectors)
• Primary
• Involves the harvesting of naturally available resources
• e.g. mining, agriculture, livestock, drilling, and logging
• Regulated and protected by the government
• Fuels (produces inputs for) the other economic sectors
• Example countries: Vietnam, Philippines, Canada, Dubai
• Example companies: Philex Mining, Del Monte, Dole
• Secondary
• Involves manufacturing of raw products to finished or component goods
• Finished goods – exported or sold to domestic consumers
• Component goods – sold to companies in the tertiary sector
• Example countries: China, Scotland, Japan, Italy, USA
• Example companies: Coca-Cola, Honda, Del Monte
• Tertiary
• Involved with service and retail
• Includes retail sales, transportation, entertainment, restaurants, media,
healthcare, banking, etc.
• Exploited in developing countries
• Philippines is a victim of brain drain: where professionals go
abroad to look for jobs making it difficult for companies in the tertiary sector to
find the employees they need
• Relies on the primary and secondary sector for inputs
• Example countries: USA, United Kingdom, Singapore, Hong Kong
• Example companies: JP Morgan, Convergys, Lotte
• Quaternary
• Involves intellectual activities or innovation services
• Includes government, education, libraries, scientific research, information
technology, etc.
• Impact of sectoral change
• Change in economic structure (primary to secondary, secondary to tertiary, etc.)
• Industrialization
• When a country moves towards the manufacturing sector as its
principal output and employment (primary to secondary)
• Products become more refined and have more export potential
• Raises the standard of education
• Opens better job opportunities
• Developed nation
• Exploits the tertiary sector as the national output of employment
• Further raises the standard of education
• Examples of effects of shifting to the tertiary sector
, • For a labor intensive manufacturer of aluminum cans
• Quality of products improve
• More distributors
• Less employees and higher wages for employees
• Can consider turning to robots and machines, as well as
outsourcing
• For the owner of a small seaside bed and breakfast
• Easier to find competent employees
• More income due to higher demand
• More competition
• People would rather work for bigger companies
• Can consider expanding
• For a family-owned vegetable farm
• More demand due to more stores
• Opportunity for a “dampa” system
• Less laborers
• Can consider opening a small business or outsource
• Entrepreneurship (and the entrepreneur) vs. intrapreneurship (and the intrapreneur)
• Entrepreneurship is the process of starting a business, company, or organization
• The Entrepreneur
• The founder, and usually owner
• Big risk, big reward
• Organizes inputs of production into goods and services (outputs)
• Obtains money, buys the inputs needed and makes decisions.
• Takes risks and provides the vision for the business idea
• Assumes large financial risk
• Provides sufficient resources
• Intrapreneurship is similar to entrepreneurship but is done in an existing
organization
• The Intrapreneur
• Is an employee of the organization
• Uses resources of company to undertake projects and therefore risks very
little
• Rewarded in the form of a paycheck
• Does not act autonomously like an entrepreneur as he is dependent on
other employees or the organization he works for
• Reasons for starting up a business or an enterprise
• Profit – positive difference between revenues and costs
• Fame
• Benefit human welfare
• Very fulfilling
• Family
• Legacy
• Common steps in starting up a business and problems new ones may face
