Summary Introduction to Business Management Chapter 1 Complete

Chapter 1
Role of business in society
 Human activities Resources
 Managed by people and operated by people
Transformation
 Production
 Transforming resources into products and services
Products
 Exchange
 Produce products and services in exchange for money
 Profit
 Reward for meeting people’s needs, enables businesses to pay resources and make a living

Businesses help indirectly with technological innovation, research and development. It satisfies
needs and improve the standard of living for society. Entrepreneurs create jobs, economic growth
and hopefully, prosperity

Entrepreneurs constantly search for new ideas, products, and technology. They initiate innovation
and change because of their decisions of investment, production, and employment, influencing



Sustainability themes
 Social responsibility
 Measured by its contribution towards employment opportunity and economy
 Provision of the safe workplace, housing, concern about health issues, environmental awareness, and
empowerment of previously disadvantaged people
 Have to behave as responsible citizens, make sure environment is safe

 Employment equity
 Aims to create equal employment opportunities for all and address inequalities of the past
 Ensures that workforces are composed in roughly the same proportions as the groups that make up the population
 Eliminate discrimination and ensures a diverse workplace

 Business ethics
 Focuses on ethical behaviour of managers and executives in the business world
 Managers especially, they often abuse their power
 Organizations have codes to set clear guidelines

 Consumerism
 Social force that protects consumers against unsafe products and malpractice by applying moral and economic
pressure on businesses
 South African National Consumer Union are the watchdogs
 SANCU forces producers to take full responsibility for ensuring their products and services comply with standards

,  Environmental sustainability
 Activists are forcing businesses to take the environment into consideration
 They are often responsible for air, water, and soil pollution
 Citizens often form pressure groups to protect the environment

Needs and need satisfaction
Multiplicity of human needs
 Work that community members do is related directly to needs satisfaction
 Highly industrialized communities, have many needs and requires large organizations to satisfy their needs
 Abraham Maslow put needs in a hierarchy, from most to least essential
 Physiological needs have to be met for survival
 Psychological needs things that make life more pleasant, but is not essential
 Society has limited resources to satisfy needs, also called factors of production


Physological
Lim ited
Safety U nlim ited resou rces:
needs: * N atural
Social 1. Physio lo gical Satisfactio resou rces
2. Safety n of
* H um a n
Esteem 3. So cial society's
n ee ds resou rces
4. Esteem
Self realisation 5. Self - * C apital
realisatio n *
En trep reneu rship

Limited resources
 Natural resources (production factor of land)
 Agricultural land, industrial sites, residential stands, minerals and metals, forests, water (resources that comes from
nature)
 The amount cannot be increased hence scarcity


 Human resources (production factor of labour)
 The abilities and skills of employees to produce products and services
 Size of labour force and availability of production factor depends on
 Size of population
 Level of education and training
 Valuable labour force has to be trained for a period to produce required
 Human skills are important, without, natural and financial resources can’t be utilized productively
 Capital
 Buildings, equipment, cash registers, computers, and other objects manufactured for the purpose of producing final
consumer products
 Reason for scarcity of capital, it takes years to build up stock of capital
 Owners or suppliers of capital are usually paid in the form of interest or rent