MNB1501 - Business Management 1A

MNB1501 - Business Management 1A Study Unit 1: The Business World and Business Management The role of business in society Transformation of resources into goods and services society needs Business cannot operate without society Needs and values of society influence what business does. i.e. protecting the environment Organizations influence behavior patterns of people in a particular society by developing new products. i.e. Impact of cell phones, tablets etc. on social life. Success of business has an impact on the prosperity of a society. i.e. mining towns Elements of business: 1. Human activities -managed or operated by people 2. Production - transform resources into products and services. 3. Involves Exchange - products & services for money or other goods/services 4. Profit - reward for meeting people's needs Market system/market economy = individuals themselves decide what to produce, how to produce and what price of their product will be. Business world = a complex system that involves the transformation of resources into goods and services that must meet the needs of people in exchange for a profit. Transformation: The process whereby resources are transformed into goods and services that satisfy society's needs. Also known as the production process. Business world is underincreasing pressure to ensure: Social responsibility - limiting malpractice through regulation. Social responsibility measured by the contribution of a business towards employment opportunities, equity, empowerment. Business ethics - closely related to social responsibility. Business ethics focuses specifically on the ethical behaviour of managers and directors, executives of organizations. Affirmative action or equity regarding organization workforce - aimed at creating equal employment opportunities - Employment equity Act 1998 Environmental damage - pressure groups to protect environment from all types of pollution, Businesses are frequently responsible for air, water, soil and for the detrimental effects on fauna and flora. Consumerism - protects consumers against unsafe products and malpractice by exerting moral and economic pressure on businesses. Needs and need satisfaction Humans have varied and unlimited needs Society has limited resources (money) to satisfy those needs, which requires a choice to be made about how best to utilize the limited resources for maximum benefit.. Economic Principal = Decision to obtain the maximum benefit (satisfaction) with the limited resources According to Maslow, all humans have same basic needs, but not everybody strives to satisfy the same ones. Once basic needs (hunger) are satisfied, we strive to satisfy the next level i.e. security etc.