What is a Business
-What a Business Does
-Characteristics of Businesses:-
-They consist of a number of people.
-The people who belong to them will share some values and views about the purpose of the businesses. -They will have incomes and costs, profits and losses.
-They need different types of resources to produce different goods and services. -They need to coordinate a number of different activities done by different individuals.
-Types of business:-
Type of BusinessDescriptionExamples
Public SectorAny part of the nation’s economy that is controlled and operated by the state.Local authorities, schools, government departments, hospitals, armed forces. Private sectorBusinesses that are not controlled by the state.Sole traders, partnerships, producer and consumer cooperatives. Not-for-ProfitThe primary aim of such organisations is in terms other than financial profitability (not implying that its aim would be a loss)Charities, voluntary organisations, clubs, societies, trade unions, pressure groups. For ProfitThe primary aim of such organisations is to make profit.Railways, airlines, nationalized industries.
-Morgan’s Metaphors to define a business :-
Metaphors are the process of facilitating business and link it in our daily lives. Morgan uses metaphors to illuminate and extend our thinking regarding the question, “what is business”. The ‘images of organization’ offered by the following eight metaphors: MetaphorExplanation
A machinebusinesses are designed and operated like machines with visible structures and procedures An organismWhen the environment around businesses change (like organisms), so does the business. A brainSeeing the business as a brain means realising that it has to be able to respond to change in a rational manner A cultureBusiness culture is made up of values, perspectives, and principles to people who work there. A political systemA political system: Businesses are not only about structure, they are also about politics and power. A psychic prisonSome businesses are constrained by themselves. A vehicle for dominationBusinesses can be or attempt to be dominant i.e. they can impose or try to impose/ A Flux and transformationto truly understand a business, you should understand that it develops, grows, regenerates in order to survive.
The External Environment: Objectives
-A business exists within an external environment consisting of the actions of other players who are outside the business. In order to characterize the external environment, the STEEP model uses five headings of sociological, technological, economic, environmental, and political factors.
-Steep stand of five factors:-
-Demographic changes in the age and structure of populations, patterns of work, gender roles, patterns of consumptions and the ways in which the culture of a population or country changes and develops.
-Business have been greatly affected by information and communication technology (ICT) -ICT is lowering barriers of time and place and opening up great global opportunities for businesses. -ICT creates new industries, in starting up new businesses, e-commerce. -Many individual jobs and internal service functions have been transformed and are now based on ICT systems.
-It includes economic growth, interest rates, inflation, energy prices, exchange rates and levels of employment. -The level of the country’s economic growth also affects the business. -Environmental Factors
-Business need to consider a number of environmental factors: -Legislation: rules and regulations put to control pollution and waste disposal. -Information: recognizing the interests of local community, and environmental performance. -Employees: employees concern about environmental credentials of their employers. -Shareholders: most shareholders of large...