Business Management

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Business Management

1 Intro to Bus Man as science - Study Unit 1 & 2
Man science uses a scientific approach to solver many problems. Used in variety of orgs to sove different types of problems. Encompasses a logicical mathematical approach to problem solving 1.1 Man science process

Observation - Identification of a problem that exists in the system or organization. •Definition of the Problem - problem must be clearly and consistently defined showing its boundaries and interaction with the objectives of the organization. •Model Construction - Development of the functional mathematical relationships that describe the decision variables, objective function and constraints of the problem. •Model Solution - Models solved using management science techniques. •Model Implementation - Actual use of the model or its solution. 1.2 Factors of production

Natural resources i.e. crude oil
Capital i.e. investors
Labour i.e. technical and academic
Entrepeneurship i.e. takes capital and link labour and natural resouces combined with risk to provide goods and services. Knowledge i.e. to determine wants and needs quickly and to respond to them with products and services. 1.3 3 Most NB Economic systems

= Capatalism, Socialism and Communism
1.3.1 Capatalism
Free market system
Built on principles of private ownership
Is based on the right to make a profit, right to compete and the right to own property. System is market driven and the solutions to a country's economic problems are left to the market forces to solve. 1.3.2 Communism

Centrally controlled system
Based on the ideas of Karl Marx nd Friedrich Engels.
All assets belong to the people
All people must work in order to receive goods and services that are due. All assets and liabilities belong to the state.
State determines the price of production and services.
State controls all means of production and therefor no private ownership or profits for the individual. State appoints the management, also determines the salaries and employment opportunities. 1.3.3 Socialism

Mixed system
Political and economic theory which is market orientated.
Has characteristics of both capatalist and communist systems. Most important production factorsare owned by the state and inlcude primary industries like steel, oil, gold and coal. Some free and private ownership is allowed.

No competition exists between state owned enterprises as price and quality of products are fixed.

1.4 Entrepreneurship
1.4.1 Factors that influence choice of establishment
The market
Raw materials
Availibility of labour
Capital
Infrastructure
1.4.2 Influences of existing business environment
Climate i.e. wet or cold weather.
Government intervention
Political stability
Available industrial premises
Personal considerations
Characteristics of the business
Social environment
Determining optimal place of establishment
Step 1: Assign each establishment factor a weight, depending on factors' imporrtance to this business. Step 2: Calculate the quantifiable cost and amounts for each establishment factor. Step 3: Allocate points on a sliding scale to the non- quantifiable factors. Step 4: Draw up a list of info collected

Step 5: Determine the disadvantage associated with each place of establishment. 1.5 Business environment
1.5.1 Characteristics of the business environment
Business environment changes constantly.
Business must be in step wioth changing environment
Both opportunities and threats exist in business environment Growth and continued existence of the establishment are directly influence by the business environment. Influences the future of the business

Internal and external environments with variables
Micro-environment - Occur internally in the business and are influenced direct or indirectly by the decisions of management. Variables
Mission statement and goals of the business
The business's functions
Production factors
Market environment - Link between the...
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