UnderstandingBusinessConcepts

WhatisBusiness? Organization: When two or more people get together and agree to coordinate their activities in order to achieve their common goals, an organization has been born.

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Source: http://www.socyberty.com/People/What-is-Organization.18921

A business can be defined as an organization that provides goods and services to others who want or need them. When many people think of business careers, they often think of jobs in large wealthy corporations. Many business-related careers, however, exist in small businesses, non-profit organizations, government agencies, and educational settings.
Source: College of Liberal Arts, University of Minnesota

Business as System System Theory: Hegel developed in the 19th century a theory to explain historical development as a dynamic process. Marx and Darwin used this theory in their work. System theory (as we know it) was used by L. von Bertalanffy, a biologist, as the basis for the field of study known as general system theory, a multidisciplinary field (1968). Some influences from the contingency approach can be found in system theory. System is a set of interacting or interdependent entities, real or abstract, forming an integrated whole. The fundamental systems-interactive paradigm of organizational analysis features the continual stages of input, throughput (processing), and output, which demonstrate the concept of openness/closedness.

MGT1101introductiontobusiness

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A closed system does not interact with its environment. It does not take in information and therefore is likely to atrophy, that is to vanish. In the other word, closed systems are considered to be isolated from their environment. For instance, thermodynamics applies to closed systems. The term often refers to an idealized system in which closure is perfect. In reality no system can be completely closed; there are only varying degrees of closure. Open systems are systems that allow interactions between its internal elements and the environment. An open system receives information, which it uses to interact dynamically with its environment. Openness increases its likelihood to survive and prosper. Basic characteristics of an open system are environment, input, throughput and output. And some control systems with feedback. Figure11:OpenSystemModel Input Throughput resourcesare theprocessof takenorreceived conversionor fromtheexternal transformationof environment resourceswithina system

Output theworkofsystem, exportedbackinto environment

Feedback continuingsourceofinformationconcerningthe relationshipwiththeenvironmentusedtomake thenecessarychangesinordertosurviveandto grow

Source: http://www.cw.utwente.nl/theorieenoverzicht/Theory%20clusters/Communication%20Processes/System_Theory. doc/ http://en.wikipedia.org/wiki/Organizational_studies

MGT1101introductiontobusiness

Factors of Production

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Land, labor, capital, and entrepreneurship: These are four generally recognized factors of production. Of course, in a literal sense anything contributing to the productive process is a factor of production. However, economists seek to classify all inputs into a few broad categories, so standard usage refers to the categories themselves as factors. Before the twentieth century, only three factors making up the "classical triad" were recognized: land, labor, and capital. Entrepreneurship is a fairly recent addition.
Source: http://www.enotes.com/business-finance-encyclopedia/factorsproduction www.sptimes.com/.../Who_is_an_entrepreneu.shtm

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Internal Influences in Business In business a number of key tasks, or functions, must be done regularly. The main ones you are likely to meet in business are shown below. 5 Main Functional Areas in Business Management: Management in all business and human organization activity is simply the act of getting people together to accomplish desired goals and objectives. Marketing: Marketing is all about identifying and meeting customer needs. In this case, everyone in the organization is trained to put the customer first from the production worker, who has to produce high quality goods, to the accounts clerk, who must respond to a customer enquiry promptly and accurately. Production or Operations: Area of business concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient in terms of using as little resource as needed, and effective in terms of meeting customer requirements. It is concerned with managing the process that converts inputs (in the forms of materials, labor and energy) into outputs (in the form of goods and services). Accounting: Accountancy or accounting is the art of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management. Finance: Businesses will often need money to fulfill specific aims and objectives linked to growth, expansion or simply updating their equipment or machinery. These items may be bought from money held back (reserved) from past profits, but usually additional money will be needed. If the business needs to borrow money it will want the cheapest interest rates possible and also want good repayment terms. Deciding where to obtain these funds is a specialist job and normally the task of the senior financial manager.
Sources: http://www.bized.co.uk/educators/16-19/business/btec.htm http://en.wikipedia.org/wiki/

MGT1101introductiontobusiness

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What is Product?

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One of the most basic ideas in economics is product (output). Product can be classified into goods and services. More than anything else, money is spent on goods and services. It helps to know the difference between two. A goods is something that you can use or consume, like food or CDs or books or a car or clothes. You buy goods with the idea that you will use it, either just once or over and over again. A service is something that someone does for you, like giving you a haircut or fixing you dinner or even teaches you social studies. You don't really get something solid, like a book or a CD, but you do get something that you need. Now, a service can also contain goods. Someone who fixes you dinner gives you food, which was bought. In this example, the food is the goods and the person's fixing it for you is the service. Remember, the one thing that sets goods and services apart is the ability to touch them. You can touch a good, but you can't touch a service. You can touch the result of a service but not the service itself.
Sources: http://www.socialstudiesforkids.com/articles/economics/goodsandservices2.htm http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01627.html

External Forces in Business External Forces in business are all outside factors that may affect an organization make up the external environment. The political and legal dimensions of the external environment include regulatory parameters within which an organization must operate. Political parties create or influence laws, and business owners must abide by these laws. Tax policies, trade regulations, and minimum wage legislation are just a few examples of political and legal issues that may affect the way an organization operates.

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The technological dimension of the external environment impacts the scientific processes used in changing inputs (resources, labor, money) to outputs (goods and services). The success of many organizations depends on how well they identify and respond to external technological changes. For example, one of the most significant technological dimensions of the last several decades has been the increasing availability and affordability of management information systems (also known as MIS). Through these systems, managers have access to information that can improve the way they operate and manage their businesses. The economic dimension reflects worldwide financial conditions. Certain economic conditions of special concern to organizations include interest rates, inflation, unemployment rates, gross national product, and the value of the U.S. dollar against other currencies. A favorable economic climate generally represents opportunities for growth in many industries, such as sales of clothing, jewelry, and new cars. But some businesses traditionally benefit in poor economic conditions. The alcoholic beverage industry, for example, traditionally fares well during times of economic downturn. The global dimension of the environment refers to factors in other countries that affect U.S. organizations. Although the basic management functions of planning, organizing, staffing, leading, and controlling are the same whether a company operates domestically or internationally, managers encounter difficulties and risks on an international scale. Whether it is unfamiliarity with language or customs or a problem within the country itself (think swine flu), managers encounter global risks that they probably wouldn't have encountered if they had stayed on their own shores.
Source: http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/The-ExternalEnvironment.topicArticleId-8944,articleId-8859.html

MGT1101introductiontobusiness