BUSINESS MANAGEMENT
Business organization → a systematic arrangement of people brought together to accomplish some
specific purpose (think about structure, goals and people)
Management → process of doing things effectively (ends) and efficiently (means)
- Top management: president, CEO, executive vice president
- Middle management: plant, division, department
- Front-line management: foreman, supervisor, office
- Non-managerial employees: everyone else
(Effective: doing the right things to achieve the best results)
(Efficient: making the best use of your resources)
Leaders → make sure people follow them (inspire values of the company)
Managers → make sure everyone does what they are supposed to (keep order)
- H. Fayol: functions (planning, organizing, leading, controlling)
- H. Mintzberg: roles (interpersonal, informational, decisional)
- R. Katz: skills (conceptual, interpersonal, technical, political)
Sector → group of markets with common attributes, part of an industry
- Primary (allied services): raw materials
- Secondary (manufacturing): processing of materials
- Tertiary (service): distribution of materials
Industry → general business or enterprise, named after main product
Market → group of targeted customers who require the products/services provided by an industry
Stakeholders → individuals or groups that have a(n) (in)direct impact on the organization
(customers, employees, investors, partners, suppliers, competitors, government, environment)
Capital → tools, buildings, land, human capital
Other terms →
- Profit: make profit but invest in own company back
- Non-profit: prioritize profits
- Public: owned by the government (thanks to taxes)
- Private: owned by private organizations
- Local: same city, town or geographical area
- National: within the borders of a country
- Global: many countries around the world
- International: sells worldwide but facilitates in home country
, STRATEGY
Planning → organizing and setting a structure and strategy to achieve your goals
- Keep control
- Provide direction
- Reduce impact of change
- Minimize waste and redundancy
Strategic management →
1. Identify organization’s vision, mission, values, goals and strategies
- Vision: long-term view
- Mission: statement of purpose
- Values: beliefs shared among stakeholders
2. Apply external analysis
- PESTEL (political, economic, social, technological, environmental, legal)
3. Apply internal analysis
- SWOT (strengths, weaknesses, opportunities, threats)
- Porter’s five forces
- Threat of substitute products
- Bargaining power of buyers
- Threat of new entrants
- Bargaining power of suppliers
- Competitive rivalry
4. Formulate strategies and evaluate results (make changes if necessary)
Strategies → plan of action designed to achieve a specific goal over a defined period of time
(Mission, strategic issues, markets, customer needs, resources, competitive advantage = strategy)
- Corporate: based on role each business unit will have, focused on growth
- Market penetration: expanding markets served or products offered within industry
- Diversification: expanding business into different markets (same or different products)
- Product Development: creating new products for existing markets
- Vertical integration: expanding into different stages of the same industry's value chain
- Backward: moving closer to the source of raw materials (control inputs)
- Forward: moving closer to end customers (control outputs)
- Horizontal integration: combining with competitors (same level and industry)
- Competitive: based on how business will compete in the market
- Cost leadership: having lowest costs in the industry
- Differentiation: unique and valued high-quality products (related to brand image)
- Focus: cost leadership or differentiation in a very specific market
- Functional: plan of action of a specific department within organization
- Stability: business keeps doing what they’re doing
Business organization → a systematic arrangement of people brought together to accomplish some
specific purpose (think about structure, goals and people)
Management → process of doing things effectively (ends) and efficiently (means)
- Top management: president, CEO, executive vice president
- Middle management: plant, division, department
- Front-line management: foreman, supervisor, office
- Non-managerial employees: everyone else
(Effective: doing the right things to achieve the best results)
(Efficient: making the best use of your resources)
Leaders → make sure people follow them (inspire values of the company)
Managers → make sure everyone does what they are supposed to (keep order)
- H. Fayol: functions (planning, organizing, leading, controlling)
- H. Mintzberg: roles (interpersonal, informational, decisional)
- R. Katz: skills (conceptual, interpersonal, technical, political)
Sector → group of markets with common attributes, part of an industry
- Primary (allied services): raw materials
- Secondary (manufacturing): processing of materials
- Tertiary (service): distribution of materials
Industry → general business or enterprise, named after main product
Market → group of targeted customers who require the products/services provided by an industry
Stakeholders → individuals or groups that have a(n) (in)direct impact on the organization
(customers, employees, investors, partners, suppliers, competitors, government, environment)
Capital → tools, buildings, land, human capital
Other terms →
- Profit: make profit but invest in own company back
- Non-profit: prioritize profits
- Public: owned by the government (thanks to taxes)
- Private: owned by private organizations
- Local: same city, town or geographical area
- National: within the borders of a country
- Global: many countries around the world
- International: sells worldwide but facilitates in home country
, STRATEGY
Planning → organizing and setting a structure and strategy to achieve your goals
- Keep control
- Provide direction
- Reduce impact of change
- Minimize waste and redundancy
Strategic management →
1. Identify organization’s vision, mission, values, goals and strategies
- Vision: long-term view
- Mission: statement of purpose
- Values: beliefs shared among stakeholders
2. Apply external analysis
- PESTEL (political, economic, social, technological, environmental, legal)
3. Apply internal analysis
- SWOT (strengths, weaknesses, opportunities, threats)
- Porter’s five forces
- Threat of substitute products
- Bargaining power of buyers
- Threat of new entrants
- Bargaining power of suppliers
- Competitive rivalry
4. Formulate strategies and evaluate results (make changes if necessary)
Strategies → plan of action designed to achieve a specific goal over a defined period of time
(Mission, strategic issues, markets, customer needs, resources, competitive advantage = strategy)
- Corporate: based on role each business unit will have, focused on growth
- Market penetration: expanding markets served or products offered within industry
- Diversification: expanding business into different markets (same or different products)
- Product Development: creating new products for existing markets
- Vertical integration: expanding into different stages of the same industry's value chain
- Backward: moving closer to the source of raw materials (control inputs)
- Forward: moving closer to end customers (control outputs)
- Horizontal integration: combining with competitors (same level and industry)
- Competitive: based on how business will compete in the market
- Cost leadership: having lowest costs in the industry
- Differentiation: unique and valued high-quality products (related to brand image)
- Focus: cost leadership or differentiation in a very specific market
- Functional: plan of action of a specific department within organization
- Stability: business keeps doing what they’re doing
