Business Administration Flashcards
What is an Organisation
An instance of human cooperation with a specific purpose and the intention to be permanent
What is a Business
An Organisation, which produces goods and/or services or engages in trade with the intention of putting these on the market for sale
What is a non-profit organisation
An attempt to deliver goods and/or services for general use at the lowest possible cost
What is a For-profit business
offering goods and/or services with a cost higher that is costs to make and deliver the goods/services, making them a PROFIT
A business is ?
An organisation with 4 characteristics;
1 there are people in the organisation
2 there is cooperation in the organisation
3 there is a purpose to the organisation
4 there is continuity in the organisation
what is an Internal main objective
the continued existence of the firm
what is an External main objective
providing a (societal) need
transformation process
input > throughput > output
Net profit margin
net profit x 100%
_____________
Revenue
what is Net Profit
when a business has paid all payments it retains an curtain amount called the Net Profit
Revenue
Unit x Price
it has to do with all the units sold
on to of the profit and loss statement
Black box approach
there is no indication how input is transformed into the proper out put. all you can see is what goes in and what comes out.
Names 6 Characteristics of a Business Administration
It's all about Business business context is important it is multidisciplinary it is interdisciplinary it is a science it is a body of knowledge
Business Administration is about?
the concern if a organisation is organised the right way, set up and administered in the proper way. center of attention is the business and how to run it
multidisciplinary
combining many different disciplines in a business
Name 6 Specialisms of a Business
Financial Management Psychology Technology Purchasing knowledge Marketing and sales Operational research Communications Process management Law Sociology Facility management Information science
Business Administration is Interdisciplinary
It brings specialisms together, it first engages concepts and problems with its own practitioners, and only the does it consult specialists in order to see what sort of solutions they can offer
What is Interdisciplinary
The linking of different disciplines with each other
Why is Business administration a Science
it applies its own ideas and definitions. The normal science rules of the game are applied
why is Business administration a body of knowledge
it is all about real problems and practical questions that need to be resolved.
Definition Business Administration
the branch of science that concerns itself with the organisation and context of the business. B.A. comprises a comprehensive (all-inclusive), multi- and interdisciplinary approach in which attention is paid to a scientific manner to practically oriented questions within a business
Name 6 Management competencies
Analytical insight Advisory ability Cooperative skills Communication skills Ability to lead Stress resistance
Names 6 Business Administration professions
Consultant Independent Entrepreneur (general) Manager Policy worker Account manager Lobbyist Controller Recruiter Investment analyst
Name the three aspects of a process
1 Effectiveness; the intended effect and is this achieved?
2 Efficiency; how many resources are needed?
3 Management; How is the process managed?
Primary activity
the processes at the core business
Secondary activities
the processes that support the core business
Supervisory activities
controlling the processes, also called the management processes.
Primary functions
are the primary activities divided in to sub-activities.
which actions are necessary to carry out a Business core activity.
- Purchasing
- Producing
- Logistics
- Marketing
- Sales
- Services
ALSO THE PRIMARY FUNCTIONS OF A BUSINESS
the value chain
shows which business can add further value to a product or service.
the value chain phases
- Incoming logistics
- Operations
- internal outbound logistics
- Marketing and sales
- Service and customer-related value
Purchasing steps
- Orientation
- Writing specifications
- Selection of suppliers
- Trending
- Negotiations
- Contracting
- Order confirmation
- Receipt of goods or services
- Accounting of goods
- Payment of supplier’s invoice
- Financial accounting
Material management
Controlling the flow of goods with internal logistics; Making prognoses Drawing up production plans Handling customer orders Choosing suppliers Internal logistics Planning assembly
production process
Chain of supply points and processing stations
Flows of goods
Fabrication process
Assembly process
What does C.O.D.P. stand for
Customer Order Disconnection Point
Designates that point in the production process from which the process is directed by individual orders.
Before C.O.D.P.
Process can be systematically planned and standardized
After C.O.D.P.
Process is determined by the specific wishes of the customer and so are less able to be standardized.
Piece Production
Production piece-by-piece
Unique specifications
High costs
Project directed work
labour-intensive, each project has its own planning
Mass production
how to make as efficient and cheap as possible
Process production
Enormous volume, focused on one think, big investment, labour and operation costs are low.
Continuous/ flow production
a production process that hardly ever stands still
What are the 5 M’s
Men(People) Methods Machines Materials Money
Production planning
Used to gain a strategic advantage by coordinating their strategic planning, right place & right time, how much and when.
Automated planning system MRP
Material Requirements Planning
Automated planning system ERP
Enterprise Resource Planning
Outsource suppliers pro’s and con’s
Pro- businesses that specialize in certain components can often product them cheaper
Con’s-
You can become dependent on another firm
Important information about its production process might leak out
Core competence
one can define a core competence as that part of the primary activities where an organisation can distinguish itself from the competition through its knowledge and skills, A business’s core business
Business logistics can be broken down into
Incoming logistics
Internal- or product logistics
Outbound logistics
The Logistics chain
Supply (incoming logistics) Production Storage Distribution (outgoing logistics) Transport Information management
Incoming Logistics
The primary activities start at this point, the handling of goods and materials that arrive at the firm.
Technical Obsolescence rate
the product or component in the supply loses its characteristics, Example; paper, if you store it to long it will turn yellow
Economic Obsolescence
new products or components embodying the latest technology come onto the market, so that the older supplies are worthless
Spoilage rate
food can only be stored for a limited time
Storage costs
the facilities you need to store materials or components
The cost of holding supplies is determent by certain factors
Technical Obsolescence Economic Obsolescence Spoilage rate Storage costs Theft risks Risk of damaging supplies while in storage.
Linear programming
Mathematical method of solving optimization problems
Internal logistics
Deals with the of raw materials and semi-finished products within the process
basic production or logistical forms
Divergent production
Parallel production
Serial production
Convergent production
Divergent production
Several different products are made from one single raw material
Parallel production
Two production streams, which have nothing to do with each other, occur at the same time
Serial production
Only one production stream
Convergent production
Make complex products put together from many other products
Outbound logistics 5 steps
concerned with bringing the end product to the end user.
- Supply management
- Preparation of orders
- Customer-specific order fulfillment
- Preparation dispatch
- Dispatch of the order
Simulation
useful when directing very complex processes, it is an important instrument in BA for making complex processes controllable and analyzing their effectiveness
Goals of simualtion
- Optimizing the flow of materials
- Eradicating bottlenecks
- Accelerating processing times
- Analyzing supplies and buffers
What is just in time production
the idea is that supplies and production should be so coordinated that there are hardly ever inventories present in the business
Speculative inventories
to avoid paying a higher price when the raw material price rises
Buffer inventories
When delivery of raw materials is late, you can still produce.
Supply chain management
tries to deliver an optimal coordination of production with supplies for not just one business bu several businesses in a network.
What is marketing
it has to do with the activities for creating, communicating, delivering and exchanging products and services, which are of value to customers
Marketing according to Kotler
A human activity oriented towards satisfying needs and desires by means of an exchange process
Characteristics of marketing according to Kotler
- Putting the customer first
2. Date capture and analysis
Name the Kotler 5 P’s
- Product
- Promotion
- Price
- Personnel
- Place
The marketing plan 6 phases
- Analysis of opportunities and threats: overview internal and external context
- Research and goal selection
- Marketing strategy definition
- Marketing programme planning
- Marketing programme organisation and implementation
- Measurement and evaluation of results and possible goal re-definition
Why Market research
Important for detecting opportunities in new or existing markets. Done by gathering information about customers, competitors and market trends.
Primary research
gather information directly from source.
example; interviews and surveys
more time consuming
Secondary research
Looking at information sources like, magazines, government publications
less time consuming
When does the Sales process take place
when businesses deliver their products, goods or services to another party for payment
Steps of the Sales process
- Competition analysis
- Customer analysis
- Promotion analysis
- Extension to offer
- negotiation
6 Contract phase - Order receipt
- Dispatch of purchase confirmation with sale condition
- Delivery/Distribution
- Invoicing
- Receipt of payment
C.R.M.
Customer Relation Management
Supporting functions
actions that do not directly have anything to do with the primary functions.
Supporting activities
the systematic integration of supporting functions> Necessary to support the primary activities
Support/secondary activities
oriented towards delivering people and resource to primary activities
Resource management
managing supporting activities, what does the business have to do in order to optimize the commitment of resources
All supporting functions (PARCFILF)
- Personnel = HRM
- Administration = Management information
- Research and development
- Communication; intern/extern
- Finance
- ICT
- Legal
- Facilities = Facility management
Communication policy
- Target group analysis
- Communication goals formulation
- Communication strategy
- Communication types
- Communication style
- Evaluation
Research and Development
a supporting staff department that occupies itself with the development and design of new products and process innovations
Cross-pollination
when a business A develops something business B can use it and visa-versa
quantity of R&D can be measured by:
The number of patent applications
R&D budget
The number of scientific publications
In western countries 3.5% of a business’s revenue is R&D
Fundemental research
Scientific research aimed to improve scientific theories for improved understanding or prediction of natural or other phenomena
Applied research
Uses scientific theories to develop technology or techniques to intervene and alter natural or other phenomena
3Different phases of the development process
- Preliminary research
- Analysis
- Design draft
- Detailed design
- Realisation
- After-sales
Preliminary research:
a. Project team is put together
b. Exploratory research needs to be done
c. Responsibility structure has to be determined - who is
responsible for what
d. Objectives have to be fixed
e. Plan has to be made
. Design draft:
a. Concept is developed
b. Start looking for financiers and investors
Detailed design:
a. Market preparation
b. Optimisation
c. Production process
d. Product is evaluated - tests are carried out
e. Sketches are made
f. Production plan is made
Realisation:
a. Market introduction of the product
b. Production starts
c. Think about packaging, distribution plan, sale price etc.
After-sales:
a. Customer satisfaction
b. Product evaluation
c. Business case evaluation
d. Improvement plan
time to market
the speed bringing the findings onto the market, has to be quickly and effectively
Revisionism
a trend of the mid-20th that was a predecessor to the HRM, they came up with the idea that people are the most important asset of a business
HRM instruments
Intake Internal mobility Outplacement Compensation package Function structuring Personnel planning Personnel administration Communication and information
Accounting
Providing an insight into the process of payment and getting paid for people within and outside the organisation, it is important for business to carry out administration
Sorts of Accounting
Financial Accounting
Stock Accounting
Management information - control function
Capital
Goods for the continuance, expansion or improvement of production, which demand long-term investment
Mortgage
Long-term financing for durable capital goods, such as real estate
Current account
Short-term financing for non-durable capital goods, such as supplies or accounts payable
Medium-term loans
Financing for the medium-term(<5years) for production resources, such as machines
Financial lease
Renting to buy
Operational lease
Renting
Three questions a business’s ICT has to be able to answer
- What sort of information needs does the business have(primary)
- What information does management want to have
- How can this information be conveyed
Legal affairs
- Management and Ownership
- Financing possibilities
- Continuity
- Liability
- Fiscal consequences
- Disclosure requirements
- Danger of takeover.
Two Facility Management levels in a business
- Strategic Tactical; Owners must be informed of the possible consequences of their decisions to offer space and services
- Operational; Creating an optimal, safe and cost-effective environment for the business or organisation.
Tasks of a Facility Manager
Operational Safety Hygiene Security Maintenance Inspections
What is the organisational context
everything lying outside the organisation that influences it
Name the three paths a business can choose
- The product or the service that the business delivers
- The market in which the business is active
- The technologies or processes the business uses
traditional context
Organisational context defined as the actors with whom the organisation has relations
Macro context
Organisation context in terms of political, social and technological factors that have influence on the organisation
The STEP analyisis Method
Social
Technological
Economical
Political
Social Analysis
Demographic, Income distribution, Social mobility,Change in living habits, Work Attitude
Technological Analysis
Government expenditure or research, Attitude to technology of government and industry
Economical Analysis
Economic conditions, Life-phase of the industry, GDP trend, Interest rates,
Political Analysis
Anti-Monopoly/Cartel, Measures and laws to protect the environment, Tax climate and Legislation, Regulation of foreign trade, Labour Law, political stability of the government and democracy
Scenario Method
A business sets up a number of possible future scenarios, these future scenarios feature above all the threats from the indirect action elements in the environment. Then the business sets up scripts that contain reactions and countermeasures for the moment when the scenario becomes realtiy
Monopoly
Is when one company who sells a certain product, this Organisation/business can decide the price of the product, for example; Passports
Oligopoly
A few sellers, like the production of Smartphones
Polyopoly
Many sellers like the clothing business
Five forces that determine the competition within an industry
- Threat of new entrance
- Negotiation power of suppliers
- Negotiation power of buyers
- threat of substitutes
- Rivalry between competitors
Threats of new entrance
the extent is deterined by the height of the obstacles to becoming active in the market > Barrier to entry
Negotiation power of suppliers increases if:
A) The supplier has more than enough customers
B) The costs of changing one’s supplier are high
C) The supplier offers a successful brand
D) The supplier is thinking about getting int the activity that his customer carries out(forward integration)
E) There is an oligopoly/ monopoly on the supplier side
Negotiation power of the buyer increases if:
A) There are few customers or one large customer
B) There are alternative buying points and channels to which the firm can easily switch
C) The buyer us considering backward integration (carrying out the job of the supplier)
D) The buyer is highly interested in a discount
E) The buyer can produce the product itself
F) The buyer is well informed about the market and the competitors prices
Threats of substitution
perceive the threat of substitution early on, develop substitutes oneself
Rivalry between competitors
Rivalry between competitors depends on many factors like;
- Balance > Difference in size of the competing businesses
- High fixed costs > To make up the fixed costs, competitors might lower their prices. To compete you then also have to lower your prices
- Overcapacity > There are to many competitor for the market, who has to leave the “battlefield”
- Barrier to exit > The costs of exiting the market; the money that is invested getting into the market and all the investments you made whilst in the market.
Strategic groups
Dividing businesses into groups with equal strategic significance and corresponding organisational forms, the business gains better view of the competitors which it has to monitor and to compete with
The attraction of the total market
determined by; size, growth, profit margin, intensity of competition, e.c.t. Classified as high, medium and low
Individual competitive position
determined by; market share, growth of share, reputation, network, quality, e.c.t. Classified as strong, medium and weak.
Technological changes
Production processes become more flexible, production jobs are disappearing, large-scale factories starting to decline, Production automation
Socio-cultural changes
changes through, better education, consumer preferences, attitude to work
Strategic management
compasses determining the relationship between the context and the business, businesses must determine what and how.
Mission/ mission statement
what you want to achieve in relation to the context
strategic goal
general goals need to be translated into more specific goals. they are mostly more detailed and more concrete than the mission
strategic decision time horizon
five to ten years > long-term
tactical decision time horizon
two to five years > medium-term
operational decision time horizon
two months to two years > short term
Defensive strategy
if you choose to satisfy the demands posed by the context as fully as possible > reorganization
Offensive strategy
if you try to have the context fit the business better by influencing that context. Possibilities how to increase your control; Importation, Exportation, R&D and innovation development, Diversification, Cooperation
Strategic divide
the course that the business wants to follow is actually different from the one it is following at the moment, difference between the current and the desired situation
UPE (Unchanged Policy Estimate)
you find out what the situation in the future will be if the current policy is continued unchanged
The internal analysis consists of;
- Analysis of the products or services that the business delivers.
- analysis of the total product range of the business
- analysis of the products, brands and technologies that a business uses
- comparison with standards and benchmarks, which mostly come from outside the firm
- Analysis of the value chain of which the business is a part
Product life cycle
introduction growth maturity saturation decline sale
Product portfolio
the total package of a business
BCG Matrix
Boston Consulting Group;
- analysis the current portfolio activities
- Develop a growth strategy and growth direction
- Decide which activities must be phased out.
Question mark
fast-growing market, low market share - a question mark over whether the market share can grow, and the product thus generate more renenue
Star
fast-growing, high market share
Dog
slow- growing market, low market share
Cash cow
Slow- growing market, high market share
best practice method
a business goes in search of the best conceivable method for carrying out its business activities
Bench-marking
the business compares its own products, services and methods of working with those of the strongest competitor
Key numbers
the business compares itself on the basis of key financial figures
Flexibility comparison
reveals to what degree you can operate as flexible as the competitors
Competitive advantage can be attained in two ways
- Multiplying value in such an efficient way that you succeed in doing so at very low costs
- adding something extra to a product that makes buyers regard it as more valuable than competitive products
Porters approach on generic strategies
Cost-leadership
Differentiation
Focus Strategy
Cost-leadership
one produces for the lowest costs in comparison to the other businesses in the industry
Differentiation
the businesses seeks a unique position in the industry by making itself different from the competition
Focus
a business orients itself to a particular market segment, also called a niche
Cost-focus
the business orients itself on a small segment and tries to win that segment over by producing at low cost
differentiation
the business tries to win over a small segment through differentiation- unique, haute couture clothing
Johnson and Scholes’s approach to the strategic clock
maintain that a business can choose the point of departure for its strategy with help from a strategic clock
two dimensions are important;
1. The price
2. The perception by the customer of the added value
Cooper’s confrontation strategy
Three product-related characteristics, together called by cooper the survival triangle, play a critical role for businesses which have chosen this strategy;
- the cost of the product
- the quality of the product
- the functionality of the product
Survival zone
the area between the minimum allowed and the maximum attainable for all three characteristics of the product.
Outside of the survival zone the products will not sell.
Chan Kim and Mauborgne’s Blue ocean strategy
The blue Ocean Strategy supposes that the boundaries of a market aren’t fixed, but determined by the actions of the industry players.
The Blue Ocean Strategy suggests that we create a new demand in a new market “a blue ocean”
Red Ocean Strategy
the boundaries of a market are know and fixed. in order to create more market share you need to take away market share from a competitor.
Zero-sum game
if the number of customers for one firm grows, the number of another firm must shrink.
Ansof four alternative directions for strategy development
- Market penetration
- Product development
- Market development
- Diversification
Market penertration
a business tries to grow in the same market with an established product, by lowering price or more advertising
Product development
A business will try to increase its revenue by offering a new product in the existing market
Market development
A business will try to enter a new market with an existing product
Diversification
A business will try to enter a new market with a new product.
