Business Management 1 - Chapter 1 Flashcards
Briefly explain the importance of studying business management
The moment any person is employed, buys a product or make use of a service they are involved in economic life, a better knowledge and understanding of what a business is and how it functions increases understanding and appreciation. The subject of business management encompasses all activities that are related to the management of all types of organisations. A thorough understanding of business and its workings is essential to every business manager.
List the four functional areas of business management
- Production and operations management
- Marketing Management
- Financial management
- Human resources management
Briefly explain “Wants”
A “want” is a vague feeling that something is absent or unavailable and that something cannot always be clearly defined.
Briefly explain “Needs”
A “need” is the psychological feature that awakens an organism to action towards achieving a desired goal, forming the reason for the particular action and giving purpose and direction to behavior.
Briefly explain the economic principle
The economic principle form the fundamental basis of economic activity and productivity issue and focuses on the concept of getting the highest possible outputs with minimum possible inputs.
List the four production factors
- Land
- Capital
- Labour
- Entrepreneurship
What does “Land” as a production factor entail
Land is considered to include all natural resources used as raw materials.
What does “Capital” as a production factor entail
Capital represents the financial means for acquiring other forms of production factors.
What does “Labour” as a production factor entail
Labour refers to all physical and mental abilities of human resources.
What does “Entrepreneurship” as a production factor entail
Entrepreneurship refers to the initiative of putting together a range of production factors in various combinations to satisfy the needs of consumers.
Who suggested that the value chain concept could be used as a tool for identifying ways of creating customer value
Michael E. Porter
What is the idea behind the value chain analysis
the idea behind value chain analysis is to identify the value that is added with each activity in the process of providing products and or services and to compare a business’s performance to that of competitors.
List the two broad categories of activities in a typical value chain
- Primary Activities (line functions)
- Support Activities (Staff or overhead functions)
Briefly explain “primary activities” in a value chain
Primary activities are the activities involved in the physical creation of the product, marketing, transfer to the buyer(sales) and after sales support.
Briefly explain “support activities” in a value chain
Support activities assist the business as a whole by providing infrastructure or inputs that allow the primary activities to take place on an on-going basis.
List the primary activities in a value chain
- Procurement and inbound logistics
- Production/Operations
- Outbound Logistics
- Marketing and sales
- Customer service
List the support activities in a value chain
- Financial Management
- Human Resource Management
- Communication
- Information management and e-business
What does “Procurement and inbound logistics” entail as a primary activity in a value chain
sourcing and receiving of goods from suppliers, storing them until required by production/operations and handling and transporting them within the organisation.
What does “Production/Operations” entail as a primary activity in a value chain
This is the production area of the business. In some businesses this might be split into separate departments.
What does “Outbound logistics” entail as a primary activity in a value chain
These distribute the final product to the customers and includes transport and warehousing, it may also include picking and wrapping of multiple products, bringing customers to branches or internet access to the organisations services.
What does “Marketing and sales” entail as a primary activity in a value chain
This function analyses customer wants and needs and brings to the attention of customers the products or services on offer by the business.
What does “Customer service” entail as a primary activity in a value chain
Before or after a product or service has been sold, there is often a need to arrange financing, installation, after-sales service,customer training and handling of queries.
What does “Financial management” entail as a support activity in a value chain
All activities, costs and assets related to the acquisition, utilisation and control of the money the organisation requires to finance its activities.
What does “Human resource management” entail as a support activity in a value chain
All activities, costs and assets associated with the recruitment , training, development and compensation of all types of personnel and labour relations activities.
