Summary Introduction to Business Management Chapter 1 Complete
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Course
Introduction to business management (BMNG5121)
Institution
Rosebank College
Book
INTRODUCTION TO BUSINESS MANAGEMENT 11E
This document provides an in depth and thorough summary of chapter 1 of Introduction to Business Management 11th edition (Erasmus et. al.). It is ready for exam and tests. Everything is laid out as it is in the textbook. All needed information is provided in short. It is written in an easy to study...
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Chapter 1
Role of business in society
Human activities Resources
Managed by people and operated by people
Transformation
Production
Transforming resources into products and services
Products
Exchange
Produce products and services in exchange for money
Profit
Reward for meeting people’s needs, enables businesses to pay resources and make a living
Businesses help indirectly with technological innovation, research and development. It satisfies
needs and improve the standard of living for society. Entrepreneurs create jobs, economic growth
and hopefully, prosperity
Entrepreneurs constantly search for new ideas, products, and technology. They initiate innovation
and change because of their decisions of investment, production, and employment, influencing
Sustainability themes
Social responsibility
Measured by its contribution towards employment opportunity and economy
Provision of the safe workplace, housing, concern about health issues, environmental awareness, and
empowerment of previously disadvantaged people
Have to behave as responsible citizens, make sure environment is safe
Employment equity
Aims to create equal employment opportunities for all and address inequalities of the past
Ensures that workforces are composed in roughly the same proportions as the groups that make up the population
Eliminate discrimination and ensures a diverse workplace
Business ethics
Focuses on ethical behaviour of managers and executives in the business world
Managers especially, they often abuse their power
Organizations have codes to set clear guidelines
Consumerism
Social force that protects consumers against unsafe products and malpractice by applying moral and economic
pressure on businesses
South African National Consumer Union are the watchdogs
SANCU forces producers to take full responsibility for ensuring their products and services comply with standards
, Environmental sustainability
Activists are forcing businesses to take the environment into consideration
They are often responsible for air, water, and soil pollution
Citizens often form pressure groups to protect the environment
Needs and need satisfaction
Multiplicity of human needs
Work that community members do is related directly to needs satisfaction
Highly industrialized communities, have many needs and requires large organizations to satisfy their needs
Abraham Maslow put needs in a hierarchy, from most to least essential
Physiological needs have to be met for survival
Psychological needs things that make life more pleasant, but is not essential
Society has limited resources to satisfy needs, also called factors of production
Physological
Lim ited
Safety U nlim ited resou rces:
needs: * N atural
Social 1. Physio lo gical Satisfactio resou rces
2. Safety n of
* H um a n
Esteem 3. So cial society's
n ee ds resou rces
4. Esteem
Self realisation 5. Self - * C apital
realisatio n *
En trep reneu rship
Limited resources
Natural resources (production factor of land)
Agricultural land, industrial sites, residential stands, minerals and metals, forests, water (resources that comes from
nature)
The amount cannot be increased hence scarcity
Human resources (production factor of labour)
The abilities and skills of employees to produce products and services
Size of labour force and availability of production factor depends on
Size of population
Level of education and training
Valuable labour force has to be trained for a period to produce required
Human skills are important, without, natural and financial resources can’t be utilized productively
Capital
Buildings, equipment, cash registers, computers, and other objects manufactured for the purpose of producing final
consumer products
Reason for scarcity of capital, it takes years to build up stock of capital
Owners or suppliers of capital are usually paid in the form of interest or rent
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