College of Science and
Human Studies at Ghat
Female Branch
Chapter 1
Business and Management
Instructor: FATMA LETAIEF
1st Semester 1436/1437
After studying this chapter you should be
able to.
1- Explain what is meant by "Business".
2- Explain the objectives of business.
3- Explain the essential of good business.
4- Describe the business environment.
5- Explain the concept of management.
6- Describe the characteristics of management.
7- List the functions and levels of management.
8- Outline the skills of management
9- Explain levels of management
10-Explain the functions of management
1- What is the Business?
The term 'business' signifies individual and group
activities directed toward wealth generation through
exchange of goods and services. Business, as a system,
uses various inputs like men, material, machinery,
information and energy to create goods and services as
output to meet the needs of the consumers. Business
involves risks and the profit gained is the reward for risktaking. The common risks are changing technology,
changes in consumer preferences, competitive threats, and
government policies. Business influences the living
standard of people and is the leading indicator of the
development of any nation.
2- objectives of Business
The objectives of business are two-field: economic and social.
2-1-Economic objectives include:
(a) Ensuring a satisfactory return on investment (ROI).
(b) Growth of business through diversification, merger, or
acquisition.
(d) Ensuring profitability by gaining strong market position.
2-2-Social objectives include
(a) Prevention of environmental pollution and ecological
ambiance.
(b) Overall development of the locality where the business is
situated.
(c) Development of backward areas.
(d) Promotion of ancillary and small scale industries.
3- Essential of good Business
The essentials of good business are:
1. A business must have well defined and attainable
objectives.
2. It should follow an appropriate planning procedure
based on up-to-date, reliable, and adequate information.
3. It should have a right layout and location so as ensure
minimization of costs and maximization of profits.
4. A business should have a responsive and adaptive
management.
5. It should have a sound organization ensuring
effectiveness.
6. A Business should have a customer-focused marketing
system.
4- Business environment
Just as human beings live influence and get influenced
by an environment, similarly businesses also affect
and get affected by the environment in which it
operate. The environments may be classified in four
groups: Economic, Social, Political and Legal. These
are discussed below.
4-1-Economic Environment:
It is sometimes thought that the economic environment
is of concern only to businesses whose socially
approved mission is the production and distribution of
goods and services that preference want and can pay
for. But it is also of the greatest importance to other
types of organized enterprises.. The factors affecting
an economic environment are.
•Capital,
•Labor,
•Customer,
•Government taxes,
•Price levels.
4-2- Social Environment
The social environment is made up of the attitudes,
desires, expectations, degrees of intelligence and
education, beliefs, and customs of people in a given
group or society. The concept of social responsibilities
requires organizations to consider the impact of their
actions on society ethical environment, which could
well be included as an element in the social environ;
includes sets of generally accepted and practiced
standards of personal conduct. These STANDERS
may or may not be codified by law, but for any group
to which they are meant to apply sometimes have
virtually the force of law.
4-3- Political Environment:
The political environment has an effect on the business
in the world economics. We can see the difference
between the business in the European versus Arab
countries. These differences are causes some factors.
One of these factors have the effects is the political
environment. It has considered as the building blocks
of business success.
4-4- Legal Environment:
Every manager is encircled by a web of laws,
regulations, and court decisions not only or national
level but also on the state and local levels. Some are
designed to protect workers consumers, and
communities. Others are designed to make contracts
enforceable and to property rights. Many are designed
to regulate the behavior of managers and their
suborder in business and other enterprises.
5- Concept of management
Managing is the art of getting things done through
people in formally organized. Management can thus be
defined as the art or skill of directing human activities
and resources in the predetermined goals.
Management is practiced with the help of five basic
functions: planning, organizing, staffing, directing and
controlling.
6-Characteristics of management
We have just read about the meaning of management. Now let
us discuss its characteristics:
(i) Management is a goal directed activity.
(ii) This is called co-ordination
(iii) This is known as decision making.
(iv) Management is an economic-activity.
(v) Management is a creative activity.
7-Nature of management: is it the art or science ?
We have discussed the various interpretations of the
term ‘Management’. When a manager performs his
functions or takes decisions, the systematized body of
knowledge helps him to apply one or more principles
or methods in the course of his activities. In this sense
management is a science. However, we have to apply
our skill and judgment rather than simply use the
methods and principles known to him. In this sense,
management may be regarded as an art. Therefore,
management may be regarded as both a science as
well as an art.
8- Management Skills
Three basic kinds of skills—technical, human and
conceptual are needed for a manager. Technical skill
is the ability to use the procedures, techniques, and
knowledge of a specialized field. For examples,
surgeons, engineers, and accountants all have
technical skills in their respective fields. Human skill
is the ability to work with, understand, and motivate
other people as individuals or in groups. Conceptual
skill is the ability to coordinate and integrate the
organization's goals and activities.
9-levels of management
We have already stated how managers jointly perform the
various functions. Different managers perform different
types of duties. Some managers decide about the
objectives of the business as a whole. Some managers
perform functions to achieve these objectives in different
departments, like production, sales, etc, and some of the
managers are concerned with the supervision of day-doday activities of workers. Managers performing different
types of duties may, thus, be divided into three categories:
Top-Level Management
Middle-Level Management
Lower-Level Management
10-functions of management
We have already discussed that management is a
process. It comprises different stages. These stages in
the process are known as the functions of
management. Each of these functions are described
below:
(a) Planning
(b) Organizing
(c) Staffing
(d) Directing
(e) Controlling
(f) Co-ordination
(a) Planning
Planning requires decisions to be made on what should be done, how it
should be done, who will do it, where it will be done, and why it is to be
done. The essential part of the planning consists of setting goals and
programmers of activities.
(b) Organizing
After plans have been drawn, the management has to organize the
activities. Managers determine what activities are necessary to achieve
the objectives and how these activities should be divided among the
departments and employees.
(c) Staffing
Staffing is concerned with employing people for the various activities to
be performed. The objectives of staffing is to ensure that right type of
people have been recruited for different positions. It includes the
function of recruitment, selection, and placement of employees.
(d) Directing
The directing function of management includes guiding the subordinates,
supervising their performance, communicating information and
motivating. A manager should be a good leader.
(e) Controlling
Controlling means measuring the actual performance with the planned
one. If differences are noticed, corrective steps are taken which may
include revision of plans, improvement in the division of work and
providing better guidance.
(f) Co-ordination
The heads of different departments should not treat each other as
competitors but should work as organs of one body.. This function of
management is called co-ordination. It consists of harmonizing group
effort so as to achieve common objectives.
End of Chapter 1