INDIAN INSTITUTE OF MANAGEMENT ROHTAK INTEGRATED PROGRAMME IN MANAGEMENT PRINCIPLES AND PRACTICES OF MANAGEMENT ASSOC. PROF. DR. A. GOZDE IYICIL COURSE OBJECTIVES: ■ To be able to describe; – what a business is, – How a business works, – What the role of a business administration Professional is in a business. ■ The pedagogy will be a mix of Lecture, Discussion, Group exercises in class, Case Analysis, Assignments, Quizzes and Project Presentation. Participants are expected to read the prescribed readings/book chapter before attending the session, summarize and critique the readings and try to identify the linkage between the prescribed readings for the session and those covered earlier. ■ Daily we have contact with many businesses. We wake up in a bed from IKEA, to the ringing of an alarm clock from Philips. We get washed in a bathroom from Villeroy&Boch, using water from a local water utility. We check our mail on Iphone via Airtel, while eating cornflakes from Kellogg’s. ■ Perched upon a bicycle or scooter or seated within a car from one business or another, we then hit the road, to be confronted for the rest of the day with hundreds of other businesses that deliver all sorts of goods and services to us. ■ So in this chapter, we set out what a business is. Then we deal with the body of knowledge known as business administration/management. ■ ***SPECIFY A WELL-KNOWN BUSINESS NAME IN YOUR AREA ■ Coca-Cola ■ National Stock Exchange of India ■ Nike ■ Turkish Airlines ■ Apple ■ Fabindia ■ Reliance ■ The shop next door We encounter organisations and businesses in all shapes and sizes. BUSINESS: Businesses are social and economic units that produce goods, services or ideas by using production factors to achieve determined goals. ■ Businesses are social units. ■ Businesses should interact with their environment. ■ Otherwise entropy will be inevitable. ■ Businesses are economic units. ■ Because all businesses including for-profit and non-for-profit buinesses have to consider costs, expenses and income. ■ …. that produce goods, services or ideas ■ What is the difference between goods and services? Basis of Comparison Goods Services Nature Tangible Intangible Transfer of Ownership Possible Not Possible Separable Goods can be separated from the seller Services cannot be separated from the service provider Storage Goods can be stored Services cannot be stored Perishable Not all goods are perishable Services are perishable Production and Consumption Goods have a significant time gap between production and consumption Services are produced and consumed together IDEAS: ■ LAW COMPANY ■ ADVERTISING AGENCIES FACTORS OF PRODUCTION ■ LAND (NATURAL RESOURCES), ■ LABOUR, ■ CAPITAL, ■ ENTREPRENEURSHIP ■ What is the main purpose of a business? ■ To exist ■ Grow ■ Make a profit ■ Social responsibility CSR ■ Corporate Social Responsibility has been claimed as an OXYMORON! ■ By an oxymoron, we mean the bringing together of two apparently contradictory concepts, such as in «a cheerful pessimist» or «a deafening silince». ■ Can you give an example from your Daily life for oxymoron? ■ OXYMORON: ■ accurate estimate. ■ awfully good. ■ amazingly awful ■ bittersweet. ■ only option ■ original copy ■ same difference ■ small crowd ■ So CSR is an oxymoron. ■ We define an organization as a group of people working together in a structured and coordinated fashion to achieve a set of goals. ■ The goals may include profit (Starbucks Corporation), the discovery of knowledge (University of Missouri), national defense (the Indian Army), coordination of various local charities (United Way of America), or social satisfaction (a sorority). Because organizations play such major roles in our lives, understanding how they operate and how they are managed is important. ■ Although defining the term organization is relatively simple, the concept of management is a bit more elusive. ■ It is perhaps best understood from a resource-based perspective. ■ All – – – – organizations use four basic kinds of resources from their environment: human, financial, physical, and information ■ Human resources include managerial talent and labor. ■ Financial resources are the capital used by the organization to finance both ongoing and long-term operations. ■ Physical resources include raw materials, office and production facilities, and equipment. ■ Information resources are usable data needed to make effective decisions. ■ Managers are responsible for combining and coordinating these various resources to achieve the organization’s goals. ■ Managers do so by carrying out four basic managerial functions or activities: – planning and decision making, – organizing, – leading, and – controlling. ■ Management, then, can be defined as a set of activities (including planning and decision making, organizing, leading, and controlling) directed at an organization’s resources (human, financial, physical, and information), with the aim of achieving organizational goals in an efficient and effective manner. ■ By efficient, we mean using resources wisely and in a cost-effective way. For example, a firm like Toyota Motor Corporation, which produces high-quality products at relatively low costs, is efficient. By effective, we mean making the right decisions and successfully implementing them. Toyota also makes cars with the styling and quality to inspire consumer interest and confidence. ■ To be effective, businesses must produce products that consumers are willing to buy. A company could very efficiently produce portable cassette tape players like this one but will not likely be very successful.
