Introduction to Business and Management;
Historical Perspectives and Theories
Introduction to Business
Goods and Services
Goods are tangible items manufactured by
businesses, such as laptops.
Services
are
intangible
offerings
of
businesses that can’t be held, touched, or
stored. Physicians, lawyers, hairstylists, car
washes, and airlines all provide services.
Staple Food or Product
A staple food, product, or activity
is one that is basic and important in
people's everyday lives. Rice is the
staple food of more than half the
world's population.
Rice, wheat, maize (corn), millet, sorghum, roots and tubers (potatoes, cassava,
yams and taro), and animal products such as meat, milk, eggs, cheese and fish.
The tools, machinery, equipment, and buildings used to
produce goods and services and get them to the consumer
are known as capital.
Revenue is the money a company receives by providing
services or selling goods to customers.
Costs are expenses for rent, salaries, supplies, transportation,
and many other items that a company incurs from creating
and selling goods and services.
Profit = Revenue > Cost
Loss = Cost > Revenue
Risk is the potential to lose time and money or otherwise
not be able to accomplish an organization’s goals.
Four Factors of Production
Four traditional factors of production are common to all productive activity:
Land (Natural resources)
Labor (human resources)
Capital
Organization /
Entrepreneurship
Trade
The action of buying and selling goods
and services.
A trade occurs when two parties take
part in buying or selling goods or
services. The mechanism that allows
trade to occur is called a market.
Commerce
Commerce is the exchange of goods or
services among two or more parties. It is the
subset of business that focuses on the sale of
finished or unfinished products
Commerce deals with the various aspects of
business,
trade,
accounting,
financial
information/transactions and merchandising.
Trade is referred to as a basic economic activity that involves buying and selling of different goods
and services between two or more parties involved in the transaction. Commerce involves all the
activities that aid in promoting the exchange of goods and services from the manufacturer to the
last customers.
Business
A business is an organization that strives
for a profit by providing goods and
services desired by its customers.
Businesses meet the needs of consumers
by providing medical care, autos, and
countless other goods and services. G
Entrepreneurs
Entrepreneurs are the people who combine the inputs
of natural resources, labor, and capital to produce
goods or services with the intention of making a profit
or accomplishing a not-for-profit goal.
These people make the decisions that set the course
for their businesses; they create products and
production processes or develop services.
Because they are not guaranteed a profit in return for
their time and effort, they must be risk-takers. Of
course, if their companies succeed, the rewards may be
great.
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Management
Management is essential for an organized life
Good management is the backbone of successful organizations
Managing life means getting things done to achieve life’s objectives
Managing an organization means getting things done with and through
other people to achieve its objectives.
Definition of Management
Management is a set of principles relating to the functions of planning, organizing, directing
and controlling, and the application of these principles in harnessing physical, financial,
human, and informational resources efficiently and effectively to achieve organizational
goals.
According to Van Fleet and Peterson define management, ‘as a set of activities directed at
the efficient and effective utilization of resources in the pursuit of one or more goals.’
According to F.W. Taylor, ‘ Management is an art of knowing what to do when to do
and see that it is done in the best and cheapest way ‘.
According to Harold Koontz, ‘Management is an art of getting things done through
and with the people in formally organized groups. It is an art of creating an
environment in which people can perform and individuals and can co-operate towards
attainment of group goals.‘
How the best manager in this world can teach us management?
• For example, let us look at the managerial role of a mother and how
she uses the managerial ingredients in managing the home.
• First, she appraises her household and its needs.
• She forecasts the needs of the household for a period of a week or a
month or longer.
• She takes stock of her resources and any constraints on these
resources.
• In a large household, she divides the work among other members and
coordinates their activities.
• She encourages and motivates them to do their best in completing
their activities.
Even the recorded history shows the application of
some current management techniques as far back
as 5000 BC. when the ancient Sumerians used
written
records
in
assisting
governmental
operations. The Egyptian pyramids, built as early as
3000 BC., required the organized efforts of over
1,00,000 workers. It would be natural to assume
that all functions of modern management, namely,
planning, organizing, directing, and controlling
played a significant role in the construction of these
monuments. Similarly, the early civilization of India
bears witness to organized living.
Management Can Be Defined In Detail In The Following Categories :
•
Management as a Process
•
Management as an Activity
•
Management as a Discipline
•
Management as a Group
•
Management as a Science
•
Management as an Art
•
Management as a Profession