Business
Unit 2
Production
Factors of production
1- Natural Resources
It is called the primary industries
It may be hard to believe that everything in the world is made only of 6 types of
natural resources:
a- Agriculture
b- Fishing
c- Mining
d- Water
e- Fuel
f- Energy
Example: toast and toaster
2- Raw Materials
Any goods used in the manufacturing of other goods. Almost all natural
resources we consume were raw material for other products but
It is very rare to buy natural resources, fish and vegetable
In everything we buy we can check the ingredients.
Supplies is different from the raw materials: supplies are the admin and help such
as a doctor, accountant. Advertising agency…..
3- Labour
It includes all the physical and mental work needed to produce goods and
services
Labour is a very expansive cost of doing business and many firms are
constantly searching to lower the cost of labour. Automation and
outsource-hire reduce the cost of labour.
4- Capital
Is the money invested in a business. Money can be changed to other
needed materials
Capital can be liquid (easy to spend) or non-liquid
5- Information:
About new technology, customers, competition, political conditions, and
source of supplies
6- Management
They are the people who control the factors of production listed before.
And make the decision.
What to make, what to buy, whom to hire, where to sell, and so on. The
manager can be one person or a group.
Review questions page 161
The Production Process
1- Purchasing
Mainly the raw materials or things needed for the production in all levels
2- Processing
(Non-service business) Which is converting one thing into another thing
example is oil refining
3- Quality Control
It ensures that the product makes conforms to certain standard
according the company standard or national / international standard
ISO: International Organization of Standardization.
Example: Chicken broiler and free-range chicken
4- Grading
It is related to the quality control, to check the size and quality according
to the fixed standard. Like grade A, grade B,..
Improving Productivity:
1- Training: 4 major types:
a- Initial training
b- Ongoing training
c- Retraining
d- Specialized training
2- Capital investment
3- Investment in technology
Activities Page 172 – 173
Human Resources
KWA Partners (exercise page 177)
This is a company helps through a job loss and their services is called
outplacement.
The Function of Human resources:
in a big company there will be Human Resources department will
-
Send the ad of job
Read your application
Make job interview
Hire you
Set up a training program
Study the labour market, where the employees come from
While in a small company the manager may do all of that
Labour Market:
It is the place where the employers (buyer of skills) meet the employees
(sellers of skills)
Example: to open a bakery you need the following types of workers:
1- Unskilled workers: dishwashers need some training
2- Semiskilled workers: cashiers need good training
3- Skilled workers: cake decorating graduating from educational institution
4- Professional workers: Baker Highly trained need good experience, also
the accountant and technical
What is important in employment?
1- The importance of Productivity:
How much is the salary and how much is the products: $ 500 a week, and 1000
cakes, then every cake costs 50 c, so they have to set how many pieces a
worker can do
2- Skilled labour knows what and how to do
3- A positive attitude feels happy to do
Looking for the right employee:
-
Ads in newspaper
Recruit on University or college
Post a job on the federal government job bank
Online recruiting sites
Post on the company website
Use an employee search firm (headhunter)
Un employee referral program
The application Process and interview:
Human resources department receives the applications include the cover letter
and the resumes accordingly will choose for the interview, which may be second
or third, there will be a reference check as well
Interview tips:
-
Dress in a proper way, not too formal, not too casual
Go alone
Make sure of the location
Plan to arrive early (traffic, other delay)
When you arrive take time to focus and calm down
When you meet give a firm handshake, smile, and make eye contact
Be pleasant, enthusiastic, and avoid talking too much, don’t say more than
what you are asked
- Listen carefully to each question, give a brief and complete answer
- Your body language, facial expressions and voice tone
- Remember to thank at the end and show your interest in the job
Questions not allowed (exercise by students)
Gender, race, religion, disability, marital status, number of children, birthplace.
Job training
Keeping the good employees (How)
Having the worker may cost money, training, and time so it is important to keep
the good staff, how? By extra benefits called PERKS: HYM, Food, Cloth, rest time
Departures, leave voluntarily
Dismissals, leave involuntarily
and Retirements:
Handling Compensation:
This is the most important issue for the employee, it has to be fair and
competitive, it is affected by demand and supply. There are types of compensation
-
Hourly wages
Salary
Salary and commission
Straight commission
Intensive bonus
Performance-based pay
Fee for service
Royalty and licensing fee
Stock options
Health and safety:
By law business must provide and maintain healthy and safe work environment
Health: Sick employee can not do well and will make loss
Safety: every employee has the right to:
- Be informed about hazards in workplace
- Identify job-related safety and health problems
- Refuse dangerous work
Employability skills
Business careers
Rights in the workplace
The rights of the Employee
-
The minimum age
Hours of work
Minimum wages
Overtime, holiday and vacation pay
Paid public holiday
Parental leave
Termination of employment
Recovery of unpaid wages
Protected grounds and human rights: harassment, age, gender, religion,
discrimination, etc
The rights of the employers:
-
Decide what their employments needs
Require qualification and experience
Hire promote and assign the most qualified person
Establish standard for evaluation
Discipline, demote or dismiss incompetent employee
Set employment terms
Establish salary / wages scales independently
MANAGEMENT
Managers are the people who get things done by directing individuals and
teams.
Management tries to achieve the best of company’s goals by best using
business’s human, financial and material resources.
Management performs four major functions for any business:
1- Planning
Planning is the process of setting realistic goals for business, both short
term and long term, and decide the best to achieve them.
2- Organizing
Organizing is arranging people and tasks to carry out the business plan. And
each department has its own manager who is responsible to determine
tasks and duties for his department.
Each management has three levels:
Upper: set long term company goals: CEO, COO and CFO,
Middle: interpret plans from the upper
Lower: implement plans from above
(figure 7.1 page 211)
3- Leading:
motivating, communicating and encouraging, showing the best way to do
4- Controlling:
to increase, maintain, or decrease the resources.
Managing Resources
Managers deal mainly with each resources area:
1- Purchasing
2- Production
3- Marketing and distribution
4- Research and development
5- Finance
Leadership Styles
All managers have different styles, depend on the manager’s personality
1- Autocratic leadership:
The autocratic leader takes control of the situation, he or she does not allow
employees to participate in decision making.
2- Laissez-faire leadership
The leader here leaves employees to do their job
3- Democratic leadership
It provides opportunities for employees to contribute the decision-making process
Ethical Behavior and Management:
Fair pay, reasonable hours, vacations, interesting work, taking care of the
environment and help the community.
Teamwork in Companies:
Advantages and disadvantages (figure 7.2 types of team page 220)
MARKETING
The rules of marketing:
1- Sell what a business makes
2- Manage a business’s brands
The do the following:
Research, development, sales, distribution, advertising and promotion
Without marketing the consumers wouldn’t know the service or good available
and accordingly companies will sell much less.
Branding:
Brand name
Logo or Trademark
Slogan
Brand identification
The product life cycle
Launch, Growth, Maturity, Decline and decision
Marketing concepts
The Four Ps of marketing
1- Product (or service): quality, design, feature, benefits, services and support
2- Promotion: how to encourage consumers to buy
3- Place: channels of distribution
4- Price: compare with competitors, value and sales
The two Cs of Marketing
1- Competitive market
2- Consumer market
Advertising
Roles for creating good advertising
1- Attract attention
2- Gain interest
3- Build desire
4- Get action