Business Notes: Nature of a Business

Nature of Management Coordinating a business’ resources to achieve goals. Working with/through others to achieve goals in a changing environment. Features of effective Management Joint efforts of employees are directed towards achieving the business’ goals. Major factor influencing success or failure. Skills of Management Ability to do something well. Effective managers possess a range of skills and are able to use them in different situations. 1. Interpersonal Work and communicate with others and understand their needs. Ability to communicate, motivate, lead and inspire.

Communication – exchange of information between people. Communicating business goals and strategies is crucial to success. Managers who can communicate will find it easy to influence. Miscommunication can lead to serious harm to the business. Important for manager to be aware of the power for non- verbal communication e. G. Body language. 2. Strategic Thinking Thinking about the future direction and goals. Allows manager to see the business as a whole and to look at it in a long term perspective. 3. Vision Clear, sense of direction, allowing people to attain a common goal. Share vision, inspire others, managers will have to display leadership qualities. Leadership – ability to influence people to set and achieve specific goals. 4. Problem Solving and Decision Making. Problem solving – finding then implementing a course of action to correct an unworkable situation. This task involves decision making. Decision making – identifying options available and choosing a specific course of action to solve the problem. 5. Flexibility and Adaptability To Change. Managers must be: Flexible – able to be persuaded of influenced. Adaptable – able to change according to circumstances.

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Proactive – namely Acton Ana Toward planning. Reconciling the Conflicting Interests of Stakeholders. Stakeholders have a vested interest in its activities. E. G. Managers, employees, customers, and suppliers. Their expectations can be compatible/incompatible Strategies include: Employees share acquisition schemes To offer training and professional development to employees resulting in higher profits, which pleases shareholders and higher quality product thus satisfying customer expectations. Achieving Business Goals Goal – a desired outcome that an individual or a business intends to achieve within a certain time frame. Ђ Four main goals: maximize profits, increase market share, maximize growth and increase share price. Profits Profits minimization occurs when there is a maximum difference between total revenue (TRY) and total costs (ETC). Teases x price = TRY Dispenses incurred in operating the business = ETC Maximum profit = TRY at maximum difference from ETC Price may be lowered to increase number of sales Clever advertising may convince consumer to buy. Market Share Ђ Business’s share of the total industry sales for a particular product. Small change in market share can = big change in profit. Promotion increases market share.

Growth Maximize growth internally e. G. Employing more people. Increasing sales. Introducing innovative products. Purchasing new equipment. Establishing more outlets. Maximize growth externally e. G. Merging other businesses Acquiring other businesses. Share Price Part ownership of a public company. Companies need to satisfy their share holder by: Improving share price and paying healthy dividends. Community service