Taking risk and making profit in the business environment
Risk and profit have a correlation, as an owner of a small business grasps the opportunity to make the profit. In the starting of the business, the risk is taken to earn the profit. The more business will take risk will earn more profit and vice-versa.
How economic affect business?
Economic factors are associated with money, goods, and services. These factors affect business directly.
Recession- Customer’s purchasing attitude can be changed due to the economic recession that may force many businesses to reduce the prices of their products.
Exchange rates- Business who deals in export and import of the product are the one majorly affected by the exchange rate (Bush, 2016).
Doing business in Global markets.
- 90% of the companies are operating globally and it is very important to have international experience for employees.
- UPS, MLB, the NFL and the NBA are the name of the U.S. organizations that are expanding abroad (Nickels, McHugh and McHugh, 2014).
Ethical behavior and social responsibility
Ethical behavior- Obeying the rules recognized by a particular class or group, profession, culture, etc. Performing in consistent ways that are considered to be good value in the eyes of society. Ethical behavior is considered to be good for business and consist of showing respect for moral principles like individual rights, equality, etc.
Social responsibility- Being socially responsible explains that organization and people are behaving ethically and with a warm feeling towards cultural, environmental, economic and social issues. Being socially responsible help organization, individual and government to drop a positive impact on society and development (Enevoldson, 2017).
How to form a business?
- Generate the idea of business.
- Evaluation of the risk and returns
- Select the form of business such as sole proprietorship, partnership, joint venture, company, etc.
- Arrange funds for the business
- Arrange other resources such as human resource, raw material, etc.
- Registration of the business.
Entrepreneurship and Starting a small business
The ability and enthusiasm to develop, form and maintain a business and taking the risk to generate profit are known as entrepreneurship. The new business startup is the example of entrepreneurship.
Step in starting a small business:
- Compose a business plan.
- Selecting the location of the business.
- Arrange funds for business.
- Select a form of business.
- Registration of business
- Obtain all compulsory documents such as licenses and permits.
Production and Operations Management
The process that combines and convert numerous resources used in the subsystem of production/operations of the organization into worth added product/services in a measured way as per the organization's strategies.
Production management is the set of interconnected activities of management that are involved in some of the products of manufacturing and if the same conception in service management is extended, then related management activities are known as operations management.
Motivation refers to a drive within the individual to attain a goal or perform a certain task. Employees that are highly motivated focus on their goals and to achieve those goals they give their best. Therefore, if the manager wants best from its employees than he/she has to motivate them (Skripak, 2016).
Human resource management
The process of recruitment and employee selection, giving induction program, training, employee assessment, offering benefits and reimbursement, motivating, upholding employees’ relations, ensuring safety, health facilities and welfare of employees is known as Human resource management (Mayo, 2017).
Dealing with Union and Employee-Management issues
Unions- In a particular organization when a group of workers comes together for the common issue of improving the working conditions of the workers.
Labor unions are accountable for: Minimum wage laws, Severance pay, Overtime rules, Workers’ compensation, Child-labor laws, and Job-safety regulations.
Goals of organized labor- Work with experienced and impartial management and to be treated with respect.
Marketing: Helping Buyers Buy- Product
Marketing- The process of promoting, selling and distributing the products to fulfill the needs and demands of the customers is known as Marketing. There are four eras of marketing: Production, Selling, Marketing Concept and Customer Relationship.
Production- It is a general saying that we should produce what we can as market is unbounded (Nickels, McHugh and McHugh, 2014).
Product- Item that can satisfy the needs of the customer is known as Product. The product can be in the form of physical item or service.
Developing and Pricing Goods and Services- Price
Total product offer- It is consist of all the aspects that customer evaluates before buying the product such as price, packaging, brand name, and convenience.
Product differentiation- Products are produced with inventive mix of pricing, packaging, and advertising for attracting customers.
Distributing products- Place
Location, method or distribution selected for the products or services to reach customers easily is referred as Place. Service or product itself shows the way it should be distributed.
Some of the distribution strategies are selling by a reseller, direct selling, selective distribution, intensive distribution and market coverage.
Using Effective Promotions- Promotion
Promotion- Promotion involves all the activities which are related to communication of the product, sales and activities, like social media, rebates, advertising, events, discounts, public relations, and coupons.
Effective promotions- Promotion is said to be effective when it results in increasing the sales of the business. If the advertisement is catchy then everyone will talk about it (Edmunds, 2017).
Understanding Accounting and Financial Information
The process of recording, categorizing, briefing and understanding the financial events and financial transactions to offer all the parties that are related to that information to make the decision.
Managerial accounting- It provides details to management that help them to make daily decisions for the sake of achieving the goals of the business.
Finance- Finance is the management of money in large amount, particularly by governments or big businesses or companies. Activities of finance include: Preparing the budget, planning expenditures and creating cash flow statements.
Financial Management- The process of planning, establishing, guiding and monitoring the financial activities like allocating and using the funds of the business.
Financing and Investing
Both investing and financing are different from each other but assist in a common purpose: to accumulate money or funds in the business. Both the activities are important for the long-term success of the business (Ingram, 2017).
Bush, T. (2016). PESTLE Analysis: Economic Factors Affecting Business. Retrieved from: https://pestleanalysis.com/economic-factors-affecting-business/
Edmunds, S.A. (2017). What Does Effective Promotion Mean? Retrieved from: https://smallbusiness.chron.com/effective-promotion-mean-61944.html
Enevoldson, N. (2017). What Is Social Responsibility? Retrieved from: https://www.imasocialentrepreneur.com/social-responsibility/
Ingram, D. (2017). Financing & Investing Activities of a Business Entity. Retrieved from: https://smallbusiness.chron.com/financing-investing-activities-business-entity-1884.html
Mayo, G.E. (2017). Human resource management. Retrieved from: https://www.whatishumanresource.com/human-resource-management
Nickels, W.G., McHugh, J.M. and McHugh, S.M. (2014). Doing Business in Global Markets. Retrieved from: https://instruction2.mtsac.edu/rjagodka/BUSM20_Course/IPPTChap003_Global_Markets.pdf
Nickels, W.G., McHugh, J.M. and McHugh, S.M. (2014). Marketing: Helping Buyers Buy. Retrieved from: https://instruction2.mtsac.edu/rjagodka/BUSM20_Course/IPPTChap013_Marketing.pdf
Skripak, S.J. (2016). Motivating Employees. Retrieved from: https://vtechworks.lib.vt.edu/bitstream/handle/10919/70961/Chapter%2010%20Motivating%20Employees.pdf?sequence=15&isAllowed=y