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Lecture

BU111 Lecture Notes - Habitat, Operations Management, Retained Earnings


Department
Business
Course Code
BU111
Professor
Jim Mc Cutcheon

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Introduction to Business
Lecture 2 Notes - Business Environment/Management/Financial
System
Characteristics of the External Business Environment
Extremely dynamic and constantly changing
Increasingly competitive
Increasingly globalized
Complex, interactive, two-way phenomena
Largely uncontrollable from the perspective of the individual firm or manager
PEST: A Model for Analyzing the External Environment
Political, Economic, Social, Technological
Because the external business environment is largely uncontrollable it must be constantly
monitored by management
Goal is to proactive vs. Reactive
The PEST model breaks the external environment down into four sub-environments
o Discussed in Chapter 2 of your textbook
A Firm's Internal Environment
Unlike the external environment a firm's internal environment is largely controllable
Consists of four key functional areas
o Marketing
o Finance and Accounting
o Operations Management (Production)
o Human Resources Management and Industrial Relations
These functional areas are the focus of BU121
Levels of Management
In most organizations (except very small businesses) there are three different levels of management
o Top or Executive Level Management
o Mid Management
o First Line (Supervisory) Management
o Each level has different but interrelated responsibilities
Top Management
The primary responsibility of top management is to both develop and implement the strategies that
will be employed by the firm to realize the critical success factors
Middle Management
Mid Managers manage other managers
They are responsible for implementing the strategic plans devised by top management
They devise both the "tactical plans" and "functional strategies" (ie. Marketing financial, operational,
and human resource plans and strategies) necessary to achieve the strategic plans developed by top
management
First-Line (Supervisory) Management
First line managers supervise non-managerial employees
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