Midterm # 1 complete notes These are the complete notes for the first midterm. They are done completely on word, and they include all the diagrams and examples discussed in class. Extremely thorough and easy to read!

Business 111 Lecture Notes Preparation for first Lab Read What is a Case in the Lab manual Read the Joe McBrine case Be prepared to discuss the case using the format outlines in the What is a Case reading Get some thoughts down on paper in order to facilitate discussion What is Business? Business Defined The sum total of all activities involved in the creation and distribution of goods and services for private profit o Primary Activities of a Business Creation In the older days, creation was defined as production, whereas it is now defined as the Operations Function Distribution Getting the goods or services to the end user. This is the Marketing Function o Ancillary (Secondary) Activities Necessary to ensure we can perform the primary activities Accounting Finance Human Resources I.T. Legal etc. o Profit motive The fact that business does whatever it does for a profit separates it from the other areas of economic endeavor What is a model? A representation of reality Characteristics of a good model: 1. Simplification It helps to simplify our understanding of what would otherwise be a very complex phenomena 2. Structure It structures or frames our thinking regarding a complex topic 3. Framework It provides a meaningful framework for analyzing and studying a complex phenomena 4. Interaction It helps to show how the various aspects of reality interact with or impact upon one another (General Systems Theory) Our Course Model Critical Success Factors Indicators of Business Success: It is not enough to do just one of these things, we must do them all in order to be successful o Achieving financial performance o Meeting customer needs o Providing quality products and services This includes customer service o Encouraging innovation and creativity o Gaining employee commitment How can you as a manager gain the commitment and dedication from the people that work for you Stakeholders Individuals or groups who depend upon a company for the realization of their personal goals and upon whom the company is dependent for the realization of its goals. This relationship is said to be one of mutual dependency o Primary Stakeholders Owners Customers Employees o Secondary Stakeholders these stakeholders have a lower level of dependency compared with the primary stakeholders Suppliers Creditors Communities Government Society as a whole o Stakeholder Relationship Stakeholders provide business with the capacity to operate Owners provide capital Customers provide sales Employees provide labour Stakeholders therefore have very legitimate expectations of a business Owners expect a fair return on their investment (ROI) Customers expect quality products and services Employees expect to be treated fairly, to be paid fairly etc. Therefore businesses must recognize its responsibility to address stakeholder expectations Failure to address the stakeholder expectations will result in: Unmotivated and uncommitted employees o Low levels of creativity and innovation o Low levels of quality and customer service o Poor financial performance Dissatisfied and disappearing customers Angry shareholders and falling stock prices Potential bankruptcy of the firm Managements Primary Objective To devise and implement strategies that will allow the organization to achieve the critical success factors in a manner that meets legitimate stakeholder expectations In an attempt to achieve this primary objective, we must be able to analyze two very different sets of environmental factors: The External Environment and The Internal Environment Characteristics of the External Business Environment o Extremely dynamic and constantly changing; the pace at which it is changing is rapidly increasing o Increasingly competitive o Increasingly globalized o Complex, interactive, two-way phenomena At any point, there are all kinds of forces in the external environment that are impacting your firm Example: The airline industrys pressure on Southwest airlines to charge for bags, however, they did not cave to this pressure. Southwest came up with a strategy in response to this outside pressure, that in turn, further changed the environment o Largely uncontrollable from the perspective of the individual firm or manager We would like to be able to control many of the things in the eternal environment, but there is nothing we can do. We must simply respond after the changes take place The PEST model for analyzing an external environment o Because the external environment is largely uncontrollable, it must be constantly monitored by management o The goal is to be proactive, not reactive There must be some means setup whereby a firm can monitor the outside environment and implement strategies to prepare for change before it occurs o PEST breaks the external environment down into for sub-environments: Political Economic Social See textbook for examples Technological The Internal Business Environment o Unlike the external environment, a firms internal environment Is largely controllable o Consists of four (6) key functional areas Marketing Finance and Accountant Operations Management Human resource management and industrial relations o The internal environment will be focused on in BU121 Levels of Management o In most organizations (except very small businesses) there are three different levels of management Top or Executive level management Mid management Firs line (Supervisory) management o Each level has different but interrelated responsibilities o Top Management Primary responsibility: To both develop and implement the strategies that will be employees by the firm to realize the critical success factors Steps for formulating these business strategies will be looked at later on o Middle Management The strategy is passed down from top management for us to act on Mid-managers are people who manage other managers They are responsible for implementing the strategies developed by top management They devise both the tactical plans and functional strategies necessary to meet the goals set down by top management o First Line Supervise non-management employees They are responsible for implementing the functional strategies and tactical plans developed by middle management They manage the day to day and week to week activities of the individuals who do the actual work involved in building a firms products or providing the firms service The Process of management o All managers, irrespective of their level in an organization must master the process of management o Definition: The basic tasks that have to be performed by all levels of management in order the firms primary objective