Management of the Enterprise
September 13 2011
Chapter 1: Managing Within the Dynamic Business Environment
Objectives of Business:
o The award of the business.
o Needs for paying employees, suppliers, bank, etc.
o Is important for maintaining a cash flow.
A business is any activity that seeks to provide goods and services to others while operating at a profit;
A profit is the amount of money a business earns above and beyond what it spends for salaries and other
expenses. Since not all business make a profit, starting a business can be risky.
Objectives of a Business:
- To survive/survival. (Very, very important element.)
o First year or two is very crucial for a business to survive.
o The next importance is the 5year mark.
o If it can survive when the economy goes down.
o To continue getting an award/profit.
- Social Responsibility
o A member of unity in which it opts in.
o Have certain social responsibilities to the workers, to the community.
o Example. Tim Horton’s responsibility of soccer teams, camps.
- Notional Profit
Earning a Buck: Risk Reward Trade-Offs
- Starting a business involves a risk.
- The profit is the reward for having taken the risk.
- Risk is the chance an entrepreneur takes of losing time and money on a business that may not prove
- Different people have different tolerances for risk. - Suppliers want to be paid
- Government wants compliance
- Employees want security
- Customers want value
- Surrounding Community wants “equity”
- Stalkholders want returns
Stakeholders: Those who stand to gain or lose.
Offshoring and Outsourcing
- Offshoring entails sourcing part of the purchased inputs outside of the country.
o In Canada, most of the offshoring that occur is in the States.
- Outsourcing means contracting with other companies to do some or all of the functions of a firm, such as
production or accounting.
There are 2 ways t