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Chapter 3

Chapter 3 Management.docx

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Department
Management
Course
MGM101H5
Professor
Dave Swanston
Semester
Fall

Description
Chapter 3 Management. page 36. • in order for a business to be successful, you must e able t properly identify solutions to the needs and desires of the marketplace, and creating a mechanism for delivering these solutions to the right customer, at the right place and time. • These actions ^ can be categorized into areas such as technology application, product engineering and design, manufacturing operations, sale, distribution and service. • An efficient and effective operating platform can be assessed against three fundamental characteristics: its commercial endeavours, its employee interaction model, and its organizational efficiency and structure. • commercial endeavours refers to the markets that the organization serves, the products and services it offers and the needs it professes to meet in the marketplace. Understanding this relationship, coupled with an understanding of the price/cost requirements needed to produce goods and services, is what enables the creation of a business system that delivers a profitable outcome to the organization. • employee interaction refers to the value-creating skills that an organization's employees bring to the marketplace. • organizational efficiency and structure is a reflection of the complexities of the business activities that circulate within an organization. • these three characteristics result in an understanding of a business system whose objective is the design, production, distribution, and communication of goods and services that are sought after by the marketplace and values by the customers. These characteristics are considered to be the foundations of a business. Assets + Labour + Capital + managerial acumen(the foresight, drive, knowledge, ability, decision-making competency and ingenuity of the organization's key individual--owners or top- level management) = Business model composition. • Role of a business owner or management team is to anticipate, recognize, and sense an opportunity to create a product or to deliver a service that is felt to be unique, and meaningful for the customers. Planning cycle staging. Direction/positioning: what do we want to do? why do we want to do it? can we do it? Implementation: how will we do it? what needs to be changed in order to succeed? where will resources be allocated? Assessment: did we meet our goal? what needs to be changed/improved? what systems require fine-tuning? what further capacity adjustments are required? Terms to remember Business: refers to the mission focused activities aimed at identifying the needs of a particular market or markets. assets: the infrastructure and resource base of the organization labour: human resource requirements of the business capital: money needed by an organization to support asset-based expenditures managerial acumen: the foresight, drive, knowledge, ability, decision making competency of the organization's key individuals -- its owners, or top level managers. business model (system): the operational platform or structure that a business uses to generate a profit. competitive advantage: an advantage that an organization has over its competitors that enables it to generate more sales. for profit companies: organizations whose objective is profitability and wealth creation not for profit organizations: is the opposite of for profit companies. they deliver services to people, groups and communities. they have a social goal. stakeholders: individuals or groups or organizations that have a direct or indirect relationship with an organization. stockholders: any person, company or organization that owns at least one share of stock Market segment: is a portion of the market that is deemed to possess unique characteristics businesses can target in order to generate a preference for their products and/or services. Difference between profit and profitability • profit is the bottom line result of an organization over a period of time. REVENUE - EXPENSES = PROFIT. • profitability corresponds to the efficiency and effectiveness of an organization to use its assets and i
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