Business and Management

Important definitions

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Operations

the actual process of producing the output

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Marketing

Where the busniess has any dealings with the consumer

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Finance

Where the business manages its flows of cash and profit

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Human resources

where the business has any dealings with employees

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Primary sector

the extraction of materials form the natural world

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Secondary sector

the processing of materials inputs into physical output

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Teritary sector

the processing of outputs into non-physical output.

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Non-governmental Organisations

These businesses are "not for profit" and have public service goals: either to provide a particular service.

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Public Sector

Here the State owns the enterprise, and control is exersiced by the government of the day.

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Private Sector

Here the ownership and control of the enterprise is exercised by and individual or a groups of individuals.

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Mission Statement

A (short) sentence or two that sets out the philosophy, values, beliefs and culture of a business as it currently operates. As such it should be a reflection of the corporate goals of the enterprise.

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Vision Statement

where the mission statement is about the present, the vision statement is more about the future direction and broad development of the business.

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The purpose of a vision and a mission statement

  • To provide a focus for all employees, from senior management down to the shop-floor workers, of the business' goals.
  • Communicate this purpose to the outside world (stakeholders)

But...

  • the statement must be used carefully; if it is percived as nothing more than a piece of (clumsy) PR, then is can actually work against the business.
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Aims

The long-term general goals of the organization, often unguantifiable and qualitative

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Objectives

the long-term specific goals of the organisation, which should be quantifiable

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Strategy

the long-term plans developed by the business to achive its aims and objectives .

These are the decisions, taken by the senior levels of management, affecting the direction of an organization. They tends to:

  • Be multidimensional, effect many aspects of the organization
  • Solve a general, rather than a specific problem, through definition and analysis, but not necessarily action.
  • Be concerned with unique and major problems, whose solutions will have long-term implications.
  • Be qualitativ, rather than quantitative
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Tactics

the short-term ,routine, even day-to-day activities of te business to put its strategy into operation

These are the decisions made on a day.to-day basis to implement the strategic decsisions of the organisation. They tends to be:

  • based opon a procedure or a precedent set by senior management
  • taken at a relatively low level in the hierarchy
  • numerous
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SWOT Analysis

A widely used tool available to the decision maker is the SWOT analysis. Here, management must look at both the internal and external environment and assess:

Strengths and Weaknesses - of the organization

Opportunities and threats- to the organisation

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Driving and Restraining forces to change

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Porter's Generic Strategies

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Decision Trees

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Profit

Profit = Total revenue - Total total cost

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Organic Growth

where the firm increases its output through investment in new capacity, although this might require expanding into overseas markets. Once a firm operates, in a number of countries, ecpecially its production facilities, it becomes multinational.

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Takeovers

where the firm purchased sifficient shares of other companies to give them total control and thus make them subsidaries. Some firms, holding companies, specialise in simply owning other companies and have no core activities of their own.

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Strategic alliance

where two firms work together to a common objective

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