Transcript BBI 2O - ClassNet

UNIT 2: Functions of a
Business
Chapter 5:
Production
Factors of Production
Natural Resources
Everything in the world is made
from: agriculture, fishing and
trapping, mining, water, fuel and
energy, logging and forestry.
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Factors of Production
Pick three common items. Trace
them back to their natural
resource(s).
These industries are known as
primary industries.
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Factors of Production
Raw materials are any goods
used to make other goods.
→ingredients are raw materials
that go into a product through
processing
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Factors of Production
Raw materials are any goods
used to make other goods.
→supplies are raw materials
that do not become part of a
new product
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Factors of Production
Labour
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All the physical and mental work
needed to produce products
automation – replacement by
robots
outsourcing – hiring another
company to perform a task
Factors of Production
Capital
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Money invested into a business
liquid – can be converted into
something else quickly (ie.
cash)
non-liquid – something
difficult to convert (ie.
equipment)
Factors of Production
Capital
intellectual property –
something intangible (ie. idea),
which cannot be converted at
all
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Factors of Production
Information
Comes in different forms, has
become a tradable commodity.
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What information costs money?
What information can be sold?
Factors of Production
Management
People who control the factors of
production.
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The Production Process
Purchasing
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To make any product you need to
buy ingredients or supplies.
• Try to get needed products at
best price
• Also consider quality, hidden
costs
The Production Process
Processing
Convert the purchased materials
into a usable product
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The Production Process
Quality Control
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This is used to ensure that the
product a company makes
conforms to certain standards.
• Standards may be set by
company or government (ie.
ISO standards)
The Production Process
Grading
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Quality control is used to grade
products in comparison to the
standards; “grade A” is the best
• Other forms: size (eggs),
colour (maple syrup),
seconds/scratch and dent
Improving Productivity
• Training
• Capital investment
• Investment in technology
• New inventory systems
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UNIT 2: Functions of a
Business
Chapter 6:
Human Resources
Functions of HR
Management
n
Fs
of HR Management
Make sure you read pg. 178-194
The HR Department is
responsible for coordinating all
employee-related activities.
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The Labour Market
Where employers meet employees
n
Fs
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of HR Management
Unskilled labour
- those requiring little training
Semiskilled labour
- requires some instruction
Skilled labour
- requires extensive education
Professional labour
- highly trained, specific educ.
n
Fs
of HR Management
Determining the Need for a
New Employee
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HR department knows how many
employees they need, and the
impact changes in the plant will
have on staffing. Need to monitor
employee turnover, rate at which
employees leave.
n
Fs
of HR Management
Determining the Need for a
New Employee
HR is in charge of hiring qualified
people for all positions.
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n
Fs
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of HR Management
Companies may:
• Post job ads in newspapers,
online
• Recruit
• Hire an employee search firm
(headhunter)
• Search through applicants
n
Fs
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of HR Management
HR Dept:
• Receives applications
• Screens
• Interviews
• Hires
• Arranges job orientation and
training
n
Fs
of HR Management
HR Dept also:
• Conducts exit interviews for
employees who leave
• Conducts corrective interview
for dismissals
• Handles retirement
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n
Fs
of HR Management
HR Dept also:
• Provide support for employees
laid off
• Based on seniority (last
hired, first fired)
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• Severance package - $$$
• Outplacement counselling
n
Fs
of HR Management
Handling Compensation
• Wages – minimum, overtime
• Salary
• Salary plus commission
• Straight commission
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n
Fs
of HR Management
Handling Compensation
• Incentive bonus
 Given
for reaching quotas
• Performance-based pay
 Based
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on piecework
 Good case: work-from-home
 Bad case: sweatshops
n
Fs
of HR Management
Handling Compensation
• Fee for service
 Get
paid for performing a task
• Royalty or licensing fee
 Paid
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for the use of your idea
 eg. musicians, artists, NHL
• Stock options
n
Fs
of HR Management
Health and Safety
Health
• Administering sick pay
• Offering wellness programs
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n
Fs
of HR Management
Health and Safety
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Safety
• Training
• Identification of potential
hazards
• Ergonomics
• WHMIS
Key Employability
Skills
Key Employability Skills
1. Academic Skills
• Communication
• Speak, listen, read, write
• Think
• Critically, logically; solve,
decide; specialized knowledge
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• Learn
Key Employability Skills
2. Personal Management
Skills
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• Positive attitude and behaviour
• Self-esteem, confidence,
honesty, ethics, initiative
• Responsibility
• Set goals, plan, manage
resources, adaptable
Key Employability Skills
3. Teamwork Skills
• Work well with others,
contribute, can lead as well as
follow
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Key UNEmployability Skills
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• Low grades and low levels of
academic accomplishments
• Poor attitudes, lack of selfconfidence
• Lack of goals, poorly motivated
• Lack of enthusiasm, lack of drive,
little evidence of leadership
potential
Key UNEmployability Skills
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• Poor preparation for interview
• Excessive interest in benefits,
unrealistic salary demands and
expectations
• Inadequate preparation for type of
work, inappropriate background
• Lack of extracurricular activities
• Inadequate basic skills (reading,
writing, math)
UNIT 2: Functions of a
Business
Chapter 7:
Management
How Management Functions
How Management Functions
Managers are people who direct
individuals or teams, and are
responsible for them.
Management performs four major
functions:
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How Management Functions
Planning
• Setting realistic short-term and
long-term goals for a business
• Mgrs must develop strategies
to meet goals
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How Management Functions
Organizing
• Arrange people and tasks to
meet goals
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How Management Functions
Leading
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• Leading teams, managing
conflict
• Motivating: use various
factors to increase productivity
• Communicating: give
directions, state values, plans,
goals effectively
How Management Functions
Leading
• Encouraging Participation:
give employees ownership by
letting them be a part of
decision-making processes;
further motivation
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How Management Functions
Controlling
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• How managers increase,
maintain, or decrease their
allocated resources
• Done using employee
discipline, performance
appraisals, budgeting
Managing Resources
Managing Resources
Purchasing
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• Purchasing manager negotiates
for supply and delivery of raw
materials, equipment,
supplies, etc.
• Arranges for just-in-time
(JIT) delivery to reduce need
for warehousing
Managing Resources
Production
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• Production manager ensures
business produces product
properly;
• Arrange for processing,
packaging, storing
• Shift scheduling, repairs
Managing Resources
Marketing and Distribution
• Marketing and distribution
manager ensures product gets
sold
• Develop sales strategies, ads,
promos, transportation
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Managing Resources
Research and Development
• The R&D departments create
new products, or come up with
better ways to make product,
sometimes based on feedback
from customers
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Managing Resources
Note:
cUstOmers
not
cOstUmers
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U O it to your customers to get it right!
Managing Resources
Finance
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• The comptroller, or manager
of finance is often an
accountant.
• Keeps track of financial
transactions, records, sets
budgets with other departments
Leadership Styles
Leadership Styles
Leadership styles depend on the
manager’s personality and the
situation.
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Ethical Behaviour and
Management
Eth. Beh. & Management
Management & Employees
• Fair pay, reasonable hours,
vacations, interesting work
• Treat employees with respect
and dignity
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Eth. Beh. & Management
Management & Environment
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• Consider impact of decisions
on the environment
• Try to minimize environmental
damage
• See table 7.1, page 219
Eth. Beh. & Management
Management & Community
• Contribute to charitable
organizations
• Consider community in
decision-making
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Teamwork in Companies
UNIT 2: Functions of a
Business
Chapter 8:
Marketing
The Role and Impact of
Marketing
Role & Impact of Mktg
Marketing:
• sells what a business makes
• manages a business’s brands
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research development sales
distribution advertising
promotion
Role & Impact of Mktg
Branding
- creating an identity for a product
1. brand name – word(s)
2. logo/trademark
- symbols
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3. Slogan
– short catchy phrase
brand
identification
Role & Impact of Mktg
Effective marketing increases
brand equity: the value of the
brand in the marketplace.
The goal: extend the product life
cycle.
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Role & Impact of Mktg
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Non-traditional Product Life
Cycles
• Fads – extremely popular for a
short period of time
• Niches – a product dominates in a
section of the market
• Seasonal – sales vary according to
the season
Marketing Concepts
Marketing Concepts
The Four Ps of Marketing
• product
• quality, design, features,
benefits, service and support
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Marketing Concepts
The Four Ps of Marketing
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• price
• compared to competition
• perception of value
• impact on sales/profit
• price sensitivity
Marketing Concepts
The Four Ps of Marketing
• place
• channels of distribution
• direct channels
• indirect channels
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• importers, wholesalers,
retailers, specialty channels
Marketing Concepts
The Four Ps of Marketing
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• promotion
• advertising, but more
• coupons, contests,
premiums, samples, special
events
Marketing Concepts
The Two Cs of Marketing
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• competition
• direct: those offering
product similar to yours
• indirect: other products
which may attract customer
dollars
Marketing Concepts
The Two Cs of Marketing
• competition
• the percentage of the market
that a brand has is called its
market share
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Marketing Concepts
The Two Cs of Marketing
• consumer
• based on demographics: age,
gender, family life cycle,
income level, ethnicity and
culture, lifestyle
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Advertising
Advertising
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Creating good advertising means
following the AIDA formula:
attract Attention
gain Interest
build Desire
get Action
Advertising
Advertising is paid promotion.
Publicity is FREE
→ sometimes bad!
Companies will hire “PR” firms
to influence news.
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Advertising
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Different types of advertising
• direct-to-home
• out-of-home
• radio
• television
• newspapers • magazines
• internet
Advertising
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Advertising is compared base on:
• reach
• frequency
• selectivity • durability
• lead-time
• mechanical requirements
• clutter
• cost
Marketing Research
Marketing Research
… is the collection and analysis of
information that is relevant to the
marketing strategy.
Types of Marketing Research
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Quantitative - e.g. questionnaires
Qualitative – e.g. focus groups
These are both PRIMARY research
Marketing Research
Uses two different types of data.
Secondary data
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• Information others have
already collected in the course
of doing some other research
• But can’t answer all questions
Marketing Research
Primary data
• data collected specifically for this
research project
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UNIT 2: Functions of a
Business
Chapter 9:
Accounting
Basic Accounting Concepts
Basic Accounting Concepts
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Accountants…
• answer financial questions
about the business
• keep financial records upto-date and accurate
• provide financial information
in the decision making process
Basic Accounting Concepts
Accounting is the process of
recording, analyzing and
interpreting the economic
activities of a business.
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Basic Accounting Concepts
Any activity of exchange of
money is called a transaction.
Bookkeeping is the recording of
all these transactions.
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Basic Accounting Concepts
Most businesses use a doubleentry bookkeeping system—
every transaction involves two
changes.
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Ie. Paying a gas bill means:
(a) subtracting money from bank acct
(b) subtracting from money owed to gas co.
Basic Accounting Concepts
Personal
Assets
Something of value that is owned
ie. building, equipment, product
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What are some of your tangible assets?
Intangible assets?
Basic Accounting Concepts
Liabilities
What you owe, debts
ie. mortgage, loans, bills not yet
paid
Do you have any liabilities?
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Basic Accounting Concepts
Personal Equity
Also called Net Worth.
Assets – Liabilities = Net Worth
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if net worth is negative, you are in debt!
if it is positive, you are doing well!
Basic Accounting Concepts
Business
Owner’s Equity is the “net
worth” of a business.
Assets - Liabilities = OE
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If it’s a publicly traded company, it’s called
shareholder’s equity
Basic Accounting Concepts
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Transactions that have yet to
occur in a business are broken
into two general categories:
money owed to business:
accounts receivable (an asset)
money business owes: accounts
payable (a liability)
Financial Statements
Financial Statements
Different financial statements help
present information about the
business in different ways, and
help communicate that
information.
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Financial Statements
Balance Sheet
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• summarizes information about
assets, liabilites, and owner’s
equity
• snapshot at a point in time
• balanced because A = L + OE
Financial Statements
Balance Sheet
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1.
2.
3.
4.
5.
Fill in the statement heading
List the assets (incl. A/R)
List the liabilities (incl. A/P)
Calculate owner’s equity
Put it all together
Financial Statements
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Financial Statements
Income Statement
• summarizes info about revenue
and expenses
• indicates profit or loss over a
period of time
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Financial Statements
Income Statement (for a service)
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1. Fill in the statement heading
2. Organize the revenue section
3. Organize the expenses
section
4. Calculate net income or net
loss
Financial Statements
Income Statement
revenue – expenses = net income
if net income < 0, called net loss
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Financial Statements
Income Statement
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When expenses are shown on
an income statement, they
should be on the same monthly
statement as the revenue they
generated → called the
matching principle.
Financial Statements
Income Statement
The main difference between
service and retail is that with
retail there is also inventory—
the goods that are sold.
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Financial Statements
Income Statement (for retail)
formulas:
revenue – cost of goods sold
= gross profit
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gross profit – expenses = net income
Financial Statements
Income Statement (for retail)
Need to add new section to revenue:
Beginning inventory, Jan. 1, 20__
Inventory purchased
Cost of all goods available for sale
Ending inventory, Dec. 31, 20__
Cost of goods sold
$ 50 000
+ 75 000
125 000
- 40 000
$ 85 000
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This needs to be subtracted from revenue.
Financial Statements
Income Statement (for retail)
Sales Revenue
Cost of Goods Sold
Gross Profit
$150 000
- 85 000
$ 65 000
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This
needs
to
be
subtracted
from
revenue.
see page 292 for completed sheet.
Financial Statements
An income statement is usually
created before a balance sheet to
calculate net income, which gets
added to the owner’s equity.
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Financial Statements
Cash Flow Statements
• reports on flow of cash in and
out of the business over a
period of time
• helps estimate the amount cash
coming through a business
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