Business Management; MNB1501 from Unisa, Summary of Study Unit 1– The business world & business management www.mybcomstudies.co.za

1. STUDY UNIT 1
THE BUSINESS WORLD & BUSINESS
MANAGEMENT
BUSINESS MANAGEMENT
MNB1501

2. BUSINESS MANAGEMENT –
OVERVIEWMNB1501
Topic 2
Study Unit 6 – Planning
Study Unit 7
- Organising
Study Unit 8 - Leading
Study Unit 9
– Controlling
the
Management
Process
Study Unit 1 – The
Business World &
Business
Management
Study Unit 2 -
Entrepreneurship
Study Unit 3 –
Establishing a
Business
Study Unit 4 – The
Business
Environment
Topic 1

3. STUDY UNIT 1 – THE BUSINESS
WORLD & BUSINESS MANAGEMENT
The Role of Business in Society
Needs & Need Satisfaction
The Main Economic System
The Need-Satisfaction Institutions of the Market Economy (Free Market)
The Nature of Business Management
INDEX

4. THE ROLE OF BUSINESS IN
SOCIETY
The Business World is Complex System
Business Involves…
1. Human Activities
2. Production (Transforming Resources into Products & Services)
3. Exchange
4. Profit
Satisfy Needs & Improve Standard of Living
Products = Tangible (Bread, Cars, Homes, etc)
Services = Entertainment, Communication, etc
Market Economy = Freedom of Choice: What to Produce, How to Produce & What Price
to Sell at.
Resources Transformation Products/Service
Pay Profit
Back to
INDEX

5. NEEDS & NEED SATISFACTION
The Multiplicity of Human Needs
•Natural Resources
•Human Resources
•Capital
•Entrepreneurship
Society’s Limited Resources
Need Satisfaction Cycle
Back to
INDEX

6. THE MULTIPLICITY OF HUMAN
NEEDS
Maslow’s Hierarchy of Needs Satisfactio
n of the
Needs of
Society
Limited Resources
• Natural
• Human
• Capital
• Entrepreneurshi
p
Back to
INDEX

7. SOCIETY’S LIMITED RESOURCES
•Production Factor of LandNatural Resources
•Production Factor of Labour
Human Resources
•Not for final Human Consumption
•Working Life
•E.g. Buildings, Machinery, Computers
Capital
•Individuals who accept risks,
•Scarce factor of production, in the sense that not everyone has the
ability/capacity
Entrepreneurship
Back to
INDEX

8. NEED SATISFACTION CYCLE
Community
Economic
System
Entrepreneur
Communit
y not
Satisfied
• The driving force of the community is the
economic motive
• Market Economy, Socialism, Command Economy
• Economic Principle: How to ensure the highest
possible needs satisfaction with the scarce
resources
• Entrepreneurs are driven by PROFIT
Back to
INDEX

9. THE MAIN ECONOMIC SYSTEM
Market Economy (Free-market Economy)
•Capitalism
•Free
The Command Economy
•Communism
•State Owns & Controls
Socialism
•Compromise
Mixed Economy
Back to
INDEX
Market Socialism Command
Main
Characteristics
Private Ownership Mix State Ownes
Freedom of Choice
Markets Competition Limited No
Driving Force
Profit / Reward Profit Recognised Glory of State
State - Needs
Management Private Managed State + Private State Managed
Labour Independent / Free Free; Limited Strike rights Limited
Consumers Free Markets
Free; Except State Owned
Products
Limited - Set by State
Advantages Private / Freedom Full Employment Focused
Economic Stability
Disadvantages
Unstable Little Incentive Low Productivity
Fluctuations Unproductive Low Standard of Living
High Social Cost No Planning

10. THE NEED-SATISFACTION
INSTITUTIONS OF THE MARKET
ECONOMY (FREE MARKET)
BusinessOrganisations
•Need-Satisfying Institutions
•Fundamental Economic Problem
– Which, How & For Whom
•Accept Risk in pursuit for Profit
•Private Enterprise
GovernmentOrganisations
•Need Satisfaction Organisation
•Public Administration
•Products and Services that is of
strategic, economic or political
importance to the community,
e.g. transport, healthcare
Non-Profit-Seeking
•Business Organisation, seeking a
surplus of income over
expenditure, or at least balance.
Back to
INDEX

11. THE NATURE OF BUSINESS
MANAGEMENT
•Economics = Social Science
•Business Management = Applied Science
•BM – Limits to one component of the economic system
Economics & Business Management as related Sciences
•To produce the most units of products/services at the lowest possible
cost
•Task of Business Management – How?
•Study of Business Management – Ongoing Research
The Purpose & Task of Business Management
Back to
INDEX