Lis 9065 2017

7/21/2017 EDWARD CHANDA MWALIMU
BUSINESS INFORMATION
EDWARD .C. MWALIMU
edward.mwalimu81@gmail.com

Meaning of Business
• All human beings are busy with some kind of work.
• These works are called human activities & maybe
categorized as economic and non-economic. i.e.:
productive or unproductive.
• All economic activities are productive= productive
because we get money, goods & or services after doing
these activities.

Meaning of Business Cont’
Activities in which we engage ourselves to earn our livelihood
are ‘occupation’.
Every person is engaged in some kind of occupation.
“Business” is also an occupation in which goods and services
are exchanged for money or money’s worth on expectation of
profit.
The word ‘Business’ literally means ‘state of being busy’.
Every human being is busy with some kind of work with a view
to earn his living.

DEFINITIONS
• According to L.H, Haney, “Business may be defined as
human activities directed towards providing or acquiring
wealth through buying and selling of goods”.
• Muneesh Kumar (1998) states that: business as an
organized economic activity undertaken to satisfy the
needs and aspirations of people in the society to earn
profits for livelihood.

• We can then conclude that the term “Business” includes
all those activities that are related to the production and
distribution of goods and services with a view to earn
profit.
• Further, it includes all those activities, which indirectly
help in production and exchange of goods such as;
transport, insurance, banking and warehousing etc.

Basic Characteristics Of Business
1. Businessman:
For any business to take off, there must be someone to take the
initiative (entrepreneur) visualizes a business.
2. Financing:
Finance, money or capital plays very important role in business.
It is required by all types of business whether small or large.
Without basic finance they can't move or take any step forward.

Basic Characteristics Of Business Cont’
3. Management:
Management is very important characteristic of business.
Without management the business cannot be controlled,
managed and run.
4. Economic Activities:
The activities which are involved in the production or
distribution of goods and services for economic motive are a
part of a business. But production made for manufacturer own
use is not included in business.

5. Profit Motive:
Profit is a driving force in any business activity. Businessman can
seek profit from business and avoid from loss.
6. Element of Risk:
There is an element of risk and uncertainty involved in every
business. If a firm is not able to control or minimize the risk
involved in business it suffers losses.

7. Regularity:
There must be a regular work of purchases and sales of goods or
services. So, a single deal may generate profit but can't be
treated as a business.
8. Consumer Satisfaction:
In business it is necessary to point out that the goods or services
that are produced are required by the customer. The satisfaction
of consumer is a main tool for earning more profit.

9. Creation of Utilities:
It is very important characteristic that facilitates creation of
commodities which can satisfy any human need. Business
creates utility which gives benefits to the entire society as well
as the businessman.
10. Organization:
Every business needs to be organization for successful
working. A proper organization structure is helpful in the
smooth running of business and achieving the goals &
objectives.

11. Competition:
There may be competitors in the market those that are
introducing same kind of products or services.
12. Sale or Transferring:
The sale or transferring of goods & services for money is
necessary for business. If goods are produced and kept with
him, there will be no chance of making any transaction.

13. Dealing in Goods or Services:
Every business deals with the sale, purchase, production and
exchange of goods and services for some profit.
14. Producing or Purchasing:
Business has two basic conditions that it deal in production of
goods and then sale them or it deals in purchasing the final
goods and resell in same conditions.

15. Employment Opportunities:
Business is a good source of employment for its owners or
partners as well as for other people.
i.e. # employees, agents, brokers, transporters, etc.
16. Decrease in Inflation:
If there is more than one producer of the same product in the
market. The prices of the commodities will be reduced. e.g.
Dangote.

17. Nature:
The nature of every business is not same. As such some
businesses produce cosmetics and some manufacture furniture.
18. Systematically:
Only under a well-planned system can a business make progress.
It means every business needs a well-planned system. Only under
a well-planned system a business can make progress.

Objectives of Business
Economic Objectives:
• Profit earning : business is started for earning profit. Profit is the
basic incentive to business pursuits. Profits are needed to face
various uncertainties like trade cycle, change in demand pattern,
fall in prices etc.
• A business needs profit not only for its existence but also for
expansion and diversification.

• Every investors wants adequate return on their
investments, workers want higher wages and the
entrepreneur needs money for reinvesting.
• All these demands and requirements will be met only
when some profits are made.
Economic Objectives Cont’:

• Production of Goods : Profit can be only earned when exchange
of goods and services takes place. So the aim is to produce goods
and sell them to the consumers.
• The producers estimate the demands for goods and produce
accordingly.

• The tastes, preferences and paying capacity of
consumers must be taken into account.
• A business creates form, place and time utilities and
meets the requirement of the society. So, a tangible
form of wealth is produced in the form of goods.
Production of Goods Cont’:

• Creating Markets : The aim of business is to sell products.
Marketing consists of those efforts which effect transfers in
ownership of goods and care for their physical distribution.
• Marketing covers all those activities which relate to the creation
of time, place and possession utility.

• The businessman searches for new consumers for
increasing his sales. An effort is made to retain old
consumers by supplying them better quality goods at
reasonable prices.
• The new markets are also exploited to keep a steady
demand for goods. An enterprise cannot exist without
finding out new market for its products.
Creating Markets Cont’:

• Technological Improvement : A business should always strive to
use new methods of production.
• In the world of competition, everybody tries to sell their products
by offering good quality products at lower prices.

• This is possible when latest technologies are used for
producing goods, there should always be an endeavour to
increase production and reduce cost.
• The businessman should try to devise new methods so that
he may keep pace with the changing business world.
Technological Improvement Cont’:

Human objectives
• Welfare of employees : The employees should be looked
upon as human beings. The old theory that workers should
be forced to get more work is no longer valid. With the
advent of industrialisation, production has increased many
times resulting in more profits to the businessman.

• The employees of an enterprise help in increasing the
profitability and they should also be given a due share in
profits.
• It may be in the form of bonus, increased allowances or
spending money on their welfare. Productivity should be
linked to various incentives schemes.
• They should be provided with physical comforts, material
incentives, appreciation, and dignity of labour and
conditions which will motivate them to give their best.
Welfare of employees Cont’

Satisfaction of Consumers
• The consumer should be provided quality goods at
reasonable prices. The tastes, likings and requirements of
the consumers should be properly researched.
• The business is meant for consumers and their satisfaction
should be the main objective of any business.
• So, business needs setting up and maintaining standards
of quality and service in addition to reasonable price.

Satisfaction of Shareholders
• Todays’ business world, ownership and management are in
two different hands.
• The shareholders are spread all over the country and they
have no hand in the day-to-day working of the business.
• Hence management should give reasonable return on the
money invested by the shareholders.

• The shareholders should also feel that their money is not
misused by the management.
• Taking these considerations into account, company law has
provided many restraints on managements so that the
company resources are employed for the welfare of all.
• These things are important to encourage more investment
into the business
Satisfaction of Shareholders Cont’

Social Objectives or Social Responsibility of the
Business
• The interdependency between business and society cannot be
overlooked. Without the society, business cannot exist and
society expects more from the business than merely earning
profits.
• H.R Brown has defined social responsibility as “obligation (of
manager) to pursue those policies, to make those decisions or to
follow those lines of action which are desirable in terms of the
objectives and values of our society”.

• Therefore, business should undertake those activities,
which are essential for the betterment of the society. Thus
this can be achieved through:
• To make Goods and Services available: The business should
ensure the smooth supply of goods to meet requirements
of the society. The business should estimate the total
demand for various commodities and adjust the production
accordingly.
Social Objectives or Social Responsibility of
the Business Cont’

• To Supply Quality Goods : The supply of quality goods and
services to consumers is paramount for any business. The
business should never supply adulterated goods, poor in quality,
unusable or harmful to health.
• A business cannot flourish in the long-run if it ignores
consumers.

• To Supply Quality Goods at reasonable prices : It is the
duty of the business to study wants and needs of
consumers and provide them with quality goods at
reasonable prices.
• The price should be fixed in such a manner that it ensures
good quality and supply at right time.

• Co-operation with the Government : Business should co-
operate with the government to achieve the objective of
socialistic pattern of society.
• The government devises roles for both public and private
sectors.
• The business community should adopt a positive approach
towards policies of the government and should help in solving
national problems.

• To make proper Financial Planning : The purpose of financial
planning is to make sure that adequate funds are raised at the
minimum cost.
• The required capital should be made available at all times and
requirement of finance and its possible sources should be
determined when starting an enterprise. A financial plan will
determine.
a. the needs of capital
b. sources for collecting funds, and
c. administration of capital structure.

• Location of Organisation: One of the important decisions to be
made by the management is the location of the organisation.
• If organization should be established in a place where distribution
of goods and services will be done with ease. It will open the
employment opportunity for the local people and will boost up the
national economy.

• Research: In a changing technological world, it is important to
use latest technologies for production and marketing of goods.
Change is the essence of business.
• Consider customers’ needs and preference in formulating
production and marketing policies.
• Research and development should have an important place in
the business.
• This will make you competitive.

• Sole Proprietorship
• Partnership
• Private Limited Company
• Public Limited Company
• Unlimited Company
https://zambianresourcecenter
TYPES OF BUSINESS ENTITIES

• The Registration of Business Names Act, CAP 389 of the
Laws of Zambia.
• Under this Act one can register business names, including
sole traders.
• Section 2 of CAP 389 of the Laws of Zambia recognizes a
sole trader as an individual, a business or a firm.
• The Act regulates the names that are to be given to
business names to avoid a conflict in names of companies.
Sole Trader

• The Act also prohibits sole trader business entities from using
the word ‘limited’ in their business names.
• Section 5 of the same Act requires that every firm or
individual to be registered should do so by filling in a
prescribed form or by sending a letter by post or delivering it
in person to the Registrar of Societies.
Sole Trader Cont’

• The letter should basically be an contains the
following information:
• The business name, the general nature of the
business, the principle place of operations,
personal details of the applicant such as full
names, address, age, gender and nationality.
Sole Trader Cont’

The Companies Act, CAP 388 of the Laws of Zambia
• A company by legal definition is a business entity whose
ownership is separated from its management.
• Under this Act the types of companies that can be formed are
public company with the minimum share capital for the
entity K100, 000 while a private company must have
minimum paid up capital of K10, 000).

The Partnership Act 1890 (Business Names Act)
• A partnership is a legal business entity with two or more
partners.
• This law identifies the minimum number of people that are
allowed to form a partnership as well as how profits should
be shared among partners
• In this form of business entity, partners carry out the
business, share the capital, profits and losses.

Statutory Corporations
• The establishment of these corporations is through Acts of
Parliament.
• Statutory Corporations also known as public corporations
are established under Acts of Parliament to perform public
functions which cannot be exclusively left in the hands of the
private sector.
• They, tend to operate on a semi-commercial basis
particularly after privatization

Statutory Corporations Cont’
• The Zambia National Broadcasting Corporation (ZNBC) which
was formed under the Zambia National Broadcasting
Corporations Act, CAP 154 of the Laws of Zambia.
• The Development Bank of Zambia (DBZ) which was formed
under the Development Bank of Zambia Act, CAP 363 of the
Laws of Zambia.
• The Zambia Revenue Authority (ZRA) which was formed under
the Zambia Revenue Authority Act, CAP 321 of the Laws of
Zambia.

WHAT IS BUSINESS INFORMATION????

Business Information
The information which a business needs to run successfully
including the information which helps its staff in their work
for the benefit of customers & in turn gives the org/business
a competitive advantage.

Therefore Business Information must possess the
following characteristics
Relevance
Timeliness
Accuracy
Clarity
Complete
Current
Cost and Value

Thus this information must be:
Verified to be accurate and timely,
Should be specific and organized for a purpose,
Presented within a context that gives it meaning and
relevance, and
Should be information that can lead to an increase in
understanding and decrease in uncertainty.

Functions of Business Information
Elimination / Reduction of Uncertainty
Aids Strategic Planning
Communication
Serves as a Memory Supplement
Simplifies Situations and Problems

System: Kumah (2006) defines a system as a set of
interacting/interrelated elements that are joined
together to achieve a common goal.
Hence the system receives inputs from the
environment, processes the inputs & offers outputs
Therefore business as a system accepts economic
resources in the form of inputs and processes these
inputs using business processes such as:

Production
Marketing
Human resources
Finance....etc...
 Thus the output of the business system is the product
or service and the information system is the feedback
of a business system making management a control
system.

ROLE OF INFORMATION IN BUSINESS CONT’
• Information Technology
 It is any technology which deals with collecting, processing,
storing, and communicating information or data.
Eg :
ATM machine
Finger print scanner
Printer

ROLE OF INFORMATION IN BUSINESS CONT’
• Information system
 It is a combination of hardware, software, infrastructure
and trained personnel organized to facilitate planning,
control, coordination, and decision making in an
organization.
E.g.
LMS
Online ordering of consignment.

 Business Information System: Its a set of interrelated
procedures using IT infrastructure in a business
enterprise to generate and disseminate desired
information.
 Such systems are designed to support decision making
by people associated with the enterprises in the process
of attainment of its objectives.

• The business information system(s) are sub-
system(s) of a business system and by
themselves serve the function of feedback and
control in a business system.

Role of IS in Business
At present, it is the Backbone of business.
It is used for;
Organizational communications, Data management,
Accounts, Logistics, Marketing, Sales, R&D, Customer
interaction
All types of forecasting

Advantages :
 Increased information speed.
 High efficiency and performance
 Networking to a global scale
 Multi-tasking capabilities.
 Ability to expand business phenomenally.
 Reduces error to a fraction.

Growing Concerns :
Too dependent on
Information systems.
Computer Crimes
Illegal access of data.
Lack of privacy

BUSINESS FORMATION
There are four common methods of
starting a new
venture:
1. Starting from scratch
2. Buying an Existing Business
3. Family Business Succession
4. Acquiring a Franchise

PROBLEMS ASSOCIATED WITH IDENTIFYING COMPANIES
 Difficulties to find information about limited companies
i.e. some companies may refuse to divulge information
about themselves.
 Data protection laws.
 Copyright laws
 Lack of channels to obtain information.
 Most of the information is outdated and not reliable.

PROBLEMS ASSOCIATED WITH IDENTIFYING COMPANIES
CONT’
 Lack of competition.
 Technical problems in terms of distance
i.e. Local, national, regional and international

 You first need to know what the company says
about its self, thus you must look at the following:
Promotional materials
 Do they publish in-house journals
 Research publications
 Press releases, interviews and public statements
 Customer support materials
 Annual reports
WHERE TO GET INFORMATION

Major Issues Causing Discontinuity
 Technological innovation and sub consequent obsolescence
of existing major industries and big businesses.
 Emergency of a world of one market but without suitable
institutions for handling it.
 Knowledge revolution which has made knowledge a crucial
resource of our society.
 Companies attempt to concentrate economic power into a
few a hands.

Major Issues Causing Discontinuity Cont’
 Companies use their political power contrary to public
interest.
 Companies are controlled by irresponsible elites.
 Business exploits & dehumanises workers and consumers.
 Business degrades the environment and lowers the
quality of life (e.g. Kalumbila, Mufurila)
 Business reinforces inequality in the distribution of
wealth and income.

Major Issues Causing Discontinuity Cont’
 These criticisms come from the environment &
most businesses may wish to change.
 However the success of a business depends on
how the manager acts on the criticisms from
the environment itself.
 These could be consumers or the government
through policies formulated by various
institutions hence the need to respond
adequately & efficiently.

TYPES OF INFORMATION BUSINESS PEOPLE USE
 No business can operate like an island and business
executives do not operate in a vacuum.
 And as such Businesses operate within a complex
(socio-economic, political & legal) and constantly
changing environment which affects its decision
making.
 To ensure chances of success, businesses need to scan,
monitor and examine their environment constantly.

Why do they
use what the
use?
How do
business
people use
information
?
Value?
Develop
Knowledge &
Skills
What do they
use?
Business Environment
Channels Types
Why do they
use
information?
Ideally, environmental
analysis will feed into a
company’s strategic
management process

The strategic management process
Analyse the
Environment
Formulate
Organisation
al Strategies
Implement
Organisationa
l Strategy
Evaluation &
Control

Environmental Scanning & Monitoring
Techniques
Environmental scanning is a concept from business
management by which businesses gather information from
the environment, to better achieve a sustainable competitive
advantage.
To sustain competitive advantage the company must also
respond to the information gathered from environmental
scanning by altering its strategies and plans when the need
arises.

SWOT
Industry Analysis
Techniques
Competitor Analysis
PEST QUEST
Environmental Scanning & Monitoring- Techniques

SWOT
(Strength-Weakness-Opportunity-Threat)
• Identification of threats and Opportunities in the environment
(External) and strengths and Weaknesses of the firm (Internal)
is the cornerstone of business policy formulation;
• It is these factors which determine the course of action to
ensure the survival and growth of the firm.

• SWOT analysis started out of research conducted at
Stanford Research Institute between 1960-1970. The
background to SWOT stemmed from the need to find out
why corporate planning failed.
• The aim of the research was to find out what could be
done about this failure.
• The Research Team were Marion Dosher, Dr Otis Benepe,
Albert Humphrey, Robert Stewart, Birger Lie.

• The SWOT analysis is an extremely useful tool for
understanding and decision-making for all sorts of
situations in business and organizations.
• SWOT is an acronym for Strengths, Weaknesses,
Opportunities, Threats.

SWOT Analysis

Studying Internal & External Environment
• The aim of any SWOT analysis is to identify the key
internal and external factors that are important to
achieving the objective. SWOT analysis groups key pieces
of information into two main categories:
Internal factors – The strengths and weaknesses
internal to the organization.
External factors – The opportunities and threats
presented by the external environment.

Examples of Strengths and Weaknesses
• Resources: financial, intellectual, location
• Creativity / ability to develop new products
• Valuable intangible assets: intellectual
capital
• Competitive capabilities

Examples of Opportunities and Threats
• Takeovers
• Market Trends
• Economic condition
• Mergers
• Joint ventures
• Strategic alliances
• Expectations of stakeholders

• Technology
• Public expectations
• Competitors and competitive actions
• Poor Public Relations Development
• Criticism (Editorial)
• Global Markets
• Environmental conditions
Examples of Opportunities and Threats

Uses of SWOT Analysis
Corporate planning
• Set objectives – defining what the organisation is
intending to do
• Environmental scanning
Internal appraisals of the organisations SWOT, this needs
to include an assessment of the present situation as well
as a portfolio of products/services and an analysis of the
product/service life cycle

• Analysis of existing strategies, this should determine relevance
from the results of an internal/external appraisal. This may
include gap analysis (compare its actual performance with its
potential performance which will look at environmental
factors)
• Strategic Issues defined – key factors in the development of a
corporate plan which needs to be addressed by the
organisation
• Develop new/revised strategies – revised analysis of strategic
issues may mean the objectives need to change
Uses of SWOT Analysis Cont’

• Establish critical success factors – the achievement of
objectives and strategy implementation
• Preparation of operational, resource, projects plans for
strategy implementation
• Monitoring results – mapping against plans, taking corrective
action which may mean amending objectives/strategies.
Uses of SWOT Analysis Cont’

PEST Analysis
• A scan of the external macro-environment in which the
firm operates can be expressed in terms of the following
factors:
•Political
•Economic
•Social
•Technological

• The acronym PEST (or sometimes rearranged as "STEP") is
used to describe a framework for the analysis of these
macro-environmental factors.
• A PEST analysis fits into an overall environmental scan as
shown in the following diagram:

Political Factors
Political factors include government
regulations and legal issues and define
both formal and informal rules under
which the firm must operate. Some
examples include:
•tax policy
•employment laws
•environmental regulations
•trade restrictions and tariffs
•political stability

Economic Factors
Economic factors affect the purchasing power of
potential customers and the firm's cost of
capital. The following are examples of factors in
the macro-economy:
•economic growth
•interest rates
•exchange rates
•inflation rate

Social Factors
Social factors include the demographic and
cultural aspects of the external macro-
environment. These factors affect customer
needs and the size of potential markets. Some
social factors include:
•health consciousness
•population growth rate
•age distribution
•career attitudes
•emphasis on safety

Technological Factors
Technological factors can lower barriers to entry,
reduce minimum efficient production levels, and
influence outsourcing decisions. Some
technological factors include:
•R&D activity
•automation
•technology incentives
•rate of technological change

Industry Analysis
An industry is a group of firms producing a similar
product or service
An examination of the important stakeholders’ group
in a particular corporation’s task environment is a
part of industry analysis

Porter’s approach to Industry Analysis
A corporation is most concerned with the intensity of
competition within its industry
The level of this intensity is determined by basic
competitive forces
In scanning its industry, the corporation must assess
the importance to its success of each of the six forces

New Entrants
Rivalry Among Existing Firms
Pressure from Substitute Products
Bargaining Power of Buyers
Bargaining Power of Suppliers
Government as a force in industry competition
Forces Driving Industry Competition

Threat
of New
Entrants
Bargaining
Power
of Suppliers
Bargaining
Power
of Buyers
Relative
Power
of Unions,
Governments,
etc.
Potential
Entrants
Threat of
Substitute
Products
or Services
Industry
Competitors
Rivalry Among
Existing Firms
Other
Stakeholders
Buyers
Substitutes
Suppliers

Competitive Analysis Framework
Michael Porter’s 4 component
competitive matrix answers:
◦ What drives the competitor?
◦ What is the competitor capable of
doing?
Objectives
Assumptions
Strategy
Capabilities

CREATING BUSINESS VALUE WITH
INFORMATION
 No business is static & as such all businesses change either
for the better or for worse depending on how information is
handled.
 Over the past years, most business managers have
considered the following as key issues in business change:
 Strategy: Provides direction & vision of the organisation.
 Organisational structure: Defines the roles & responsibilities
of personnel. These are the people who implement the
strategy.

CREATING BUSINESS VALUE WITH
INFORMATION CONT’
 Processes: This defines the tasks and activities that the business
executes. The tasks include manufacturing, distribution, sales,
marketing as well as research & development (R & D). Business
change involves doing away with certain processes.
 People: Rewards for performance, rewards motivate the
behaviours of people in terms of how they are going to do tasks
they are given.
 These are key issues in business change within companies.
Depending on how a business handles them, it’s competitors could
either out pace them or could have a advantage over them.

WHAT WE HAVE TO ASK OURSELVES
 What we know about customers
 What we know about services
 What we know about the products
 How well do we know what we know
 How well do we act on we know

Adding Value
Customers & Markets
Minimize
Risks
Market,
Financial,
Legal,
Operational
Creating New Realities
Intelligence (political,
social, technical ,etc
Reduce Costs
Transactions &
Processes
USING INFORMATION TO ADD VALUE TO BUSINESS

USING INFORMATION TO ADD VALUE TO
BUSINESS CONT’
Minimizing Risks:
 At all costs there is need to minimize risks when conducting
business. Use political & legal information which gives you
guidelines on how to operate.
 Are we keeping within the law?
 Is the work environment safe?
 Will our suppliers keep supplying us with goods?
 Are our products safe?
 Is our network secure?

USING INFORMATION TO ADD VALUE TO BUSINESS CONT’
Creating New Realities:
One requires using business information such as the in order
process to innovate What PEST factors are creating new
opportunities?
 What are our competitors doing that we could learn from?
 What do our competitors’ customers want which they are not
being supplied?
 What do our customers want that we are not supplying?
 What new ideas do our suppliers have?
 What new ideas do we have?

Reduce Costs:
 Look at the transactions & processes of doing that particular
business
 Do you have the technology required to do the business to
reduce costs?
 Is your business automated?

Adding Value:
 The focus should be on the customers and your
market
 Who are your customers?
 What is your market base?

 Therefore, information can be used in business processes and
transactions to reduce costs and improve productivity.
 In the past years, many companies have focused on using
information to reduce costs and minimise risks at the same
time.
 Additionally Information is also used to gain a competitive
advantage

END
Twasanta bingi
Tuna sakwilila ko mwane
Twatotela sana
Siabonga kakulu
Twalumba Kapati
Lwitumezi hahulu
Zikomo kwambiri

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