BMAD ch1

• The field of management has existed for decades; however, the landscape of management is changing daily
• As a manager today you will face many requirements and demands that are quite different to those of even five years ago
• Business


  A system or organisation, within which goods are produced and sold, and/or services are provided, prompting an exchange for these goods or services
• A business requires investment and a customer base that is large enough to make the business profitable; customers must consistently buy the business's products or services
• Types of businesses


  • Privately owned
  • Not-for-profit
  • State-owned
• Forms of businesses

  • Formal
  • Informal
• Formal businesses


  Registered with the relevant authorities and pay tax on their earnings
• Informal businesses


  Not registered and therefore do not pay tax
• Formal businesses


  • Capitec Bank
  • Nando's
• Informal businesses


  • Hawkers
  • Vendors
  • Freelance plumbers and builders
  • Hairdresser or barber operating on the roadside or working from home
• Businesses exist to satisfy humanity's wide and almost unlimited range of needs
• Factors of production

  Scarce resources that businesses convert into products and services
• Sustainable development is 'development that meets the needs of the present without compromising the ability of future generations to meet their own needs'
• Sustainability approached in a way that fundamentally incorporates new thinking and principles into how a business operates, rather than these being set as separate goals and outcomes, has been shown to improve business performance
• The technologies of the Fourth Industrial Revolution (4IR) are central to the future of both business and sustainability
• Technology-driven threats to sustainability come from issues such as rapidly increasing demands for raw materials to make cellphones and computers, environmental impacts when extracting these materials, the creation of tons of e-waste, the additional energy needed to drive data centres and run hardware, and social inequalities created and/or exacerbated by technology
• Businesses in the formal sector are registered with the relevant authorities and pay tax on their earnings
• Businesses in the informal sector are not registered and therefore do not pay tax
• Formal businesses


  • Clothing store in a mall
  • Shopping centre
  • Cellphone company
• Informal businesses


  • Vendor selling goods at the traffic lights
  • Roadside vendor selling food
• Types of need-satisfying organisations

  • For-profit businesses
  • Non-profit organisations
  • State-owned enterprises (SOEs) or government organisations
• For-profit businesses


  Have a profit motive as their primary goal is to convert factors of production into products and services to satisfy market needs, and to distribute profits to shareholders when appropriate
• State-owned enterprises (SOEs)


  Have varying levels of government control and intervention through government ownership
• State-owned enterprises (SOEs)


  • Airports Company South Africa (ACSA)
  • Armaments Corporation of South Africa (Armscor)
  • Compensation Fund
  • South African Airways (SAA)
  • Eskom
  • Telkom SA Ltd
  • Transnet
  • South African National Road Agency Limited (SANRAL)
  • South African Broadcasting Corporation (SABC)
• Non-profit organisations


  Offer products and services that are philanthropic or community-centred, profit is not the primary motive
• Non-profit organisations


  • South African Red Cross
  • Business Unity South Africa (BUSA)
  • Reach for a Dream Foundation
  • Childhood Cancer Foundation South Africa (CHOC)
  • South African Chamber of Business (SACOB)
  • Nelson Mandela Children's Fund
• Four elements of business

  • Humans and human activities
  • Goods and services: processes that convert resources into goods and services
  • Profit/surplus
  • Exchange
• Humans and human activities

  The people that are involved in a business and the human effort involved in producing goods and services
• Humans and human activities

  • An online retailer employs 150 staff members
  • A hair stylist employs one receptionist
  • An entrepreneur has started a new business and is currently the only employee in the business. The business is owner-managed.
• Goods and services: processes that convert resources into goods and services


  Resources can be natural resources such as land, water, minerals and wood; they can also include people (human resources) who bring expertise to the business, as well as capital resources such as equipment, buildings, and technology that are used in the process of conversion
• Goods and services: processes that convert resources into goods and services


  • A furniture company may use wood, glues, plastics, metal, and different types of machinery in a defined process to create its furniture
  • An accounting firm packages its knowledge and expertise to offer accounting services to its customers. It takes its customers' businesses through an audit process.
• Profit/surplus


  Applies to for-profit and non-profit businesses. A non-profit still has to make a profit (a surplus of income over expenditure) to stay in business.
• Profit/surplus


  • A for-profit business makes 30 per cent profit on each item that it sells
  • A non-profit business receives enough donations to cover all costs and invest in its cause every month
• Exchange


  The products or services that businesses produce are given to customers in exchange for something-generally, in exchange for money.
• Exchange


  • A customer receives a food order and pays cash in exchange for the food and delivery thereof.
• The purpose of business management is to ensure that the business produces the greatest number of units of goods or services at the lowest possible cost, in the shortest amount of time, and of the right quality
• Business managers are accountable for the success and competitive advantage of the business and of their department in the business; this success must be achieved within the contexts of sustainability and digital transformation
• Accounting services


  Services offered by a for-profit business to its customers, which takes them through an audit process
• For-profit business


  Makes 30% profit on each item it sells
• Non-profit business


  Receives enough donations to cover all costs and invest in its cause every month