Business Resources and Organization: Types, Advantages, Disadvantages, and Scale Economies, Esquemas y mapas conceptuales de Economía de la Empresa

¡Descarga Business Resources and Organization: Types, Advantages, Disadvantages, and Scale Economies y más Esquemas y mapas conceptuales en PDF de Economía de la Empresa solo en Docsity! THE ROLE OF A BUSINESS Provide goods and services to meet needs and wants by organizing resources. Some business focused on 1 activity, some others focused on more than one. - Try to add value to and object too and object so people are willing to pay for them. Business activity: Resources - Human resources (people working) - Physical (raw materials ) - Financial (money) - Business ( OBJ. value, culture) Processes Manufacturing Results Products - Consuming goods (directly sold to consumers) - Capital products (they are sold to the business) - Services BUSINESS FUNTIONS All business have 4 business functions to organize their resources. (Big and Small) - Human resources (Ensuring that specialized people are employed and that the people are suitably rewarded for doing so ) - Finance and accounts Ensuring that appropriate funds are made available to make the product or service. - Operations 4 business funtions Human resources Finence and accounts Operations Marketing Ensuring that appropriate processes are used in order to make the product or service and that the product or service is of the desired quality. - Marketing Ensuring that the business offers a product or service that is desired by enough people or businesses for profitable operations BUSINESS SECTOR Division of a countries population ore businesses depending on the economic activities they operate in. - Primary, secondary, tertiary. P = Raw materials ( extraction, mining, farming, fishing, hunting ) S = RM are Processed usually by a manufacturing T = involves services (hairdresser) Q = subgroup (tertiary) o Involving IT, media, social network. Production chain or chain of production = he steps through the different sectors that must be made to turn raw materials into a consumer good that is marketed HORIZONTAL INTEGRATION BACKWARDS INTEGRATION A company integrates another company, part of the same sector moves (like Santander achieved bankia) OBJ – To get stronger, (have more costumers) Botones PRI ZaraSEC VERTICAL INTEGRATION Company integrates another companies from another sector Santander BankiaTER Integrates with another company from previous sectors, warranty raw materials, lower cost, warranty supplies. BUSINESS PLAN Def = A document that addresses all the issues that need to be planed before de operations begin. - It involves stepping back from day-to-day operations and asking where the business is heading and what its priorities should be. - short-term and long-term objectives - Check every 5 years (To follow up, look for money, check company alined) There are six elements of a business plan: o the business idea, aims and objectives o business organization o HR o finance o marketing o operations. TYPES OF ORGANIZATIONS Public Sector Private Sector Group of companies and business that are own by the state, witch manage team is appointed by the government ruling. Belong to private people FOR-PROFIT Sole Traders ADVANTAGES: - Complete control - Flexibility (you work for your own) - Privacy - Pay role - Easy to set up - Startup cost are low - Close ties to customers DISADVANTAGES: - Competing with big companies - Take desitions one your own - Lack of continuity when the owner leaves the company - Difficult to get finance - Unlimited liability Partnership 2 to 12-20 owner CARACT. Example (lawyer firm) - come to a point where the owner ship and profits are divided. Usually work in the company and share responsibility They make desitions jointly. No legal distinction (unlimited liability) in between the owners and the person. Finance is more available Most of them are sleeping partners - provide investment ore finance and expects a profit Each of pattens have more knowledge or experience in a certain section, helps each other. Privacy More stable - more continuity. The share equally the profit but not necessary Benefits: - Don’t make your desitions alone - Complement each other - More stability and leas rick than sold traders - More access to finance - Partners can cover each other Disadvantages: ⁃ Unlimited liability ⁃ Lower aces than a company - compite with big company ⁃ Have to share the profits among the partners Companies or corporations  The business and the owners of the business are legally separated  Limited Liability: Owners are not liable for any of the debts of the business; their liability is limited to their investment  The shareholders own but do not run the business  The legal existence and information are matters of public record  Greater finance is generally available  A company is held to a high degree of accountability: published, audited company reports, an annual general meeting, extraordinary general meetings 8 Marks. - 1st paragraph introduction - 2nd paragraph advantages (2-3) - 3rd paragraph disadvantages (2-3) - (4th paragraph conclusion) For-profit social enterprises: A form off business that has a social purpose: improve human social or environmental well-being COOPERATIVES A For- profit social enterprise a form off business that has a social purpose, form off a partnership were the owners run the business. Financial cooperatives - Finance institution that has ethical and social aims witch compare to making a profit. They will lent money to people with more risk off paying back, let money to small business Housing cooperatives - Built up a building to live there. - Ex. Cooperative Mondragon. Producer cooperative - Group off producers that collaborate in different stages of production. Consumer cooperative - Get together to have access to lower access Cooperatives advantages and disadvantages: ADVANTAGES - Social aid - Receive tax exemptions, receive help from the government and they usually manage cooperative in a democratic way. DISADVANTAGES - Little profit sometimes this can lead to demotivation. RELATE IT TO THE TEXT - Lack of excellence (want to help people low price you don’t make a big effort) - Limited sources of finance - The democratic style doesn’t work always - Don’t pay high salaries they are not able to hire the best people MICRO-FINANCES A non-profit social business that lends small amounts of finance to people who cannot access to it through a back asking them to pay it back with a small interest ADVANTAGES - They help the people that have difficulties and that cannot get loans from the bank. - They help the community - Promote the culture, usually shop that have to do with manual work. DISADVANTAGES - Risk of not getting back the loan. - It can be seen as unfair; the social aim should be bigger they sudent be and interest PPP ( PUBLIC PRIVATE PARTNERSHIP) Business created between the public sector and the private sector looking for warranting certain services. Ej. Education, Health-Care - Public sector provides finances and private sector the management ADVANTAGES - Gets the best from the public and private sector - Contribute to improve society, providing infrastructure creating employment DISADVANTEGES - Very expensive projects with high risk. - Difficult to start up a PPP - High provability of discussion and disagreement in between the members Non-profit social enterprises: Type of organization that want to use up all the profit or chance of profit in social activities. NGO (Non-governmental organizations) - Wider social don’t only focus on poverty but also nature, environment. social writes, fitting against abortion. CHARITIES - Type of NGO with the objectives of fitting against poverty ADVANTAGES - They help people or causes in need - They improve society - They can be in innovative DISADVANTAGES - Sometimes they support and idea that not everyone accepts. - Sometimes funding can be irregular - Financial scandals in NGO people rob the money and run away with the money. - Sometimes the management is not the most efficient ( hard to look for people, not very high salaries – cannot hire the best employees) ORGANIZATION OBJECTIVES Need to communicate there identity there values an there sense of purpose To do this hey use the Vision and mission statements. ⁃ Everyone in the company know the mission objectives makes them more liable ⁃ Long term aspirational inspirational Vission – forward looking aspirational and inspirational for the company, showing their values. Where the business wants to be at in the future. It inspires and motivates the employees. It never changes. If you follow the ethical objectives, you trat well the employees… The people are happier and they produce more. The impact of ethical objectives the effects may be on: Business itself, competitors, suppliers, customers, the local community. Difference with corporate social responsibility (CSR): - What makes business be a good citizen to operate in the best way, protect society… CSR is something natural, the philosophy [you as a human being (you wouldn’t kill another one)] DISADVANTAGES - More expensive - People can think that you are discriminating. - You can be questionee. - People might think its marketing. - SWOT ANALYSIS Positive Factors Negative Factors Internal Factors STRENGTHS WEAKNESSES Externa l Factors OPPORTUNITIES THREATS Positive factors – Are those that are good for the business, drive more income, help the business grow Negative factor – Those that stop us from gaining new customers CSR Enviroment vir t Charity rity Great place to work r t l c t rk Health lt Women Education c ti Strengths - British + international (IB) - New building + future infrastructure. - Catholic values - Close family (teachers pupils and families) Weaknesses - New (Only 2 gradated yrs) - Only girls - Still developing – needs finance - Difficult access - Expensive Opportunities - Increased demand in international universities - Increased demand in IB - Increased demand in IT schools Threat - Lot of competition with IB schools - Downturn in Economy - Growing competition - Decreasing birth rate - Defusing = we focuse on things that we do well to get ride of the threats - Defend = defend your self Tips to distinguish internal and external External - Competition - Demand - Economy - Politics / Laws Internal - Earnings - Employees - Price - Fast distribution S W O Grow Reorientate T Defusing Defend ANSOFF MATRIX Existing product New product Existing Market Market Penetration Product Development New Market Market Development Diversification Existing Market = Market that you already know. Helps as identify Market penetration = maintaining you safe, digging in your own market. New logo, new image. Looking to promote customer loyalty ( Less risk ) Product Development = Coca-Cola creates Coca-Energy. Market development = Same product - new market. Selling jamon iberico. Mercedes, started selling the Mercedes Ban not only to business but also families – same product but different customers. - Increase your sales Diversification = New market, new product (Zara Home). More risky Zara = (Beauty = Product development, same store, same customers) (Home = diversification) STAKEHOLDERS Individuals or groups that have direct interest in the business. Internal = they belong to the business - Employees. They are interested in the business because if they business is going well, they fell more secure, they can ask for a bonus, salary raise. - Owners = because they don’t want to lose the money that they have invested. They need to know if they need to invest more money or take it away. - CEO = Chief executive Officer. They are examined depending. - Managers = They interested in the benefits External Fixed costs: 1000 € Avc: [1000 + (50 x 20)]= 40€ Variable costs: 20€/persona Average variable cost: [1000 + (20 x 20)] / 20= 70 € 3.Ahora hay 60 pasajeros. Fc: 2000€ Vc: 20€/passemger Avc: 53€ (diseconomy of scale) Why a business wants to grow? - To increase market share. - The bigger you are the more chances of survival - They lower there average cost - You can take more risk Certain company’s what to maintain - Maintain a close relationship with the customer. - Exclusivity - Status - Grater motivation: When you are un employee in a small company you can make a difference - Grater Cache: more exclusive - Less competition Differences between external and internal grow. Internal growth= happens because of the company own performance, increase customers, launch new products (same as organic growth). External growth = arrange a relationship with another company. - Types of external growth. o M + A = merges and Acquisitions (Takeovers)  Quick  Cultural clashes - Horizontal - Vertical back + forward o Joint ventures = 2 or more companies joint to create a new company.  They are independent.  Joint because a certain purpose/ goal/ project.  During a certain period of time - Ex. When business want to enter the Chinese market (they join a Chinese company) to create a Joint venture. - Rail roads built.  Advantages - They get the best of each company. - After the project the company both companies receive the experience that they have gain. - Cultural clash  Negative - Profits are share ⁃ Cultural sock ⁃ Legal requirements, negotiation is difficult o Strategic alliances = 2 or more business collaborate looking for a common benefit.  There are not any new companies.  Not any new companies formed.  Long term agreement  Extragenic alliance  Positive - no new companies are created - fluid = impact comes soon  Negative - No legal existent - Private contract so there is no legal existent of these alliance problems can let to difficult resolutions - No economics of scale - Less stable o Franchise = is a way to growing externally  Way of growing quickly  Employers are local people; they know the market.  Grow with the loyalty of the locals. ⁃ Franchisor = originally developed the idea ore the product. Give: Provides the stock The feedings the processes The furniture, the concept of the service The uniform Receive: Fee = One time payment (yearly, monthly) the ride to have the Royalties = % of the revenues Staff training. GLOBAL ADVERTAISING ⁃ Franchisee = Buys the write to sell the product. (ex. Marco Aldani) Employ staff, set salaries They do promotion Pay the employees Local promotion, only sell the product from the franchiser Globalisation = When regional economies become one integrated global economy. Impact of globalisation  Increased competition  Business look for a unique selling point = USP (What makes you different from others). Advantages: - Fast way of expanding - No liability - They take advantages of the franchise with the Disadvantages: - Lose control over the process of delivering, running of the business. - Problems or error from a franchise can affect a franchisor. Advantages: - Product already exists - Set up cost are low - The format of selling is giving and you have supply guarantee - The franchisor provides you with legal help Disadvantages: - Limited liability ( if the busines goes wrong the franchisor is not paying for the errors) - Has not control over what to sell - Global desitions