BUS 1010D:INTRODUCTION TO BUSINESS

ORGANIZATIONS
• COURSE DESCRIPTION
 A basic course that introduces students to the nature of business organizations;an overview of the
interrelationships among the functions of the business firm and between the firm and its
environment with topics that include a study of managerial functions, forms of businesses, e-
commerce, business ethics and social responsibility.
• PURPOSE OF THE COURSE
• The course will enable and enhance learners’ capacities in formulation and development of
understanding of how businesses work.
• Link to the University Mission Outcomes
• The major university mission outcomes include higher order thinking, literacy, global understanding
and multicultural perspective, preparedness for a career, leadership and ethics, and community
service. This course BUS 1010 is designed to develop student’s managerial, leadership and
technological skills in business firm’s problem analysis, decision making and the understanding of
how business organizations operate within the various environments and sharpen analytical skills
through higher order thinking in a global and multicultural environment.
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
• Link to the Chandaria School of Business Outcomes
 The School of Business mission outcomes are linked to the university mission outcomes
and include global oriented, multidisciplinary, change oriented, experiential, initiative and
problem solving, team player, effective communication, preparedness for a career, and
transformational leadership. BUS 1010 course is designed to contribute to the
achievement of five major School’s mission outcomes including transformational
leadership and ethics, change oriented, team player, problem solving and effective
communication.
• Link to BUS 1010 Program Learning Outcomes
 The mission of the BUS 1010 program is to prepare undergraduates in the art and
science of managing and learning organizational change in a dynamic environment. The
course is designed specifically to contribute to the achievement of transformational
leadership, program outcomes by developing leadership and change management skills
necessary for transforming profit and not for profit organizations.
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
• COURSE LEARNING OUTCOMES
• At the end of this course,students should be able to:
• Describe the concept of a business organization.
• Distinguish the different business operating environments.
• Identify the different stakeholders in a business operating environment.
• Explain the different forms and structures of business organizations.
• Analyze the different characteristics of entrepreneurs.
• Demonstrate the importance of E-Commerce in a business organization.
• Explore the critical roles and functions of management in a business organization.
• Illustrate the critical roles played by different management functions like operations,human
resource,marketing and finance management.
• Examine the facilitating/support functions in a business organization.
• Point out the role of business organization ethics and social responsibility to its citizens.
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
• WEEK 1: Introduction to Business Organizations
• The objectives of this chapter are to introduce the student the concepts of business and
organizations. The major environments that affect business operations will also be
covered.
• Expected Learning Outcomes
 Define the concept of business as well as that of the organization.
 Distinguish between the internal and the external environments of business.
 Describe the external environments of business and discuss how these environments
affect the success or failure of any organization.
 Identify the different stakeholders that are part of the business environment.
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
• Specific Topics include:
 The nature of business organizations
 Definition of business.
 Definition of organization.
 Rationale for the existence of business organizations.
 The creation of value creation as a function.
 Introduction to the environment of business
 The internal environment of business
 The external environment of business
 General environment
 Task Environment
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
 Different Dimensions of the general environment
 The socio-cultural dimension
 The political-legal dimension
 The technological dimension
 The global dimension
 Constraints of viewing the business environment
 Stakeholders as part of the environment
 Primary stakeholders
 Secondary stakeholders
 BUS 1010D:INTRODUCTION TO BUSINESS
ORGANIZATIONS
• Recommended Reading :
• Ronald J. Ebert et al. (2013), Business Essentials, 9Th Edition, Person education Ltd,
USA. Pp 24-46.
• Appleby, Robert C. (1994) “Business and Its Environment” In Modern Business
Administration, 6th ed., Pitman Publishing pp. 37-67.
• Kibera, F.N. (1996) Introduction to Business: A Kenya Perspective, Nairobi: Kenya
Literature Bureau. Pp 42-66.

• Group Assignment One

• Identify, summarize and discuss arguments against the values business
organizations create for the society.
 Definition of a Business
• The simple definition of business, or business meaning, is explained as an organization
that provides goods and services to the community in exchange for money, with the goal
of becoming profitable. Businesses are focused on producing items or services to sell,
making a profit, and meeting a particular need for society. All individuals in a business
work together toward common goals, which are dependent on the type of business.
• A business can be described as an organization or enterprising entity that engages in
professional, commercial or industrial activities. There can be different types of
businesses depending on various factors. Some are for-profit, while some are non-profit.
Similarly, their ownership also makes them different from each other.
• Business refers to an enterprising entity or organization that carries out professional
activities. They can be commercial, industrial, or others. For-profit business entities do
business to earn a profit, while non-profit ones do it for a charitable mission. Business
ownership includes partnerships, sole proprietorships, corporations, etc
 Definition of an Organization
• Organization refers to a collection of people, who are involved in pursuing defined
objectives. It can be understood as a social system which comprises all formal human
relationships. The organization encompasses division of work among employees and
alignment of tasks towards the ultimate goal of the company. It can also be referred as
the second most important managerial function, that coordinates the work of employees,
procures resources and combines the two, in pursuance of company’s goals.
• Louis Allen, “Organization is the process of identifying and grouping work to be
performed, defining and delegating responsibility and authority and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives.”
• Koontz and O’Donnell, ‘The establishment of authority relationships with provision for
co-ordination between them, both vertically and horizontally in the enterprise structure.”
These authors view organization as a coordinating point among various persons in the
business.
 Definition of an Organization
• Spriegel, “In its broadest sense organisation refers to the relationship between the
various factors present in a given endeavor. Factory organisation concerns itself primarily
with the internal relationships within the factory such as responsibilities of personnel,
arrangement and grouping of machines and material control. From the standpoint of the
enterprise as a whole, organisation is the structural relationship between the various
factors in the enterprise”.
• Spriegel has given a wide definition of the organization. He has described it as the
relationship among persons, factors in the enterprise. All factors of production are
coordinated in order to achieve organisational objective
• L.H. Haney, “Organisation is a harmonious adjustment of specialised parts for
accomplishment of some common purpose or purposes”. Organisation is the adjustment
of various activities for the attainment of common goals.
 Why Business Organizations exist
1. Common goal – The main reason for the existence of an organization is to accomplish
some common goals. The structure of the organization is bound by a common
purpose.
2. Division of labour – The work needed to accomplish the goals is divided into a number
of functions and sub-functions. These, functions are organized in the form of
departments. Each department is headed by a specialist. Such a division of function on
specialty basis infuses specialisation.
3. Authority structure – There is an arrangement of positions into graded series. Such an
arrangement creates a series of superior and subordinate relationships called chain of
command. Authority and responsibility associated with various positions are defined.
 Why Business Organizations exist
4. Group – It is people who constitute the dynamic element of an organization. They work
in groups in the various departments of an organization.
5. Communication – There is free flow of communication through various official channels
among the people across various departments. Most of the communication is in a
written form. However, grapevine communication is also in vogue.
6. Coordination – The diverse efforts of various functional departments are integrated
towards the common objective through the process of coordination.
7. Environment – No organization is functioning in a vacuum. Social, political, economic
and legal factors exert influence on the environment. Beside it is influenced by internal
factors like materials, machines, level of technology, economic resources, human
resources, etc.
8. Rules and regulations – Every organization is governed by a set of rules and
regulations for the orderly functioning of people.
 Environment of a Business
• Business Environment
• We live in a dynamic environment that changes all the time. Businesses must
understand the changes in the environment and how these changes affect their
performance.
• The process of thinking strategically requires that managers understand how the
structure and competitive dynamics of their industry affect the performance and
profitability of their companies. Armed with an appreciation of the forces in their
industry that give rise to opportunities and threats, managers should be able to
make better strategic decisions. 
• “Business environment is an aggregate of all conditions, events and influences
that surround and affect it. It is broad and ever changing as its separate elements
interact. A single firm’s environment is narrow in scope than the total environment
of business. It is complicated and continuously changing.” —Professor Keith Davis.
 Environment of a Business
• “It is a set of those inputs to an organisation which are under the control of other
organisations or interest groups or are influenced by interaction of several groups, such
as economy” —Professor Paire and Anderson
• “Environment consists of all external and internal influence, the complex interaction of the
market, production and finance, the three basic components of our business world.” —Mr.
J.A. King and Mr. C.J. Duggan
• “An organisation’s external environment consists of those things outside an organisation
such as customers, government units, suppliers, financial firms and labour pools that are
relevant to an organisation’s operations.” —Professor Gerald Bell
• Therefore business environment is classified into two:
• Internal Business Environment
• External Business Environment
 Internal Business Environment
• https://youtu.be/sKQLHwlZdIg
• Internal Business Environment
• An organization's internal environment is composed of the elements within the
organization, including current employees, management, and especially corporate
culture, which defines employee behavior. Although some elements affect the
organization as a whole, others affect only the manager. A manager's philosophical or
leadership style directly impacts employees. Traditional managers give explicit
instructions to employees, while progressive managers empower employees to make
many of their own decisions. Changes in philosophy and/or leadership style are under the
control of the manager.
• Internal environment is a component of the business environment, which is composed of
various elements present inside the organization, that can affect or can be affected with,
the choices, activities and decisions of the organization. It encompasses the climate,
culture, machines/equipment, work and work processes, members, management and
management practices.
 Factors influencing the Internal Business
Environment
• The factors which are under the control of
the organization, but can influence
business strategy and other decisions are
termed as internal factors. It includes:
• 1.Value System: Value system consists
of all those components that are a part of
regulatory frameworks, such as culture,
climate, work processes, management
practices and norms of the organization.
The employees should perform the
activities within the purview of this
framework.
 Factors influencing the Internal Business
Environment
• 2.Vision, Mission and Objectives: The company’s vision describes its future position,
mission defines the company’s business and the reason for its existence and objectives
implies the ultimate aim of the company and the ways to reach those ends.
• 3.Organizational Structure: The structure of the organization determines the way in
which activities are directed in the organization so as to reach the ultimate goal. These
activities include the delegation of the task, coordination, the composition of the board of
directors, level of professionalism and supervision. It can be a matrix structure, functional
structure, divisional structure, bureaucratic structure, etc.
• 4.Corporate Culture: Corporate culture or otherwise called an organizational culture
refers to the values, beliefs and behaviour of the organization that ascertains the way in
which employees and management communicate and manage the external affairs.
• 5.Human Resources: Human resource is the most valuable asset of the organization, as
the success or failure of an organization highly depends on the human resources of the
organization.
 Factors influencing the Internal Business
Environment
• 6.Physical Resources and Technological Capabilities: Physical resources refers to
the tangible assets of the organization that play an important role in ascertaining the
competitive capability of the company. Further, technological capabilities imply the
technical know-how of the organization.
• Internal environmental factors have a direct impact on a firm. Further, these factors can
be altered as per the needs and situation, so as to adapt accordingly in the dynamic
business environment.
 External Business Environment
• The external environment consists of those factors that affect a firm from outside its
organisational boundaries.
• External environment factors are elements that exist outside of a company's internal
environment that can affect a company's operations. These outside forces can help the
business or present challenges to its current processes. Managers often keep track of
external environment factors so they can recognize and resolve the issues the factors
cause and make appropriate changes.
• External environment factors are important because they can cause direct and indirect
effects on business operations, personnel and revenue. The external environment of a
company changes constantly in ways beyond the company's control, but executives and
managers can track these changes and minimize their consequences. Choosing to
monitor the dynamic nature of external environment factors allows businesses to protect
themselves against predictable events and mitigate the effects of unexpected changes.
 Types of External Business Environments
• Some of the ten types of external environmental factors are as follows;
1 Political Factors
• Every new political party comes to the government with its new policies and gets rid of old
policies, and their change in policies would impact relevant businesses and companies.
With the inconsistencies in the political environment of the country, businesses and
companies have to pay heed to the legislation and the upcoming bills in order to prepare
themselves for the potential changes. Some of the policies that could influence the
business are as follows; Intellect Property Rights,Import Restrictions,Competition
Regulations,Employment Laws,Tariffs& Taxation
• The political regulations have a great impact on the company’s operations, and the
business has to comply with the new legislation in order to keep things going.
 Types of External Business Environments
• Economic Factors
• The economic factors play a significant role in terms of impacting our daily life to the growth of the
company. When the country’s economy is in recession, then the unemployment rate would be
higher. Companies have to work extra hard in order to retain their workforce and make changes in
order to maintain their revenue stream. If the company is in the business of manufacturing retail
products, then it has to decrease its prices to amplify the sale to maintain its profitability.
• Social Factors
• When people live together in a society, then their social status and personal choices would influence
their purchase decision in terms of what and where they should buy. While developing the
product/service, companies keep in mind various social factors because various social issues,
events, and movements impact their decision.
• For instance, a feminist organization that endorses the women’s cause and movement would earn
the trust and loyalty to the women’s customer market. When you’re targeting a specific segment of
the market, then you should keep in mind their preference and potential influences on them in
recent years. You can use such factors for your business growth and satisfy the needs of
customers.
 Types of External Business Environments
• Technological Factors
• Technological developments are making significant changes in every industry, and companies need
to adopt technology to gain a competitive edge in the market. For instance, a GPS manufacturing
company for the vehicle would have to face decreasing sales because of the integration of mobile
devices with GPS. But it can deal with this challenge by launching new integrated products.
• Healthcare companies should come up with the latest methods and techniques in terms of gathering
information from the patients. The patient record and care system should be in alignment.
• Legal Factors
• Legal factors comprise the law of the country impacting the company that how it should operate its
business and behavior of customers. Some of the main areas that fall under its category are the
viability of the certain product in certain markets, profit margin, and product transportation.
• When it comes to the sale of sharp objects, drugs, and others; the legal factors help you to decide
whether the company should offer it or not. Some main laws that fall under its category are as
follows; Import and Export Laws,The legality of Pyramid Scheme,Fraud Law,Employment
Law,Health and Safety Laws,Copyrights Laws,Discrimination Laws,Consumer Laws
 Types of External Business Environments
• Demographic Factors
• Many companies conduct a demographic analysis to evaluate their target market to make sure
whether it’s meeting their needs or not. It allows them to understand their target market and find
ways to serve customers better. The demographic could impact your business process and
decision. It comprises of following elements; Education level,Income,Occupation,Marital
Status,Belief System,Nationality,Race,Gender& Age
• Many telecom companies became operational in the 1990s, and their target market is young
professionals that are succeeding in their lives. Nowadays, people from various backgrounds all use
mobile devices daily. That’s why telecom companies have been modifying the products/services in
terms of features and using various marketing approaches to target them.
• Ethical Factors
• Different people have different concepts of morality and ethics, and it has become challenging for
companies to maintain a balance between staff expectation and their personal lives. It’s the
responsibility of the company’s sales staff to avoid such activities that would have a negative impact
on the company. The managers should address workplace ethical issues like harassment and
sharing the company’s confidential information and take disciplinary actions against them.
 Types of External Business Environments
• Natural Factors
• The customer market has cautious about the planet earth and the impact of businesses practices on
the natural environment. Some customers support such companies that promote eco-friendly
practices and products. The conscious choice of eco-friendly products has created a lot of
opportunities and challenges for businesses. The goal is to amplify revenue, retain customers, and
protect the environment.
• Global Factors
• If the company is launching its product in the international market, then it should keep in mind
various global and local issues. The company should keep on analyzing the economic status,
consumer trends, cultural norms, and social issues; and offer training to deal with such issues. It
allows them to develop such products that would meet their needs and requirements.
• Competitive Factors
• Companies could amplify their market share and profitability if they keep on tracking the market
trends and competitors. It would allow them to recognize the challenges and find ways to deal with
them in order to deal with loss.
 Constraints originating from the Business
environment
• Business activity is constrained (limited) by the environment in which the business
operates. There are a number of important components of this environment including:
• The actions of competitors.
• Legal requirements. e.g. what are legally expected.
• Social requirements and expectations. The sorts of expectations that society has of
businesses e.g. to operate in an ethical way.
• Economic constraints e.g. the amount of income that consumers generally have to spend.
• Technological constraints. Often what businesses are able to produce and sell and how
they operate is determined by the technologies available to them
• https://youtu.be/EK53DG6BRJ8 Business Environment
 Stakeholder of the Business
• A stakeholder is an individual or group that has a legitimate interest in a company,
organization, or business; the Stanford Research Institute defines stakeholders as “those
groups without whose support the organization would cease to exist. Stakeholders can
affect or be affected by the actions (or inactions) of a business, and they can exist both
within and outside of a business.
• The impact of a business on its stakeholders is a bit like the effect of dropping a
stone into a pond. The decisions and actions of the business have a ripple effect that can
extend beyond the pond and even reach those who are standing far away on the shore.
• A stakeholder is a single person, group, or organization involved in or affected by the
development and completion of a project. They have a vested interest in its outcome
because it will benefit them in a certain way—either financially or through career
advancement—and can impact its completion in many ways.
 Stakeholder of the Business
• A stakeholder’s primary role is to help a company meet its strategic objectives by
contributing their experience and perspective to a project. They can also provide
necessary materials and resources. Their support is crucial to a successful project.
According to stakeholder theory, if stakeholders don’t like the results, the project can
often be considered a failure, even if all goals were met.
 Types of Stakeholders

• There are two types of stakeholders in nearly all projects:

• 1. Internal stakeholders: An internal stakeholder is a person or group linked directly to
the company conducting the project. Internal stakeholders can include employees, who
are members of the project team that will see it to completion, a project manager,
resource manager, and line manager. Top company management, like the company
president, board of directors, and operating committees, and outside contributors, like
subcontractors and consultants, can also be considered internal stakeholders.
• 2. External stakeholders. An external stakeholder is an entity that is not directly
associated with the company involved in the project but is still impacted in some way by
its outcome. External stakeholders can include vendors, suppliers, creditors, project
customers, project testers, and a product user group.
Types of Stakeholders
 Types of Stakeholders
• There are many types of stakeholders in a business:
• .1. Customers: The customer is a primary stakeholder, which is an entity that is directly linked to
the company and its economic success. Business owners generally consider the customer to be the
most critical stakeholder because their buy-in allows the company to continue conducting business.
Companies exist primarily to serve the needs of a customer base and benefit directly from their
patronage.
• .2. Employees: Company employees are key stakeholders because they create the goods and
services issued by a company, and the quality of their work has a direct impact on customer
support. Employees, in turn, benefit financially from the company’s continued performance and
success. Strategic management of employees is crucial to a company’s welfare to maintain product
quality and employee confidence.
• .3. Governments: The government is a secondary stakeholder (meaning it is indirectly linked to the
company) through its collection of taxes from employees and the company through corporate taxes.
The government also benefits from the company’s success through its contribution to the gross
domestic product (GDP). Other secondary stakeholders include the media and business support
groups.
• .
 Types of Stakeholders
• 4. Investors and shareholders: Investors, shareholders, and stockholders are all types
of primary shareholders that keep companies financially viable and make projects
possible by providing funds. They can also directly impact a company’s outlook when
they are dissatisfied with its business plan or direction.
• .5. Local communities: The area in which a business is located is considered a
secondary stakeholder because it benefits from the company’s economic investment
through job creation. Locally-based employees can then invest their income back into the
community and improve its financial state.
• .6. Suppliers and vendors: Though suppliers and vendors exist outside of a company,
they are still considered primary stakeholders because they and the company they sell to
benefit directly from the revenue generated from sales and services. These providers
contribute resources, materials, and, in many cases, expertise that does not exist in-
house with companies, which can improve a company’s ability to meet customer and
shareholder needs.