Questions

Have you ever made

something?
What did you make?
What were some things that
you needed to make it?
CAPTIAL, HUMAN, AND
NATURAL
RESOURCES
Productive resources: are the
natural resources, human
resource, and capital resources
used to make goods and services.
Shirley Wilborne 4
 Natural Resources
Land…”gifts of nature”
Present in the Earth
Think about the Lemonade
What are some examples of natural resources used to
produce other goods and services?
What is the primary natural resource used in
producing gasoline?
What are some natural resources used in producing
vegetables?
What are some natural resources used in school?
Pictures
 Human Resources
All of the people who produce the goods and services that
people consume are called Human Resources.
What human resources were used when you make
lemonade?
What are some examples of human resources used to
produce other goods and services?
What do we call the human resource that bake
bread?
What kind of resources are the farmers who grow
vegetables?
What are some human resources used at school?
Pictures
 Capital Resources
Tools, equipment, and buildings used to make goods and
services.
Every good used over and over again to make goods and
services is called capital resources.
What were some capital resources used to make
lemonade?
What are some examples of capital resources used to
produce other goods and services?
What are some capital resources used in baking a
cake?
What are some capital resources used at school?
Pictures
STAKEHOLDER
S
DEFINITION OF STAKEHOLDERS
• An individual or group with an interest in an
organization.

• Any individual or group who can affect or are

affected by the achievement of a firms
objective.
 The Importance of Stakeholders
• Long-Term Relationships
• When a company has a long-term relationship
with its stakeholders, it runs more efficiently and
can have a better chance of producing profits.

• Feedback and Product Development

• Stakeholders can provide feedback during the
entire product development process, which can
positively influence the product's and/or the
company's success. In turn, a company can earn
continued and new stakeholder loyalty.
Cont…
• A Sense of Community
• A sense of community among stakeholders can
positively shape the organizational development
within a company and increase consumer sales.

• Considerations
• Acting upon stakeholder criticism can actually
give a company a competitive edge, and help the
company determine the stakeholders who hold
the most value for it.
STAKEHOLDERS IN BUSINESS
• Stakeholders in a business are any entity that
is effected by the operations of that business
in some way. The most obvious stakeholders
are employees, owners, and customers. Other
stakeholders are indirect stakeholders such as
competitors, the neighborhood the business is
in, the government, and the environment.
Role of Stakeholders in Business
• Voting and Decision-making
• Stakeholders may be responsible for voting on
significant changes in the business. Voting can
take place annually based on the corporate
structure of the business or during any meeting.

• Management
• Stakeholders can hold significant management
positions where they may report directly to the
president, CEO or chief financial officer.
Cont…
• Investing
• Stakeholders are responsible for reviewing the financial
data of the company to ensure that the business is
performing well and that they are not losing their
investment.

• Social and Environmental Responsibilities

• Stakeholders must continuously ensure that decisions
they are making for the business are doing little to
harm society and the environment. They may choose
to use an alternate resource if they realize that current
resources are becoming scarce.
Stakeholders can be classified as:
 A. INTERNAL STAKEHOLDERS
(Directly Involve With Business)

1. DIRECTORS

Director refers to a rank in management. A

director is a person who leads, or supervises a
certain area of a company, a program, or a
project.
Directors look for:
• Salary

• Share Option

• Job Satisfaction

• Status

• Bonuses & Perks

INTERNAL STAKEHOLDERS
2. MANAGERS

A Manager is a person who drives the work of

others in order to run a business efficiently
and make a large profit.
Managers look for:

• Bonuses

• Profit Maximization

• Pleasing
Shareholders

• Growing the business

INTERNAL STAKEHOLDERS
3. EMPLOYEES

An Employee contributes labor and expertise

to an endeavor of an employer and is usually
hired to perform specific duties which are
packaged into a job.
Employee look for:
• High pay
• Job security
• Good working conditions
• Fair treatment
• Fringe benefits
• Health and safety
• Promotion prospects
• Training opportunities
 B. CONNECTED STAKEHOLDERS
(Related to business core marketing and economic functions )

1. SHAREHOLDERS

A shareholder or stockholder is an individual

or institution (including a corporation) that
legally owns a share of stock in
a public or private corporation.
Shareholders look for:
• High profit
• High dividend
• Long term growth
• Prospect of capital gain
• A say in the business
• A positive corporate image
• Preferential treatment as customers
CONNECTED STAKEHOLDERS
2. CUSTOMER

A customer (also known as a client, buyer,

or purchaser) is the recipient of
a good, service, product, or idea, obtained
from a seller, vendor, or supplier for a
monetary or other valuable consideration
Customer look for:
• Low prices
• Value for money
• High quality products
• Good services
• Innovation
• Certain and regular supply
• Clear and accurate information
CONNECTED STAKEHOLDER
3. SUPPLIERS

A party that supplies goods or services. A

supplier may be distinguished from a
contractor or subcontractor, who commonly
adds specialized input to deliverables. Also
called vendor.
Supplier look for:
• A long term relationship with the firm
• Large size and value of contracts
• Frequent and regular orders
• Prompt payment
• Fair prices
• Growth of the firm leading to more orders
CONNECTED STAKEHOLDERS
4. ADVISERS

An Advisers is normally a person with more

and deeper knowledge in a specific area i.e. a
specialist.
Advisers look for:
• Profit maximization

• Returns on money invested

• Repayment of loans
CONNECTED STAKEHOLDERS
5. CONSULTANTS

A Consultant is usually an expert or a

professional in a specific field and has a wide
knowledge of the subject matter.
Consultants look for:
• Wide knowledge of the subject matter

• Medical sphere ( for a grade doctors )

• Improvements in organization strategy

• People management

• Improvement of operational processes

CONNECTED STAKEHOLDERS
6. COMPETITIOR

Any person or entity which is a rival against

another. In business, a company in the same
industry or a similar industry which offers a
similar product or service.
Competitor look for:
• To compete by all lawful means

• To differentiate its product from those of

other businesses

• Keeping up with innovation

• Avoiding anti-competitive practices

 C. EXTERNAL STAKEHOLDERS
(Not directly involve with business but have an Interest )

1. GOVERNMENT

A Government is the system by which

a state or community is governed.
Government normally consists
of legislators, administrators, and
arbitrators.
Government look for:
• Compliance with laws and regulation
• Efficient use of resources
• Employment
• Contribution to National Economy
• Payment of taxes
• To control the business operation
• To assist business
EXTERNAL STAKEHOLDER
2. LOCAL COMMUNITY

A Local Community is a group of interacting

people sharing an environment. In human
communities, intent, belief, resources,
preferences, needs, risks, and a number of
other conditions may be present and
common, affecting the identity of the
participants and their degree of cohesiveness.
Local Community look for:
• Employment prospects
• Sage guarding the environment
• Acceptance of social responsibility
• Road building
• Pollution control
• Safety
• House values
EXTERNAL STAKEHOLDERS
3. PRESSURE GROUPS

Pressure Groups are organizations that

want to influence the government to act in
certain way. For example:
• PETA (People for the Ethical Treatment
of Animals)
• GREENPEACE
Pressure Groups look for:
• Interest of members

• Trade union

• Peace

• Save animals

• Clean environment
EXTERNAL STAKEHOLDERS
4. MEDIA

Communication channels through which

news, entertainment, education, data, or
promotional messages are
disseminated.
Media look for:
• Keep the public informed on all issues
• Monitor the company
• Support freedom of expression
• Independence and accessibility of the mass
media
• To combat harmful elements in the mass
media.
BUSINESS ENVIRONMENT
 Introduction to Business Environment

 Business environment consist of all those factors

that have a bearing on the business. The term
'business environment implies those external
forces, factors and institutions that are beyond
the control of individual business organizations and
their management and affect the business
enterprise.
TYPES OF ENVIRONMENT

On the basis of the extent of

intimacy with the firm , the
environmental factors may be
classified into different
types-
internal and external.
 INTERNAL ENVIRONMENT

The internal environment is the

environment that has a direct impact on
the business. Here there are some
internal factors which are generally
controllable because the company has
control over these factors. It can alter or
modify such factors as its personnel,
physical facilities, and organization and
functional means, like marketing, to suit
the environment.
A) VALUE SYSTEM
The value system of the founders and
those at the helm of affairs has
important bearing on the choice of
business, the mission and the
objectives of the organization,
business policies and practices.
B) MISSION,VISION AND
OBJECTIVES
 Visionmeans the ability to think
about the future with imagination
and wisdom. Mission is an important
factor in achieving the objectives of
the organization. The mission is the
medium through which the
objectives are achieved.
C) MANAGEMENT STRUCTURE AND NATURE

 The structure of the organization also

influences the business decisions. The
organizational structure like the
composition of board of directors ,
influences the decisions of business as
they are internal factors . The structure
and style of the organization may delay
a decision making or some other helps in
making quick decisions.
 EXTERNAL ENVIRONMENT

It refers to the environment that has

an indirect influence on the business.
The factors are uncontrollable by the
business. There are two types of
external environment:
Micro Environment
The micro environment is also known as the task
environment and operating environment because
the micro environmental forces have a direct
bearing on the operations of the firm.

a)Suppliers
An important force in the micro environment of a
company is the suppliers, i.e., those who supply the
inputs like raw materials and components to the
company.
b) Customer
The major task of a business is to create and
sustain customers. A business exists
only because of its customers.
c) Marketing Intermediaries
The marketing intermediaries include middlemen
such as agents and merchants that help the
company find customers or close sales with them.
d) financers
The financers are also important factors of
internal environment.
e) Public

Public can be said as any group that has

an actual or potential interest in or on an
organization’s ability to achieve its
interest. Public include media and
citizens.
MACRO ENVIRONMENT

Macro environment is also known as General

environment and remote environment.

Macro factors are generally more

uncontrollable than micro environment factors.

When the macro factors become

uncontrollable , the success of company
depends upon its adaptability to the
environment.
Economic Environment
Economic environment refers to the aggregate of the
nature of economic system of the country, business
cycles, the socio-economic infrastructure etc.

Social Environment
The social dimension or environment of a nation
determines the value system of the society which, in turn
affects the functioning of the business.
Sociological factors such as costs structure, customs
and conventions, mobility of labor etc. have far-
reaching impact on the business.
Political Environment
The political environment of a country is influenced
by the political organizations such as philosophy of
political parties, ideology of government or party in
power, nature and extent of bureaucracy influence
of primary groups etc.

Legal Environment
Legal environment includes flexibility and adaptability
of law and other legal rules governing the business. It
may include the exact rulings and decision of the
courts.
Technical Environment

The business in a country is greatly influenced

by the technological development. The
technology adopted by the industries
determines the type and quality of goods and
services to be produced and the type and
quality of plant and equipment to be used.
Key types of business decisions
The following are the main types of decisions every organization need to take:

1. Programmed and non-programmed decisions:

Programmed decisions are concerned with the problems of repetitive nature
or routine type matters. A standard procedure is followed for tackling such
problems. These decisions are taken generally by lower level managers.
Decisions of this type may pertain to e.g. purchase of raw material, granting
leave to an employee and supply of goods and implements to the employees,
etc.

Non-programmed decisions relate to difficult situations for which there is no

easy solution. These matters are very important for the organization. For
example, opening of a new branch of the organization or a large number of
employees absenting from the organization or introducing new product in the
market, etc., are the decisions which are normally taken at the higher level.
2. Routine and strategic decisions:

Routine decisions are related to the general functioning of the organization.

They do not require much evaluation and analysis and can be taken quickly.
Ample powers are delegated to lower ranks to take these decisions within the
broad policy structure of the organization.

Strategic decisions are important which affect objectives, organizational goals

and other important policy matters. These decisions usually involve huge
investments or funds. These are non-repetitive in nature and are taken after
careful analysis and evaluation of many alternatives. These decisions are
taken at the higher level of management.
3. Tactical (Policy) and operational decisions:

Decisions pertaining to various policy matters of the organization are policy

decisions. These are taken by the top management and have long term
impact on the functioning of the concern. For example, decisions regarding
location of plant, volume of production and channels of distribution (Tactical)
policies, etc. are policy decisions. Operating decisions relate to day-to-day
functioning or operations of business. Middle and lower level managers take
these decisions.
An example may be taken to distinguish these decisions. Decisions concerning
payment of bonus to employees are a policy decision. On the other hand if
bonus is to be given to the employees, calculation of bonus in respect of each
employee is an operating decision.
4. Organizational and personal decisions:

When an individual takes decision as an executive in the official capacity, it is

known as organizational decision. If decision is taken by the executive in the
personal capacity (thereby affecting his personal life), it is known as personal
decision.
Sometimes these decisions may affect functioning of the organization also.
For example, if an executive leaves the organization, it may affect the
organization. The authority of taking organizational decisions may be
delegated, whereas personal decisions cannot be delegated.
5. Major and minor decisions:

Another classification of decisions is major and minor. Decision pertaining to

purchase of new factory premises is a major decision. Major decisions are
taken by top management. Purchase of office stationery is a minor decision
which can be taken by office superintendent.

6. Individual and group decisions:

When the decision is taken by a single individual, it is known as individual
decision. Usually routine type decisions are taken by individuals within the
broad policy framework of the organization. Group decisions are taken by
group of individuals constituted in the form of a standing committee.
Generally very important and pertinent matters for the organization are
referred to this committee. The main aim in taking group decisions is the
involvement of maximum number of individuals in the process of decision­-
making.