UNIVERSITY OF ABUJA DEPARTMENT OF BUSINESS ADMINISTRATION FIRST

UNIVERSITY OF ABUJA DEPARTMENT OF BUSINESS ADMINISTRATION FIRST SEMESTER LECTURES, 2014/2015 SESSION Course Code: Bus 101 Course Title: Introduction to Business I Course Lecturer: Dr. Bello Ayuba, FCAI, MAOM, MAIB, MNIMN 18 th January, 2015

COURSE OUTLINE Introduction The course Introduction to Business I provides a comprehensive understanding of the basic concepts and theories of Business and its environment. It was designed to equip students with requisite strategic skills in managing a successful business. Topics to be covered include:

COURSE OUTLINE…………………. 1. The Nature and Scope of Business Definitions of Business Characteristics of Business Objectives Business Activities Contributions of Business to Economic Development

COURSE OUTLINE…………………. 2. Forms of Business Ownership: Factors to be Considered in Choosing Forms of Business Ownership Sole Proprietorship; Characteristics, Advantages and Disadvantages Partnership; Characteristics, Partnership Deed, Advantages and Disadvantages

Course Outline…………………. Forms of Business Ownership Continues…. . Corporation; Formation and Registration Process Characteristics, Advantages and Disadvantages Comparison Between Private Limited Liability and Public Limited Liability Companies, and Public Corporation

Course Outline…………………. 3. Business Environment: Meaning of Business Environment Interactions Between Organizations and Environments Internal Business Environment External Business Environment How Organizations Respond to its Environmental Forces.

COURSE OUTLINE…………………. 4. Corporate Social Responsibility and Business Ethics: Meaning of Corporate Social Responsibility Arguments for and Against Corporate Social Responsibility

Course Outline…………………. Social Responsibility Continues…. . Areas of Business Social Responsibilities; owners, employees, customers, government, society etc Meaning of Business Ethics Consumerism Unethical Business Practices and The Role of Consumer Protection Council

COURSE OUTLINE…………………. 5. Profit, Profitability and Profit Theories: Definitions of Profit Importance of Profit Types of Profit Theories

COURSE OUTLINE…………………. 6. Privatization and Commercialization Programme: Meaning and Concept of Privatization Commercialization Programme Objectives of Privatization and Commercialization policies Advantages and Disadvantages of Privatization and Commercialization policies. Recent New Economic Policies

Course Outline…………………. 7. Recommended Texts: Drucker Peter (1998), Managing Business, Prentice Hall, New York. Umar Adamu (2009), Introduction to Business, Shukrah Printers, Kaduna. Ricky W. Griffin and Ronald J. Ebert (2000), Business, Prentice Hall, New York.

DEFINITIONS OF BUSINESS According to Hooper (1970) the term business refers to the “whole complex field of Commerce and Industry, the basic industries, processing and manufacturing industries and the network of ancillary services, distribution, banking, insurance, transport and so on which serve and interpenetrate the world of business as a whole”.

Definitions of Business Continues…. . B. O Wheeler (1961) “Business is an institution organized and operated to provide goods and services under the incentive of private gain” Boone and Kurtz (1976) define business as “all profit-directed economic and commercial activities that provide goods and services necessary to a nation’s standard of living”.

Definitions of Business Continues…. . Business can also be defined as a “systematic production and or exchange of goods and services undertaken regularly with a view of satisfying human wants at a profit and that has an element of risk or uncertainty”.

Definitions of Business Continues…. . However according to Peter Drucker, Business cannot be defined or explained in terms of profit. He observes that when most businessmen are being asked, “What is business? ” they always answer that it is an organization that makes profit. Drucker agues that: to know what a business is, we have to start with its purpose. He points out that the purpose of any business must lie outside the business itself as he concludes that there is only one valid definition of business: to create customer.

CHARACTERISTICS OF BUSINESS Exchange: sale or transfer of goods and services Profit motive: Profit Maximization. Production: Dealings in goods and services such as bread, oil, shoes, etc or may be producer goods such as machinery and tools. Uncertainty and risk: Possibility of loss i. e. uncertainty of return on investment. Legality: Laws and Interpretations of laws. Continuity and Regularity. A Going Concern Customer creation and satisfaction: Utility, Value and Satisfaction.

BUSINESS ACTIVITIES Production of Goods or Services: Manufacturing, Extraction, Fabrication Synthesis etc. Marketing Activities: Product, Pricing, Promotion, Place Buying of Products and Services: The output of another business could be the input of another business organization. Recruitment and Training of Employees: A business organization must perform the activities of recruiting and training of its employees for efficiency.

Business Activities Continues……. Raising Of Funds: Every business needs funds; for each sources of funds, there is a cost involved to determine the source from which funds should be procured. Managerial Activities: This involves the planning, organizing, leading and controlling of business resources for the achievement of its goals and objectives. Accounting Activities: This involves stocktaking; preparation of balance sheet and budgets at the end of each year, credit decisions etc.

BUSINESS OBJECTIVES Business represents different things to different people. Each individual or group associated with business expects certain things from it, that is to say each has certain objectives in relation to the business. The owners have their objectives; the employees have their objective as well as the society in which the business wants to overcome e. g. making a certain return on investment in a year under review. It is the task of the business to determine what the specific wants of the people are, and fulfill those wants most effectively and efficiently.

Business Objectives Continues…… The main objectives of business are: Profit: strives to earn a reasonable profit Social Responsibility: being socially responsible to employees, owners, customers, environment etc Human Objective: entrepreneurship, knowledge, motivation technical knowledge, skills etc Organic Objective: These objectives emphasize business growth above every other consideration; The growth ambition can be made possible through plough-back or re-investing part of the profit into the business for growth and effective competition.

Business Objectives Continues…… Social Objective: provision of facilities for literary education and training for both the employees and the public in general. Provision of adequate and appropriate health care delivery services to the needy, as well as the control of all forms of pollutions (air, water, etc) caused by the business and protection and provision of aids to religious, social, cultural and charitable institutions. Productivity: Standard of production should be enhanced and made effective.

Business Objectives Continues…… Physical and Financial Resources: Clear objective should be established for utilization of physical facilities, material resources, and supply of capital. Example includes reducing long-term debt by seven million Naira over the next twelve months, maintaining office facilities, tools and equipment, and securing more dependable sources of fuel and power. Innovation: development of new products and services as well as continued improvement of the existing products and services.

Business Objectives Continues…… Market Standing: marketing performance, increasing market share to compete favourably Managerial Performance and Development: investigation of career development programmes for all management level employees, sponsoring inhouse training Programmes, continuing education programs etc. Workers Performance and Attitude: motivational incentives and evaluation of employee performance and attitudes to work

THE HUMAN ELEMENTS IN BUSINESS Owners: owners of the Business Managers: operators of the business enterprise Employees: These refer to a group of workers Consumers: Final Users of the product Suppliers: provide raw materials and services in order to have an uninterrupted flow of production. Distributors: They facilitate delivery of goods produced by the business enterprise. The Community: This consists of people and groups in the environment in which the business operates.

BUSINESS ENVIRONMENT Introduction Business is a human activity that occurs within a social framework, it involves a large number of people all of whom are part of the social order. Together with the physical world, the social order forms a total environment in which business must function consistently with the goals, convictions and aspirations of the society as a whole. The totality of interaction between business and the society is called business environment.

Business Environment Continues…. . Business makes demands on society, and society makes demands on business. The sum of these exchanges between business and the community make up what we know as the business environment. It composed of those forces that affect the performance of an organization over which it has little or no control. The term society refers to the social environment system whose members have cultural patterns and goals.

Business Environment Continues…. . The business environment consists of the Internal (micro) environment and External (macro) environment: The Micro – environment of an organization can best be understood as comprising all those other organizations and individuals who directly or indirectly affect the activities of the organization. It consists of conditions and forces within the business. They are within the reach of the management and are sometimes referred to as the controllable elements.

Business Environment Continues…. . Internal Elements: Owners or Shareholders Board of Directors Employees Organizational Culture Elements of the Marketing Mix

Business Environment Continues…… External Elements The Macro- environment comprises general trends and forces which may not immediately affect the relationships that a company has with its customers, suppliers and intermediaries, but sooner or later, will alter the nature of these relationships. This consists of everything outside an organization that might affect the business organization. The external environment of an organization can be subdivided into two namely, task and general.

Business Environment Continues…… The external environmental forces include the following: 1. Demographic Environment 2. Economic Environment 3. Socio-cultural Environment 4. Legal-Political Environment 5. Technological Environment 6. Competitive Environment 7. International Environment

Business Environment Continues…… The Tasks or Micro-Environment Because the impact of the general environment is often rather vague, most organizations focus more precisely on what is called the task environment. Though it is complex, the task environment provides useful information more readily than the general environment does. Tasks environment is composed of six (6) elements:

Business Environment Continues…… Elements of the Tasks Environment: Competitors Customers Suppliers Regulators Unions Owners.