WORK EXPERIENCE

Lecturer: Doan Thi Truc Quynh

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 CHAPTER 1
INTRODUCTION TO BUSINESS

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.1. What is an organization?

A charity

An army

A local charity

A trade union ORGANISATION?

A club

A class

An auditing firm

A multinational car manufacturer 3

 CHAPTER 1: INTRODUCTION TO BUSINESS

1.1. What is an organization?

Share experience and knowledge

Save time

More
Specialize the best productive
ORGANISATION
Overcome limitations

Pool expertise

Synergy
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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.1. What is an organization?

Definition: A social arrangement for the controlled performance of

collective goals, which has a boundary separating it from its environment

1. A social arrangement: individuals gathered together for a purpose

2. Controlled performance: performance is monitored and adjusted to

achieve goals

3. Collective goals: goals over and above the goals of individuals

4. Boundary: the organization is distinct from its environment

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.1. What is an organization?

Ownership Public and Private

Control By owners and Government

Industry Car, Book, Services, etc.

Orientation Profit and Non-profit

Classification
Size Small, Medium and Large

Legal status Incorporated and Unincorporated

Sources of Borrowings, Government funding,

finance Shares
Technology High and Low
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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.1. What is an organization?

What does organizations do?

Manufacturer Money – Materials – Production – Goods - Money

Trading Money - Goods - Money

Finance Money - Money

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.2. What is a business?

An organization that is oriented towards making a profit for its owners so

as to maximize their wealth
and that can be regarded as an entity separate from its owners

Primary
Profit
objective

Legal
structures A sold trader, a partnership, a company

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.3. Stakeholders in the business

A person or group of persons who has a stake in the organization.

Primary Protect Secondary

Customers, suppliers,
Shareholders, partners, Who employees, creditors,
proprietor employees, governments,
analysts, community, etc.

Stake Money lent, careers, taxes,

Money invested
reputations, etc.

Return on investment Benefits Repayment, salaries, etc.

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.4. What are the business’s objectives

Primary objective
Profit maximization to increase shareholders’ wealth

Profit is measured by how a business creates value

Balance between profits and risks

Comply laws and regulations, has social responsibilities

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.4. What are the business’s objectives

Profit maximization is always the primary objective?

1. Companies are run by non-shareholding managers => W or R?

2. Manager have no personal interest in the creation of wealth => W or R?

3. The market may lack competitive pressure to minimize costs and

maximize revenues => W or R?

Conclusions?
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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.4. What are the business’s objectives

Wealth maximization?

Impact of managerial A satisfactory profit, balance risks and returns,

objectives enough profits for future growth

Increase market share, ensure survival,

Revenue maximization discourage competition, enhance prestige

8 key areas: market standing, innovation,

productivity, physical and financial resources,
Multiple objectives
profitability, manager performance and
development, worker performance and
attitude, corporate responsibility

Staff relations, customer satisfaction, regulation

Constraint theory
compliance, etc. 12
 CHAPTER 1: INTRODUCTION TO BUSINESS

1.5. Mission, goals, plans and standards

Planning and control system

1. Set out objectives

Deviations No action
2. Plans and standards identified required
Action

3. Actual performance Comparison

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.5. Mission, goals, plans and standards

Mission: The overall direction of a business

The business’s basic function in society’ expressed in terms of
how it satisfies its various stakeholder

Why does the organization exist and for whose

Purpose
benefit?

Strategy What is the operational logic of the organization?

Policies and What do our people actually do and how do they

standards of behave?
behaviour

What are core principles? What does the

Values
organization believe to be important?
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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.5. Mission, goals, plans and standards

Mission of a hospital
Save lives

Purpose Save lives, help people to be healthier

Strategy Structure, staff, process, care system, etc.

Policies and
standards of Code of ethics, medical staff policies, etc.
behaviour

Values Ethics, customers, innovation, responsibilities,

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 CHAPTER 1: INTRODUCTION TO BUSINESS

1.5. Mission, goals, plans and standards

Vision
Determine what its mission should be

Based on its mission

A future state of the industry or business

Vision of a hospital
Being the leading provider of healthcare service by 2030

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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.5. Mission, goals, plans and standards
Goals: Aims and Objectives
A desired end result

Operational objectives Non-operational aims

(Quantitative goals) (Qualitative goals)

Characteristics (SMART) Characteristics

. Specific
Unspecific
. Measurable
Hard to measure and quantify
. Achievable
Flexibility
. Relevant
. Time-bound

Ex: Reduce cost on lighting by 5% Ex: Cut costs

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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.5. Mission, goals, plans and standards

The purpose of setting operational objectives

Set out what needs to be achieved Implement

Direct managers and staff Publicize

Assess the validity of decisions Appraise

Assess and control actual performance Targets to achieve

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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.5. Mission, goals, plans and standards

Plans and standards

. Plans state what should be done to achieve the operational objectives
. Standards and targets specify a desired level of performance

Physical standards Units of material per unit produced (Ex: 3kg/unit)

Cost standards Standard material cost per unit (Ex: $60/unit)

Quality standards Customer satisfaction

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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.6. Sustainability and climate change

Organizations' activities

Positive effects Negative effects

. Jobs . Climate changes
. Goods and services . Social effects (drugs)
. Taxes, etc. . Economic issues, etc.

Present
and Future development

Consider sustainability
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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.6. Sustainability and climate change

. Sustainability: The ability to meet the needs of the present without

compromising the ability of future generations to meet their own needs
. Sustainability development: Aims to ensure that the economic activity
can continue without causing permanent harm to society and the planet. It
describes a world of thriving economies and just societies based on what
nature can afford
BALANCE
Social Environmental
Economic sustainability
sustainability sustainability

Meet the needs of a wider group of Do not harm the nature or the Provide a return to its stakeholders
stakeholders and society biodiversity of the planet over the long term
Fair treatment, Ethics Climate change Returns
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 CHAPTER 1: INTRODUCTION TO BUSINESS
1.6. Sustainability and climate change

BALANCE

Triple bottom line 22

 CHAPTER 1: INTRODUCTION TO BUSINESS
1.6. Sustainability and climate change

Sustainability and business

Business -> Environment Environment -> Business

. CO2 emissions . Extreme weather

. Non-sustainable materials . Regulatory environment
. Fossil fuels change
. Petrol and diesel vehicles . Reputational damage
. Landfill sites

Actions 4R
Reduce, Reuse, Recycle, Replace
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Q&A

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