1
Objectives 1. To identify the types of businesses. 2. To identify departments within businesses. 3. To describe the activities each department is responsible for overseeing. 2
Main Menu» Types of Businesses» Human Resources & Management» Finance & Accounting» Marketing, Production & Distribution 3
Types of Businesses 4
Types of Businesses» Are classified by the work activities performed» Include: producers processors manufacturers intermediaries service firms non-profit organizations 5
Producers» Develop products for distribution from raw goods raw goods materials derived from natural resources» Examples include: farming forestry mining 6
Processors» Change raw goods into a more finished form» Produce processed goods» Examples include: cotton mills oil refineries textile mills food processors 7
Manufacturers» Change raw or processed goods into finished goods» Examples include: juice factories clothing factories automobile factories 8
Intermediaries» Are referred to as the middleman» Move finished goods from one business to another» Buy, store and resell goods» Examples include: wholesalers buy finished goods from manufacturers in large quantities and sell them to businesses in smaller quantities retailers buy finished goods from manufacturers or wholesalers and sell them directly to the consumer 9
Service Firms» Provide services to consumers and other businesses» Examples include: beauty salons landscaping companies plumbing companies 10
Non-profit Organizations» Provide goods and services to businesses and individuals» Operate on donations, volunteers and philanthropists rather than income/profit» Examples include: Salvation Army United Way of America American Red Cross YMCA and YWCA 11
Business Departments» Human Resources» Management» Finance and Accounting» Marketing» Production and Distribution 12
Human Resources & Management 13
Human Resources» Requires following laws and proper procedures» Requires people with strong human relation and communication skills» Responsibilities include: maintaining the employment process training and developing staff 14
Employment Process» Is carried out by human resources» Goal: to obtain qualified employees who are wellmatched to the open position» Steps: 1. assess employment needs 2. recruit potential employees 3. select employee who fulfills goals 4. help employee get oriented 15
Employment Process» Step one: assess employment needs determine what openings in the company need to be filled analyze what the open position involves obtain or write job description, including: qualifications duties responsibilities 16
Employment Process» Step two: recruit potential employees look within the company first contact and utilize the following: newspaper and/or Internet advertising colleges, universities, and technical or vocational schools applications on file employment agencies and/or labor and professional organizations 17
Employment Process» Step three: select employee who fulfills goals review applications, resumes and cover letters of applicants choose applicants appearing to best match company opening and conduct interviews if there is not an appropriate applicant, start again at recruiting potential employees review all obtained information and select best applicant 18
Employment Process» Step four: help employee get oriented introduce to coworkers help fill out new employee paperwork answer questions about company pay, benefits, policies, etc. assist during adjustment phase 19
Training & Developing» Is also performed by human resources» Goal: maintain well-trained, qualified employees» Is accomplished through: training evaluating performance focusing on motivation and cooperation 20
Training» Can be done individually or in groups» Includes the following techniques: on-the-job training companies train employees while they work employees have hands-on practice with supervision occurs typically on an individual basis group training companies teach new skills to several employees at once employees listen and learn from each other employees get the opportunity to express ideas and share experiences 21
Evaluating Performance» Is often achieved through performance appraisals managers evaluate employee performance managers provide feedback to employees» Helps when making decisions, including: transfers layoffs promotions terminations 22
Focusing on Motivation» Can help meet employees needs» Includes two types: extrinsic motivation through outside sources for example: money, benefits, recognition intrinsic motivation occurring internally for example: challenge, enjoyment, accomplishment What motivates you to do well in school or hobbies? Are they extrinsic or intrinsic motivators? 23
Motivation» Can be ensured by meeting employees needs, including: hierarchy of needs proposed by Abraham Maslow: Self-Actualization Self-Esteem Belonging & Love Safety realizing full potential feeling skilled, useful, etc. feeling accepted, loved, etc. physical & emotional Basic Needs food, shelter, etc. 24
Focusing on Cooperation» Improves the output produced by working together in groups» Is needed to ensure high work quality and employee job satisfaction» Requires effective communication in order to: enhance group dynamics ensure employees know and understand their roles encourage employees to contribute ideas 25
Management» Is the process of reaching a company s goals and objectives by utilizing its resources» Has these four main functions: planning organizing directing controlling 26
Planning» Is management s first main function» Means determining a direction for the company» Includes the following: setting long- and short-term goals determining strategies to utilize company resources creating a written plan 27
Organizing» Is management s second main function» Means obtaining and coordinating resources to meet company goals and objectives» Includes the following: creating structure dividing up the workload arranging resources coordinating activities 28
Directing» Is the third main function of management» Is leading employees to carry out their assigned tasks» Includes the following: staffing motivating influencing guiding 29
Controlling» Is management s fourth main function» Is ensuring results meet expected goals and objectives» Includes the following: evaluating employee performance solving problems setting standards for desired performance 30
Management» Is most effective when all four functions play an important role» Is responsible for making sure the company runs smoothly» Must remember to evaluate progress regularly and provide feedback to the appropriate personnel 31
Finance & Accounting 32
Finance & Accounting» Are vital because a business cannot exist without cash flow» Focus on the following: creating up-to-date, accurate financial statements making a plan to create profits managing and utilizing company resources 33
Accounting» Is a system used to record, classify, summarize and report the financial position of a business» Responsibilities include: recording financial transactions creating financial statements 34
Financial Transactions» Are financial entries affecting the financial position of a business» Include these classifications: assets items of value owned by a business examples include: cash, land, buildings, equipment liabilities debts or obligations of a business examples include: credit, mortgage payments owner s equity amount of capital invested by owners total value of assets minus liabilities 35
Financial Transactions» Include the accounting equation: assets = liabilities + owner s equity (both sides of the equation must balance)» Are recorded, classified and summarized, providing information used to create financial statements 36
Financial Statements» Are the reporting process of accounting» Are used to make financial decisions» Include two main types: balance sheet reports totals in asset, liability and owner s equity accounts income statement reports net income or net loss of a company net income when revenue is greater than expenses net loss when expenses are greater than revenue 37
Financial Statements Balance Sheet Example Kay s Kloth Shop Balance sheet Assets Cash in bank $4,000.00 Cloth $8,000.00 Supplies $2,000.00 Total assets $14,000.00 Liabilities Accounts payable $ 4,000.00 Owner s Equity Capital from Kay $10,000.00 Total liabilities and owner s equity $14,000.00 38
Financial Statements Income Statement Example Kay s Kloth Shop Income Statement Revenue: Cloth Sales $6,000.00 Expenses: Advertising $100.00 Utilities $300.00 Rent $600.00 Payroll $3,000.00 Total expenses $4,000.00 Net Income: $2,000.00 39
Finance» Goal: determine use of company resources and funds» Responsibilities include the following: managing use of company funds obtained needed funds creating a financial plan 40
Finance» Funds are used to do the following: buy resources used to create goods and services pay expenses required for operation» When available, excess funds can be used in many ways including: purchasing assets to help the company grow paying unexpected or high expenses investing to obtain profit 41
Finance» Sources of funding include: borrowing funds selling stock looking for new investors increasing owner contributions» The financial plan does the following: specifies what funds are needed documents period funds are needed is crucial to the success of a business 42
Marketing, Production & Distribution 43
Marketing» Goal: to create products meeting consumer wants and needs based on the marketing mix to guide products through the product life cycle, capitalizing on opportunities in each stage to understand consumers through marketing research 44
The Marketing Mix» Consists of four interrelated marketing strategies used to meet consumer needs 1. Product is a good and/or service designed to meet consumer wants and needs is determined by conducting studies and surveys 2. Price must be low enough to attract consumers must be high enough to cover costs and create profit 3. Promotion activities to persuade consumers they need the product includes packaging, commercials, trials, etc. 4. Place is a location where products and/or services are sold includes stores and location within a store 45
Product Life Cycle Stage 1 Introduction Stage 2 Growth Stage 4 Decline Stage 3 Maturity 46
Understanding Consumers» Means understanding the needs they attempt to meet when making purchases, including: physical for necessities, safety, security and health includes food, clothing, transportation, etc. social to feel loved and accepted includes fancy clothing, make-up, cologne, etc. psychological for prestige and approval includes luxury items which make the consumer feel important Remember Maslow s hierarchy of needs pyramid? These apply for consumers too. 47
Production & Distribution» Goal: to produce and distribute goods and services in the most efficient and cost-effective manner» Consists of three roles: 1. facilities physical elements needed for production need a good layout and location 2. processing changing or combining resources to create a product or service adds value by transforming resources into products 3. people invaluable human resource plan, operate and supervise the process 48
Production» Must be effective and efficient by doing the following: forecasting demand scheduling production of goods and services managing inventory controlling quality 49
Distribution» Is getting produced goods and services to consumers in a timely manner» Is typically from producers to wholesalers and retailers» Uses the following four modes of transportation: waterways railroads trucks airlines 50
Acknowledgements MMXIV CEV Multimedia, Ltd. 51