pBusiness in class notes 1 8 15 Adam Smith Wealth of Nations self interest invisible hand free market requirements Settle on product distribution and prices that benefit the consumer producer and all members of the community Markets Creating wealth and making transactions Market definition a group of people who have similar needs similar buying characteristics and the ability to purchase Markets are Socialized the degree to which activities are broadly or narrowly defined Complex a complex set of activities by many entities to get the product to the consumer Uncertain markets are not easily predictable Risky the chance of something going wrong Consumers will make an exchange or transaction only when they are made better off wealth As part of these exchanges or transactions competition between suppliers results in Pressure for lower prices Pressure for new better products Pressure for more efficient ways to do things To manage the economic part of your life including wealth You have to understand How the system works basic principles And be an informed Citizen Consumer Employee Business Owner Management Process To deal with uncertainty and risk in complex and specialized competitive markets Managers perform four functions Planning Organizing Leading Directing operating Controlling Planning Definition The process of defining intended future courses of action aimed at achieving specific goals or higher level objectives within a specific timeframe Planning involves Assessing future conditions and circumstances Setting goals based on that assessment Making decisions Work to be done By whom When Resources requirements Planning from top to bottom 3 5 years Sr Managers strategic 1 3 years middle managers tactical 6 mo 1 year 1st line managers operational Planning starts at the top Strategic plans Define the markets products necessary to realize the company s vision and objectives relative to competitors Purpose statement A statement regarding the purpose of the organization aka vision statement Strategical Objectives Higher level statements of how the vision prupose will be realized flows from the purpose statement Tactical Plans Specify how a company will use resources budgets and people to accomplish goals related to its strategic objectives Goals Specific statements of what will be done in what timeframe to achieve a specific end result flows from higher level objectives Operational plans Day to day plans from producing and delivering products and services Actions Who what when and how the goals will be accomplished Organizing Process and Structure Organizational Process The collection of activities that transform inputs into outputs that costumers value Organizational Structure The vertical and horizontal configuration of departments authority and jobs within a company Leading Directing Operating Leading Directing Communicating a vision Inspiring motivating Point out prescribe a course of action Controlling Regulating the work of those for whom a manger is responsible including Setting standards of performance Monitoring ongoing real time performance toward goal achievement Taking corrective action when needed Business functions primary Research and development Design products services that meet costumers needs Market sales Know your customers determine how to best serve them and get them the product Productions Build quality products at lowest possible cost Finance Arrange for the tools and money necessary to meet the goals of the company Accounting Track summarize and analyze a firm s financial position Asset accounting term Assets Items tangible or intangible that have value probable future economic benefits In an economic sense your knowledge skills and abilities are assets In your career you will take your knowledge skills and abilities to the market that is specialized complex and uncertain and hope to trade no them