TITLE: BUSI 101-INTRODUCTION TO BUSINESS
Introduction
Business refers to an activity or operation that involves the sale, purchase and or
generation of profit from the provision of services or goods. They could be limited liability
companies, or incorporated businesses that are in operation with the desire of making profits.
They could be non-profits created to realize social causes or for charity purposes. The primary
objective of most organizations is to make sales of products and/or offer services to consumers in
return for charges to earn revenue. Thus, a business may refer to a small, family-based business
or a particular department at a giant global company. Some of the critical parameters of business
include managerial, financial, marketing and production functions and business operations.
Today, with the advanced method of globalization, business is a broad spectrum ranging from an
individual who owns a small shop to large business corporations that hold their branches all over
the world. Businesses are significant in the development of the economy and in enhancing new
ideas and employment chances.
Importance of Studying Business
The following are some reasons why studying business for an individual and society is important
today.
1. Career Opportunities
Understanding business principles opens up windows to various occupations in nearly every
marketing, financial, human resources, and management sector. Due to their versatility, business
graduates can find themselves in any field of work; hence, they avail themselves of various jobs
and promotions.
2. Entrepreneurial Skills
Politics introduces people to business and how they can set up and manage their own business
enterprises. Its purpose is to solve such brittle questions of entrepreneurship as the competence
of market research, economic control, planning, and others.
3. Economic Understanding
Therefore, having general knowledge of business affairs helps employees and people in general
understand how some economies function. It provides knowledge about the current market
trends, governments' activities that influence the economy, and the world's events within the
national and international economy to make the right decisions and manage ones personal
finance.
4. Strategic Thinking and Problem-Solving
Education in business promotes a more strategic mentality in the problem-solving process. It
makes learners understand how to solve complex issues and design workable and harmonized
plans and decisions that are crucial when one is working as a professional.
5. Leadership and Management Skills
Business management education aids in the acquisition of vital leadership and management skills
in business. This entails discovering how to influence workers, manage available resources, and
steer organizations to their intended bearings, which are essential for both workers' and
organizations' progress.
6. Ethical Awareness
The business program strand suggests the significance of concepts like ethics and corporate
social responsibility. This assists students in perceiving the importance of ethical behavior in
business and other dealings and thus encourages a positive impact on society.
7. Global Perspective
Specifically, understanding business in today's world gives a cross-cultural perspective on
business, trade, and investment. It is important for any organisation to have this awareness,
especially when trying to compete in the global market and comprehend the various
environments in the global marketplace.
8. Innovation and Adaptability
Management education enhances the dynamism and creativity of the students by furnishing them
with new concepts, which helps in sharpening their tools, techniques, and business strategies.
This prepares them to perform well in or evolve within the dynamic factors of the business world
and to promote ways of generating new goods.
9. Networking Opportunities
In business schools, there are many interactions in form of socialization with classmates,
teachers/professors, working professionals and graduates. It is unwise not to establish a good
source of contacts because this can be handy when searching for employment, looking for a role
model, or a business partner.
10. Personal Development
Business majors also promote the development of personality through the enhancement of
linguistic communication, the capacity to organize, and the ability to think. These skills can be
helpful in daily life as well as in work-related tasks.
Early Evolution
The peculiar journey of business through historical epochs is quite a colorful one,
reflecting the course taken by the human society and its economy. The origin of business
activities can be dated back to ancient civilizations, including the Sumerians of Mesopotamia,
the Egyptians, and the Indus Valley civilization, in which some form of trading activities existed,
majorly trading through a barter system only. Greek and Roman society started using currency in
their daily lives, which made business dealings more complex and as a result, structures of early
banking and commercial laws were implemented. At the time of medieval and the development
of trade companies in Europe and new conveyance like the Silk Road which helped in spread of
products as well as ideas of eastern and western countries. During the Renaissance period, the
joint-stock companies and the basic procedures of modern capitalism came into the stage with
the emergence of the Age of
The Industrial Revolution
The Industrial Revolution marked a particular business development in the 18th and 19th
century, bringing new concepts such as mass production, mechanization, and factories. This
period also saw the birth of industrial giants and on entity of gigantic companies. Moving on to
the twentieth century, the advancement of/improvement in technology, transport, and
communication led to the globalization of markets, hence the formation of multinational
corporations. The following are the three organizational paradigms of the rise of the century:
Digital technology change that is evident in nearly all organizations, the emergence of the e-
commerce business model, and the increasing popularity of the gig economy business model. In
these periods, the set principles and laws together with economical theories have changed to
correspond with the present business environment proving that business is a dynamic and
creative human activity crucial for any society.
The Rise of Corporations
The fundamental social and economic changes which occurred in the second half of the
nineteenth century and the first decades of the twentieth century promoted the phenomenon of
corporate management as the key players in the sphere of business. Thus, sole trader businesses,
partnership, and corporations are some examples of the legal business structures that can be
established. However, corporations are different from sole trader businesses and partnership
business in the sense that the business takes the identity of a business person legally. It provides
limited liability to its shareholders. This structure enabled the businesses to mobilize huge
amounts of capital through the floatation of stocks, which in turn supported investment and firm
growth.
4 Corporations were on the rise with industries such as railroads, oil, steel and
telecommunications industries. Many barons of the capitalist era including John D. Rockefeller,
Andrew Carnegie as well as J. P Morgan invested in big businesses. They engaged in practices
like vertical integration as well as horizontal integration. While vertical integration referred to
acquiring and owning all the resources used in production from the raw materials to the
distribution channel, horizontal integration was acquiring or merging competitors.
4Fiber and concentrated economic power was also in the late 19th century the beginning of
antitrust laws in reaction to monopolistic business actions. The most crucial particular piece of
legislation was the Sherman Antitrust Act of 1890 in the USA which prohibited anti-competitive
practices and stimulated fair competition. These regulatory measures aimed at advising the
conserving and fostering approach to corporate development and the interest in the buyer's and
small vendors' rights protection.
4 Companies also became international within their management and operations, looking
for more markets and raw materials. MNEs appeared, companies began investing in more than
one country and thus initiating globalization. The globalization of trade and business enhanced
the coupling and dependency of the global economy through sharing of goods and services
globally.
4The development of corporations also saw improvement in managerial practices. Frederick
Winslow Taylor also pointed out the scientific management system, and with the arrival of
organizational theories by Max Weber and Henri Fayol, the business world became more
systematic. These management principles centered on planning, coordination, and control and
later formed the basic framework of contemporary business administration.
The Digital Age and Modern Business
The late 20th and beginning of the 21st centuries are considered digital times, during
which Internet and computer technologies actively grew. Thus, the computer, the Internet, and
mobile devices introduced massive transformations in business communication and relationships
with consumers.
4 Internet has influenced business models in the following ways irrespective of the business
field. This is evident through today's market outlets like Amazon and Alibaba contribute to
revolution of the retail business through sales from any part of the world. Examples of
innovations that have been adopted to enhance the payment system securities include PayPal and
mobile wallets. Modern internet marketing possibilities comprise the possibility of using such
novelties as FaceBook, Twitter, and other social networks as new forms of interacting with
buyers and real-time brand building.
4 The modern IT is one of the business production factors, as its application influences
productivity, while its inclusion in companies' activities enhances performance. Presently, ERP
systems and CRM together with data analytics contribute to the setting of correct strategies that
the enterprise need for managing its resources and making the right decisions. The technology of
cloud computing has easily gained one of the most significant recognitions regarding storage and
access to data for business ventures through the growth of operations and cooperation on the
international level.
4Flexible work has also been attributed to this technological advancement; this comprises
the gig economy and working remotely. Seven kinds of digital worker career platforms are
available; they include Uber, Airbnb, and freelance at Upwork. The emergence of the COVID-19
pandemic forced organizations to adopt a new mode of work delivery based on the use of
informal resources coupled with the practice of working from home.
In the context of the existing business environment, such characteristics as innovational
and flexible seem to be vital. Specifically, it can be stated that businesses are constantly in a
state of flux primarily due to emergent technologies and evolving consumer trends. These are
induced by various new firms along with traditional firms in as far as adopting AI, machine
learning, Blockchain, IoT in generating new solutions.4 It brings opportunities it also leaves
threats behind: cybersecurity threats, vital data protection concerns, and the problem of digital
inequality. These are some of the obstacles that organisations have to face when managing the
business with ethical manners and social responsibility
Types of Businesses
Sole Proprietorship
4 Sole trading is the simplest form of business and is adopted often by small business
ventures. For this reason, it can be managed and operated by a single person who bears all the
responsibility for the firm's performance, the implemented business strategies, and the financial
reparation options. Once more, the structure is not difficult to construct, and clients do not need
to undergo a lot of legal formalities or pay for costly attorney services. Since the owner
participates in the business, the company's revenue and expenditure are reported on the owner's
tax return, thus making tax calculation easy.
Though, some negative aspects characterize sole trader. It is also important to note that
the owner is fully accountable for fulfilling all the accountabilities of the firm's account; thus,
they use personal assets to discharge business liabilities. This can be a disadvantage especiall for
enterprises that are quite sensitive in terms of finance or legal matters. Furthermore, financing is
challenging since sole trader businesses require little capital to establish; however, the owner's
funds or personal credit can be used in the business.For this reason, it is seen that there is some
risk involved in this sole proprietorship business, but those risks have some merits, which are
given below: The business holder has full and centralized control over the decisions regarding
the business and is solely authorized to control business income. They are optimal for small,
low-profile businesses and are a fair methodology for persons to try businesses before going for
structures.
Partnership
A partnership therefore refers to a business entity formed by two or more people with
similar charges in the control of the business and its profits. Generally, partnerships can be
categorized as general partnership (GP) and limited partnership (LP). All partners in a general
partnership actively participate n management of the business and they have joint and several
liabilities arising from the business operations. Unlike the above, a limited partnership involves
the business general partners who oversee the business activities with full legal responsibility for
the business's obligations and liabilities and limited partners who invest in the business and enjoy
limited legal responsibility of the business's liabilities to the extent of their investment.
Collaborations have many benefits such as mergers of resources and facilities. Skills,
knowledge, and financial assets of the partners could be pooled making the business a better
prospect. Also, partnerships enjoy a feature of pass-through taxation where the income of the
business is taxed on the partners' personal tax returns.
4However, the cooperation with other companies also has some primary disadvantages. Conflict
is destructive to partnership because it slows down decision making and injures the operations of
the business. The aspect of limited personal liability is lacking in general partnerships and this is
considered a major risk because the partners are held personally responsible over the Business's
debts and commitments. Moreover, partnerships cannot organize collective capital as easily as
limited companies, as they are restricted by its capital subscribed by the partners as well as the
partners' credit worthiness.
4 Partnership agreements are very vital in identifying the functions, duties and obligations,
revenues how shared and most importantly, the methods of resolving the conflict among the
partners. This eliminates situations of conflict, thus fostering proper business operations.
Corporations
A corporation therefore refers to a business organization that operates as a legal person
with the legal identity distinct from the owners or "shareholders." It is formed by submission of
the articles of incorporation and operated by the board of directors. Corporation involvement
merges the shareholder's identities with the corporation: their investments cannot be touched to
for business losses or business debts. The above structure is useful for the attraction of the
investors since the risk factor is limited to the amount of money the investor took to the
corporation.
4 There were two main sorts of corporations, that included C corporations and S
corporations. However, it should be noted that only C corporations serve this purpose and are
subjected to taxation both from the entity's generated profits and from the personal income from
the shareholders' dividends. S corporations on the other hand are pass through entities implying
that while the profits earned get taxed at the brent level, there is no double taxation. However, S
corporations have restrictions on the kind of shareholders and the number of shareholders that
can be at any given period.
4Corporation on the other has perpetual existence, meaning it takes a very long time to
fold even if the ownership has changed hands. Due to this stability they qualify as the best
candidates for investors and lenders to put their money or give credit to in the economy. Second,
in regards to new fund, corporations release new stocks and bonds, through which it can obtain
new fund for its expansion.
4 The corporate structure however has got more of the government regulations as well as
formalities that need to be complied than any other structure like the sole trader, partnership
businesses among others. There are specific behavioral restraints imposed on companies and
their boards, and the latter are required to convene their meetings regularly; the documentation of
the events and transactions must be precise and very thorough. These requirements may be
costly, and sometimes time consuming especially when applied in business entities that are
considered small.
Limited Liability Companies (LLC)
4 LLC can be described as a form of business entity that occupies a middle ground between
a corporation and a limited partnership because, on the one hand, the owners of the firm are
legally responsible for the debts of the business, a factor that is similar to corporations, while on
the other hand, the LLC like other forms of business entities is taxed. They are formed through
the filing of articles of organization with the state and carry out organizational actions through an
organizational framework that relates to the formation element of the managerial structure in
addition to its role.
4Members also are shareholders and also enjoy managers limited liability and therefore the
owners' properties cannot be reached by creditors of an LLC. As is the case of corporations,
protection is provided; however, there is no question of double taxation as with the case of
corporations. This simply means that by subjectioning the entity of LLCs to taxation, business
earnings and losses are reflected to the members' income tax returns implying the non-payment
of taxes at corporate income level.
4The other merit of LLC is that it grants much space to Its members in regards to the run and
management of the firm as contrasted to other business structures. An LLC concerning its
operation can have its members managing it themselves (member-managed LLCs) or hiring
managers (managed LLCs hence the flexibility. However, LLCs are comparably lesser restricted
by legislation and bureaucracy than corporations, that is to say there are seemingly few restraints
on LLCs than corporations.
4However, the following are some of the disadvantages that are linked with the operation of
LLCs. It can be merged or acquired by other forms of business organisations, but it has
restriction on how ownership interest can be transferred; several can have limited existence in
some of the states and they have to be renewed or reconstructed after sometime. In addition, if
Puccini translates to an LLC, the members are shielded of legal measures being taken against
them though it is unlawful to mingle the business cash within members' cash.
Non-Profit Organizations
These are institutions that are formed for other reasons other than the production of
profits since they are non-profit making organizations. The targets aim at achieving the planned
social, education and religious/charitable purposes.4Charitable organisations are non profits and
they have a board of directors and some legalities must be followed according to their by-laws,
and things like that if they want to retain their non-profit organisation tax exempt status.
Therefore, this strained institution began to depend on the grant, donation and the other forms of
fund-raising in order to fund their action. It is not distributed to the owners, employees and
shareholders but retained and utilized to fund the goals of the firm.
4That is why the main advantage of the existence of legitimate non-profit organisations is the
ability to receive funds and organise tax-exempt fundraising campaigns with the public and large
businesses as well as receive workers' donations. Thus the case is that such funding is crucial to
their programs as well as activities. Also, self-employed derive credibility meaning that one
gains the trust of the society for volunteers and support for the non-profit organization.
4However, for non-profit organizations, issues such as the issue of depending on external funding
which is limited and rivalry still affect them. It must also satisfy the governance and reporting
standards, which could be a nuisance to sort out in an administrative manner. Furthermore, like
the ordinary non-profit making organizations they are automatically trapped in the laws that
would disqualify them from monetary campaign and lobbying.
Business Functions
Management
Management can be described as organization and direction of the operations and assets
of an organization towards the achievement of organizational goals. It also includes definition of
the tasks to be performed and organization of operations; management of people; stewardship of
funds, and leadership of all other facets of an organization’s requirements. Management has the
responsibility of ensuring that an organization produces the required outcome in the right way.
4According to the research, the planning term is stated as planning is the act of formulating
courses of action and their execution. These are for instance; The Management planning which
encompasses formulation of long-term Management objectives and the implemented planning
which relates to activities and endeavors for the short-term.
4 Organization subsumes the arrangement of people, things and activities pertaining to the
accomplishment of organization goals in an orderly fashion. This entails issues such as formation
of structures, detailing roles of individuals in organizational leadership besides communication
structure that follows.
Marketing
Marketing is the organizational function that is responsible for the communication
process of the creation of value to the target customers. This implies the need to initially
concentrate on the customers and demarcating what they require or desire in the market,
developing something that will solve the need and inform the targeted market of its availability
and worth. The objectives of marketing communication therefore include educating, gaining
approval or making consumers change and adopt certain behaviours that are beneficial to the
organizations’ sales.
4 Market research is a crucial part of marketing because it involves the process of getting
information concerning individuals, contenders or competitors and trends. These are often used
in an endeavor to identify likely appeal areas, and correctly decide on the course of action
relating to the development, the price, and the place of a certain product.
4Product development can involve the creation of the new service and goods that are needed in
the current market. The organizational claimed is observed in product development in
engineering new products or selecting as well as changing products to address the market needs
and generate value.
4
Finance
Finance in simple terms is that area of business that is responsible for the management of
money that comes to and goes from a business. Procurement, use and accountability of resources
especially money in an attempt to achieve the stipulated goals of the company or an institution.
Finance plays an important role of sourcing for funds to finance the activities of an organization,
paying for all its expenses and also expanding its operations.
4Budgeting is defined as the process of forecasting future expenditures and the method of how
funds are to be expended to meet these estimates. These are the processes of budgeting,
specifying financial goals and setting up of the strategies and mechanisms of financing and fund
flow.
4 The act of obtaining funds that would be used in the operation of an organization as well
as its growth is known as acquisition of capital. This is done through entering into credit
facilities, formation of bonds or floating stock by offering shares. The purpose of this paper is to
review the main capital acquisition activities to increase the finance requirement of the
companies with special reference to risks and cost associated with it.
4Financial management can be explained as the management of financial resources of the
business organization including cash, investments, and the accounts. Works include keeping
records of debts, revenues, assets, all the activities captured by the financial legislation in an
organization.
Operations
Operation is a concept that defines all the activities that are undertaken in an organisation
with an aim of delivering products or providing services. It involves creating and designing of
self and production networks and optimisation of the existing processes in a firm. Operation
management involve control of resources, and creation of low cost yet high-quality goods.
4Production planning hence entails items that concern what product has to be manufactured, how
many, and at what time. This include predicting the level of demand of the products, strategizing
on the way of preparing the products and even the level of stocks.
4
Human Resources
Human Resources (HR) is an organizational body which manages itself, and other
similar entities. The common activities in this category are: the choice of workers and
acquisition, the impact, training and planning of employees, relations and compensation, and
employees' rights. In the current world of flow, the HR department deals with obtaining
employees, satisfying, and meeting the legal aspects of the firm.
4 Recruitment can be understood easily as the action which implies searching and attracting
people with the organization's requirements for hire and selecting them. These include making of
job descriptions, interviewing and the selection of the most appropriate candidates.Hu and Dine
(2015) mentioned that training and development enhance the quality of employee's knowledge
and skill that are required to perform work. This covers the processes of orientation,
development and training that an organization sets and goes through in order to ensure that the
employee has the necessary information about matters as regards their career and the market.
4Performance management can be defined as the process of increasing the performance of an
organization particularly in its use of human resources. This include; defining organizational
performance measures, measuring employees' performance, communicating performance
appraisals & designing training and development initiatives.
4 Rewards and remunerations relate to the formulation and management of the employee
reward systems which may include wages, incentives, medical care, pensions, and others.
Compensation and benefits thus forms part of the critical pillars of any Strategic Human
Resource management because they assist in retaining top and qualified talent and summing up
the ability to encourage the staff to perform in manner that is most beneficial to the achievement
of organizational objectives.4HR becomes significantly important in the creation of a competent
and a youthful human resource, the compliance with the law and the promotion of organizational
performance by improving the right management of Employees.
Business Environment
Economic Environment
Economic environment is the social facts and circumstances that define the
characteristics of the economy's behavior. It includes factors on the national level like economic
growth, inflation rate, interest rates, and the employment level and on the individual level like
consumer behavior, market demand and the trends in the industry.
4Economic growth is the measure of the engaging economic environment and posits the rate of
expansion or contraction in the economy. Higher economic growth is associated with higher
consumers' spending, corporate investments, and employment opportunities that are useful in
supporting business operations and profitability. On that hand, periodic economic downturns or
slowdowns have negative impact on consumer's buying behaviour, lower demand and higher risk
in business operations.
4Inflation and interest rates also affect business. Purchasing power and consumer
expenditures occur through inflation, which is the general increase in the price level of products
and services. Inflation makes the price level very high hence shrinking the profit margin and
making the product or services very expansive. This is a rate which is standardized by the central
bank and it affects the price at which firms borrow funds to finance expansion or investment.
Thus, lowering interest rates can aid in increasing the level of borrowing and therefore overall
economic activity while, raising the interest rates can reduce spending and investment. Also, the
economic environment comprises aspects such as exchange rates, international trade relations,
government fiscal and monetary policies among others. These circumstances may impact the
companies functioning within the international environment by changing the export and import
tendencies, supply chain costs, and competitiveness.
4 Knowledge of the economic system provides information about future trends in the
market and possible economic risks for a business to make correct strategic decisions. That is
why understanding of the changes that take place in the economy and subsequent adjustment to
them allows for the correct distribution of resources and optimal use of opportunities, as well as
the prevention of threats.
Legal Environment
Legal factors can be defined as legal systems and pressures due to laws that govern
business and its processes in the space of a given country. They include national laws and
international laws that provide for various sectors of business operations including corporate
management, employment relations, ownership and protection of inventions and innovations by
business entities, and Consumer Relations.
4 Business organizations endure numerous legalities that must be complied with in order to
facilitate the implementation of stiff ethical standards and in order to protect the shareholders'
and others' interests besides avoiding legal repercussions of their action. For instance, corporate
laws as one of the branches of commercial laws deals with the legal relations connected with
incorporation, organization and deregistration of companies and LLCs. Employment laws
regulate how employers and employees' can regard each other under the areas of hiring and pay,
terms of work, and employee benefits.
4Legal rights are granted with the objective of preventing others from copying or using
the creation, idea or invention without the consent of the owner. Patents, copyrights, and
trademarks are the principal distinct forms of regulation of the identified intellectual property
assets and foster the formulation of conducive incentives for new creation and better and
enhanced research and developmental undertaking.
4 Consumer protection laws can be classified as non-justiciable constitutional rights that
guard a person against unfair business practices, misleading advertisements, and sale of harmful
goods. These laws require the uptodate information to be disclosed, the products being of
optimal quality and the consumer complaints satisfactorily handled. All the legal systems are
rather active which implies that laws and regulations are not demure but rather seem to evolve
with the societies, technologies and even the world trends. Managers are required to monitor
legal changes, consult about them if necessary and set up compliance tools that help manage and
prevent any legal concerns that might be present concerning the company and the law.
Technological Environment
Technological context thus means the technology, advancement, and innovation together
with the technology support system that characterizes business and competitiveness. It consists
of the technology definition, information technology development, digitalization and disruption
and how later influences industries and markets.
4Technological revolutions are in a very high rate, and this makes every organization to alter the
way they conduct their activities and the way they communicate as well as the provision of
goods and services also. Internet, cloud technologies, artificial intelligence and the blockchain
characterize the contemporary business environment particularly because they facilitate
processes, real time analysis, and efficient customer relation.
4Digitization has impacted different sectors and through different industries through
degrees of optimization, cost reduction and advancement of new opportunities for business.
Many restrictions to the online selling platforms have since been eliminated to expand customer
base across the globe and probably altering the face of retailing. The threats offered by the
possibilities of advertising and brand communication through social media and other forms of
digitally marketed media have completely revolutionized the advertising landscape by offering
excellent tools for specific marketing and communicating directly with the customers. But again,
there are risks and threats which are encountered in the use of technology while conducting
business, for instance; cyber issues of privacy and security, and the ever arising need to invest in
IT and human resource. CIS 191 Contemporary Issues in Business IT Today's business
environment depicts a situation that requires firms to incorporate proper security measures to
protect their networks from attacks, abide by the legal rules on handling customer data, and
adopt novel technologies that can be trusted by the public.
4The imposition of the use of new technologies in the field of business development
enables one to stay relevant, expand, and overcome new obstacles. Towards this, one should note
that technology today can and should be utilised to increase business productivity as well as
clients' satisfaction degrees, on the one hand, and to seek new niches for business development in
the digital environment, on the other.
Social and Cultural Environment
Social and cultural environment refers to the culture and demographics of society and
how this affects consumers and their buying behavior, the organizations' operations and the
markets. This include issue like demographic changes, people's preferences, diversities and their
perception to issues like sustainability, ethical issues and companies social responsibilities.
4Consumer demographics are influenced by the population size, its composition, rates of
urbanization and migration influence the demand for certain products. Demographic changes that
organizations experience requires them to align their business solutions such as products, service
delivery, and promotional techniques to the population groups.
4Culture acts as a significant determinant of the consumer behavior and the choices that
they make on the products they are likely to go for, their impression about certain brands and on
the overall impact of certain marketing strategies. Understanding culture and adapting it plays a
crucial role for every company that operates in a multicultural world, thus making it vital for
their products and campaigns to be accepted by the people in those regions.
Consumers and employees are raising their awareness of social values concerning
sustainability and ethical business behavior. Customers are always willing to buy products with
brands that uphold environmental awareness, corporate social responsibility and ethical business.
As a result, companies are adapting to adopt Sustainable development goals for operations,
sustainable sourcing, and CSR activities.
4Legal factors also depict the societal and culture environment in relation to legal standards that
affect the operations of a business and its reputation in the public domain through legal
Approvals, social movements, and public opinion. Organizations need to communicate with
stakeholders, pay attention to social concerns and ensure that corporate values match the
society's to gain trust, customer loyalty and for the company to be accepted in the society.
Global Environment
The global environment therefore refers to the globalization of the economic structure,
the markets and the business realm. The specificity that belongs to this type is the World trade
associations, political influences, the Global supply chain, and the Global issue of cultural
differences affecting the business, including its growth and competitiveness strategies.
4In this regard, globalization has provided new opportunities for businesses in regards to new
market to penetrate into, new sources for acquisition of inputs or raw materials, and new source
of human resource. FTAs and REBs are typical processes of international procurement for the
purpose of increasing foreign sales of goods and decreasing trade barriers.
4 Outsourcing and global supply chain management concepts are her operating models and
therefore leading to the realization of the benefits of the concepts such as, increased efficiency
through cutting on costs of production, product differentiation, gaining special skills and
equipment. However, with global supply chains, the businesses expose themselves to risks such
as; interrupted supply chain, political risks and legal demands in different countries.
Global multicultural markets make potential consumers' diversity and culture to be vital
concerns to organizations in conducting marketing and business activities. The element of
multiculturalism, language, and cultural understanding is critical in establishing relations,
knowing the client's demands, and gaining market share
Business Ethics and Social Responsibility
Business ethics are principles or standards of right and wrong that must be followed by
business entities at the time of making business decisions. It gives the ability to separate good
and bad deeds; the focus on justice, non-lawful acts, the honesty of actions, and the responsibility
in all the commercial processes. Business ethics fosters credibility in business, not only with the
primary consumers, but also the sub consumers such as the employees, investors and the society
as a whole.
one can observe that the main value of business ethics concerns maintaining positive
organizational culture and image. Ethical behaviour makes the employees committed and
motivated as the working environment will be humane. It enhances the level of patronage from
customers because it provides unequivocal assurance of the business entity's honest in its
transactions. The ethical business attracts investors who embrace sustainable activities as well as
those who are sensitive to governance structures. Furthermore, ethical practices enable the
organization to uphold the laws and regulations in regards to legal consequences and the risks
involving legal, financial and reputation ramifications of unethical actions by the business.
4Proper business ethics also complies with the standards of a society and is instrumental in
creating sustainable development. Ethical companies' decision-making takes into account the
consequences on stakeholders, society and nature and aim at deriving the highest benefit with the
least cost. When ethical dimensions become built into the company's strategic frame and
management processes, the firm's sustainable financial returns can increase, and its impact on the
society prove beneficial.
Ethical Theories and Principles
In some circumstances, there are structures of ethical theories that help in explaining the
reasons for being ethical in organizations or businesses. For example, the theory of utilitarianism
intends at having the degree of utility as high as possible in as many amount of people as
possible. In business, utilitarian theories may justify decisions that work towards attaining more
of profits regardless of the harm on the stakeholders and society.
4Thus, unlike deontological ethics that is focused on some moral formulas or obligations
concerning the outcome that may occur. Deontological perspective in business concentrates on
the principle of responsibility contradicting consequences and that the major duties include;
safety of various rights, commitment to the principles of truth and fairness among others.
4Thus, virtue ethics focuses on the ethical principles of people as well as the ethical attributes of
the companies. Applied aspect of virtue ethics in businesses is associated with enhancing the
ethical values of people in business and leaders with prepositions of integrity, trust and care with
the intention of affecting ethical decisions and organizational culture.
4Other such principles include justice and rights; and sustainability major components of ethical
decision making at the business level. Justice is giving the expectations cost and profit a more
favorable distribution to the categorise of people who are interested in the business. As for
respect of rights, there is recognition of the rights of the employees, customers, communities, and
several other personalities of interest. Sustainability themes are strategies that are used in an
effort to bring about the desirable changes on the business plan with regards to the social,
ecological, and economic factors in the society today.
4Ethical theories and principles concern business ethical decisions and map the course required in
organizing coherent and practical approaches to provide sound ethical decisions that do not
undermine a firm's integrity and requested credibility.
Corporate Social Responsibility (CSR)
This is the coordination of business processes and plans concerning social,
environmental, and ethical issues. CSR initiatives are directed in the sphere of social issue
mitigation, enhancement of the social conditions of community, environmental awareness, and
shareholders and all other stakeholders' satisfaction.
4CSR can also be explained in terms of several activities and programmes including charitable
activities, voluntary work, environmental initiatives, purchasing and supply chain, as well as
programmes that aim at keeping the employees happy. Organizations sometimes take up CSR as
a way of building up their reputation among the market players, protecting its employees as well
as consumers and survival of the organization.
4Main fields of CSR are environment management, which involves measures such as
implementing holes to reduce emission of carbon, conserving natural resources, and marketing of
green products for instance. Organization and people involvement has to do with the adoption of
social causes meant to improve quality of people's lives and their status in relation to the societal
needs.
4Ethical implication is also proved to be another aspect of CSR which attempts to bring
ethical compulsion on the businesses, in an effort to provide maximum transparency and
accountabilities in the upcoming CSR activities. According to the CSR strategies involves
reasoning on the values that both the firms and society holds, the expectations that the society
has towards both the firms and the needs that are necessary for the improvement of the society
alongside the increase in the value of the business entities.
Case Studies of Ethical and Unethical Business Practices
Ethical Business Practices
Patagonia: Education with a specific view towards embracing customer
environmentally sustainable causes. Patagonia is a clothing and materials for outdoor activities,
which gained popularity due to its numerous concerns about preserving the environment and
social justice. The company follows the policy of sharing its 1 percent gross sale revenue with
environmental organizations, and it also incorporates recycled items in its productions.
Patagonia's 'Worn Wear' initiative is a promotion of second-hand equipment, which would
otherwise would have been dismantled or set to the dump. The company has also described its
supply chain, where it keenly balances the employment status of workers and environmental
conservation. In addition to improving the company's image, an ethical position towards the
environment and people draws clients with similar attitudes into Patagonia's sphere.
Ben & Jerry's: Social Responsibility refers to a business's actions that impact the society
and or environment of the company. The social responsibility approach is well adopted by Ben &
Jerry's, the ice cream sellers company. The company's social and environmental responsibilities
are incorporated into its strategic management system. For instance, Ben & Jerry’s sources fair
trade-certified ingredients for its products funds climate justice work and speak up for Black
lives. This is established by ensuring that the company's foundation supports organizations that
operate at the grassroots level advocating for change. Thus, focusing on the social good
alongside the profit, Ben & Jerry's have established a customer base and defined the principles of
being responsible.
Unethical Business Practices
Enron: Corporate Fraud :Business scandals such as the Enron Corporation scandal
which was discovered in 2001 are examples of corporate fraud. Enron had to manipulate its
reports to produce plausible figures ensnaring the stakeholders and the requisite authorities into
believing in nonexistent profits driven by phantom revenues. Each company executive traded in
the company's shares, while the employees were urged to adjust and falsify the accounting
records. When the fraud was disclosed, Enron went bankrupt, reversing its financial position for
shareholders and employees. Due to the scandal many new rules for corporate governance and
financial report implementations like the Sarbanes Oxley act came into force.
Volkswagen: Emissions Scandal : Volkswagen was implicated in September 2015 for
having designed 'defeat devices' in as many as 11 million of its diesel automobiles to bypass
emissions tests. These devices enabled cars to "pass" emissions standards, even as they polluted
at rates far beyond what was legal under regular conditions. The lies also subverted
environmental legislation and undermined the general population's faith in the company.
Volkswagen had to deal with penalties, law suits compensation and loss of consumers' trust. The
scandal made people and regulators aware of issues of corporate ethics and corporate integrity in
the creation and preservation of the confidence of customers.
Analysis and Lessons Learned: The following cases explain how ethical and unethical
approaches in business affect a business organization's reputation, profitability, and compliance.
Owning to ethical companies such as Patagonia and Ben & Jerry's, the incorporation of social
and environmental responsibility into business strategies reinforces consumer confidence hence
growth of stakeholder trust. However, there are several organs of unethical practices as
exemplified by Enron and Volkswagen where companies suffered extremely severe penalties in
the form of legal consequences and other financial losses, not mentioning the fact that customers
negative markets respond poorly to organizations that engage in the acts recognizing them as
evils.
The general implications that can be drawn from these case studies are: Today's business
environments should be both transparent and accountable and should adhere to the adopted
ethical standards in business operations. Organizations that adopt ethics in their operation apart
from following the right thing in the society they come up with good business strategies that can
pass through test of Scrutiny by law and derivative markets. On the other hand, unethical
practices may make some profits probably in the short-term but are penalized severely which
affects the organization deeply.
Entrepreneurship and Innovation
Entrepreneurship is the process of perceiving opportunities for developing new
businesses .One cannot fail to realize that business personalities are people with foresight who
identify opportunities in the market and after putting time and thinking, they manage to create
opportunities especially in times and conditions that nobody else would dare to venture into.
Whether it is starting a tech based company to revolutionize an industry or utilizing
entrepreneurship to rebuild a downtrodden neighborhood through social entrepreneurship,
creating jobs, catalyzing investments and overall developing a human spirit that persists through
adversity is made possible through the act of entrepreneurship.
Innovation is the engine of the business vocation because innovation is the process of
implementing ideas to produce useful results. Creativity is used in the generation of the new
ideas so that one can come up with new ideas that are creative solutions that can be used to solve
new problems or as small improvements to existing products, services or processes. Whether it is
in expanding the use of renewable sources of energy, designing new and improved
communication interfaces using artificial intelligence, or developing new methods of treating
illnesses, it not only increases in the level of productivity but also contributes to the further
development of industries in the face of an increasingly competitive and dynamic global
environment.
:
Importance
Entrepreneurship
It is the basis of economic accumulation and, as such, plays a huge role in engendering
employment and noting and creating enterprises and sources of wealth within all the world's
economies. Enterprise development itself fosters effort and creativity among people, as it grants
the opportunity to search for solutions, re-allocate resources, and transform them into a business
idea. The activities they pursue not only generate more demand and growth in economic activity
but also re-launching of industries, healthy competition and improvement in productivity.
Freelancers also participate in the region's development as they assume the position of increasing
the quality of communities, looking for funding, and generating conditions for business,
especially startups and SMBs, growth. Through their activities, entrepreneurs offer market
change, making public new radical technologies, and instituting practices which could be
significant to first order social needs. Therefore, it can be concluded that entrepreneurship as a
process can be viewed more effectively in attaining the objectives, relating to growth through
innovation, offering people the opportunities to enhance their standard of living and supporting
the inclusive development paradigms.
Innovation
Innovation forms the basis of change concerning scientific development, quality of life,
or economic competitiveness. Innovation allows organizations to discover creative and research-
based solutions to solve various troubles and unlock new opportunities. The health care,
renewable energy, information technology, and manufacturing industries are among many
sectors that benefit from implementing new practices that improve operational efficiency and cut
costs and increase product quality, thereby improving consumers' satisfaction and product
differentiation. In addition, innovation smoothes sustainable development since it increases
productivity through efficiency, environmental protection of resources, and adaptation to
possible interferences across the globe. Ongoing improvement and changing strategies foster the
development of industries that invigorate and advance economies and make leaders of countries
winners of the innovation race. Also, the practice of innovation encourages the production of
talent, strengthening analytical abilities, and developing practical problem-solving skills in the
future generations to address the problems of the 21st century.
Case Studies of Innovative Businesses
Case studies of innovative businesses highlight successful examples of entrepreneurship
and innovation across industries. The especial business cases indicate the specifics and the
highest results of the entrepreneurial activity and innovations in various industries:
4Tesla Inc.: Tesla completely disrupted the whole car-building market through
revolutionary electric automobiles that are technologically and ecologically ideal and high-
performance. It provides a new generation of a powertrain in electric batteries, drive tech
methods through the Model S, and an approach to an unexplored sale angle that is vastly
different from other car manufacturers.
4
Apple Inc. : Apple can thus be associated with improving innovations in technologies,
gadgets, software, applications, and online services. From iPhone to iPad, as well as other
innovative and highly advanced concepts, the company has been at the forefront in prioritizing
innovations, which have made it capture the market and customers' needs and make itself almost
inseparable from society.
4
Airbnb: The principles of the sharing economy came into play for one of the
microelements of the hospitality business and allowed people who visited chosen districts to rent
them. Thus, through the advancement in technology, the inception and integration of the sharing
economy, and particular client communication, Airbnb influenced the styles and the possibility
of traveling and leasing.
4
Characteristics of Successful Entrepreneurs
4Regarding the concerns that relate actual problems affecting individuals and businesses,
certain characteristics of personality are attributable to effective businessmen which facilitate
taking the best advantage of opportunities for benefiting the businesses solely for the purpose of
prospering them amidst real problems encountered. Key traits include:
Visionary Leadership: Of the entrepreneurs' main activities, one is to recognize new
opportunities, and another is to mobilize initiative and set high goals.
Risk-taking and Resilience: It is equally probable for them to have a certain degree of
flexibility as well as commitment towards the achievement of the compromise due to the
fact that every incidence is a learning process and would take certain measured risks
knowing full well that such incidences are all learning processes.
Innovative Thinking: They are making change creation, reversing traditions, defining
different ways and applying technology and trends.
Passion and Commitment: Businesspeople have commitment which in this context can
be translated to mean that business people must be more committed, reliable, and most of
the time even when the going gets tough, they must strive in their business.
Resourcefulness: Hunt (2010) also stated that, however, according to resource advantage
theory, networks, skills, and capital are the resources by which entrepreneurs are able to
overcome the challenges pertaining to the above-said objectives.His technique assists the
entrepreneurs to decode opportunities when the actual process is encoding risks and
establishing values in the competition of the selling organizations.
Business Strategy and Planning
Strategic Planning Process
Strategic planning is a logical process that relates to the defining of the direction of
organization or company, the creation of long-term goals and the means of achieving these goals,
as well as the provision of resources to attain a competitive edge in an organization. The main
activities that are found to be part of the strategic planning process include the following;
Mission and Vision: In other words, management entails the processes of determining
the very existence of the organization, its mission as well as its vision.
Environmental Analysis: In light of the business environment by identifying the SWOT
analysis techniques as well as the internal and external factors of strength and threats.
Setting Objectives: Incorporation of the SMART objectives in the context of the
organizations' mission and vision statements to improve their efficiency.
Strategy Formulation: Outlining the strategies on how to achieve the laid targets; this
may comprise expansion to other markets, new product development, becoming the
industry cost leader, or uncompromising USP.
Implementation Planning: Creation of implementation schedules, definition of the
sources to fulfill the strategies and assignments of duties for their completion.
Monitoring and Evaluation: The purposeful conduct of appraisals, evaluation of their
achievement in relation to the laid-down objectives and modification if any on the set
strategies.
Strategic planning assists organizations to have a ready position on change as well as
utilizing change productively, protect the organizational alteration of pivotal undertakings
to the organizational goals.
SWOT Analysis
SWOT is an important method of managing and analyzing the position of an organization
relative to the organization’s strengths and weaknesses within it and or the opportunities and
threats existing within the market places of business. It helps organizations to discern areas of
values, anticipate strategic courses of actions and determine improvement and change that would
help counteract several threats and develop competence.
4
Strengths: The organization's own resources and capabilities that would enable it to develop
superior resources than rivals (examples include brand reputation, superior technology or skilled
workforce).
:Weaknesses: Minor Threats Far more internal threats, issues, or opportunities that may be
inhibiting the performance or market place status. ( e. g no proper technology, low operating
productivity, scant amount of cash).
:Opportunities: Opportunities that are available in the market structure of the organization that
may be useful in opening a new market, introducing new product or increasing on the
organization's profit (for instance new markets, new technology, changing consumer preference).
4Threats: Negative consolidates elements that may have a bearing on the business performance or
position in the market either now or in the future – threats, which may include among others:
4On a similar note, competitive position, choices and threats, leveraging resources for decision
making, and integrating identification of goals for strategy.
Competitive Advantage
Competitive advantage is a state of affair in which a certain organization is well
equipped, skilled or possesses a tool that will enable counter the opponents in the market. They
originate from the perception of creating other values for customers, coming up with means of
making the customers sticky to the product and than maintaining the strength that one has in
clients servicing.
4
Cost Leadership: They aim at attaining economies of scale, reduction of costs and operation
improvements to offer products or services cheaper than the competitors for instance Wal Mart,
Amazon.
Differentiation: Creating elements of value that are important to a firm's customer and which
the firm can provide at a price that is higher than the price of competitors' products and building
of customer attachment to the brand (for example, Apple and Nike).
4Focus Strategy: Depending on a particular market area, type of product or service the
organization offers or the customers' needs that would make it unique to other competitors by
providing increased value in specific, selected, and targeted sections of the market (Rolls-Royce
in autos, Adobe in graphic designing tools).
Case Studies of Successful Business Strategies
Apple Inc. : Apple has been able to sustain itself within the technological sector mainly
because the firm has adopted the idea of manufacturing technologically advanced devices
that have relatively high market prices in the market, but at the same time have such
values as design and customers’ satisfaction.
Tesla: From the methodical analysing of the case some of the considerations that may be
attributed to Tesla success and high market capitalization are: Elon Musk’ vision of
changing the outlook of automotive industry via EVs, innovative direct sales model and
new generation batteries.
Starbucks: They have been able to meet the goal of fulfilling the needs of the coffee
consumers who need quality coffee through establishing a new brand in Starbucks as a
coffee specialty, expanding globally and remaining culturally sensitive in several
societies, and launching customer promotions that boost Starbucks’ presence in the
coffeehouse industry.
IKEA: IKEA business strategy that entails use of economical furniture, basically
developed furniture, timely management of supply and also the increase in outlets to
other universes markets in the upcoming global markets has enabled it to become the
largest furniture company in the world.
Google: The use of the strategic compass based on Google’s fundamental competence of
search engine technology, advertisement yielding revenues and product diversification in
the form of Android, YouTube and cloud have busted out the growth and domination of
Google in the digital era.
Conclusion
Business is the process that makes organizations grow through establishment of new
enterprises, inventions and development of strategies. These not only include success and/or
business continuity but also value and competitive advantage as well as economic development.
As for the important factors that will influence the business in the future, digitalization, artificial
intelligence, sustainability strategies, and globalization are important trends in this field. Groups
of implementing these trends help organizations to increase efficiency, diversify industries'
advancements and address societal and environmental needs. Management and business
education hold a vital position in preparing people to fit in different fields of work, ownership,
problem-solving and capital decisions. It prepares graduates for contingent that they are able to
manage, opportunities that they can take, and changes that the global market poses to
individuals. The combined dimensions of entrepreneurship, innovation, strategy, and business
education serves as the cornerstone for organizations to thrive in the largely globalized and
competitive economy.
