Management of Business (H2)

This course provides an introduction to business management, focusing on how businesses operate, are structured, and make decisions to create value for stakeholders. It covers a range of topics across six units, emphasizing the application of business concepts and theories to real-world situations. No prior business knowledge is required.

Unit 1: Business and the Environment

This unit introduces the fundamental concepts of business and its interaction with the external environment. It explores the purpose of business, different business structures, growth strategies, the impact of globalization, and the decision-making process.

• Nature and Purpose of Business: Focuses on creating value for stakeholders (customers, shareholders, suppliers, employees, government, etc.), measuring value (financial and non-financial), and understanding stakeholder influence and conflicts of interest. Business objectives (survival, profit maximization, profit satisficing, and growth) and their role in decision-making are also examined.
• Business Structure: Covers different legal structures (sole proprietorship, partnership, private limited company, public limited company) and factors influencing their choice. It also introduces various economic sectors (primary, secondary, tertiary, public, and private) and other organizational types (public-private partnerships, non-profit organizations, NGOs, social enterprises, and charities).
• Growth of Business: Explores criteria for measuring business size (labor force, capitalization, market share, output), the importance and challenges of SMEs and large businesses, economies and diseconomies of scale, and organic and external growth strategies (joint ventures, strategic alliances, mergers, and takeovers).
• Globalization: Examines the reasons for the growth of multinational businesses, their importance in the global economy, their influence on host countries, and the impact of international connectivity on businesses.
• Decision-Making: Covers the decision-making process (identifying the situation, gathering information, generating options, analyzing options, deciding, implementing, monitoring, and evaluating), external factors affecting decisions (PESTLE analysis), and the characteristics and presentation of information used in decision-making.

Unit 2: Managing People

This unit explores the principles and practices of managing people effectively to create value. It covers management functions, organizational structures, human resource management, leadership styles, motivation theories, and communication processes.

• Nature and Purpose of Management: Focuses on the importance of management in achieving outcomes through effective leadership and the functions of management (planning, organizing, leading, controlling).
• Organizational Structure: Covers elements of organizational structure (hierarchy, span of control, authority, responsibility, delegation, centralization vs. decentralization), approaches to structure (mechanistic vs. organic), and different organizational designs (simple, functional, divisional, matrix).
• Human Resource Management: Explores planning human resource needs, human resource activities (recruitment, selection, training, development, performance appraisal, compensation, promotions, transfers, discipline, dismissals), and the tripartite relationship between management, workforce, and government.
• Leadership: Examines different leadership styles (autocratic, democratic, paternalistic, laissez-faire, situational) and factors influencing leadership style (task, tradition, labor force, team size, personality, situation).
• Motivation: Covers rewards (extrinsic vs. intrinsic), motivation theories (Maslow, Herzberg, McClelland, expectancy theory, equity theory), and financial and non-financial incentives.
• Communication: Explores the communication process (sender, message, receiver, encoding, decoding, medium, feedback, noise), communication channels (formal and informal), and barriers to effective communication.

Unit 3: Marketing

This unit focuses on the role of marketing in enhancing business competitiveness and creating value. It covers market analysis, marketing strategies, market intelligence, market segmentation, targeting and positioning, and the marketing mix.

• Nature and Purpose of Marketing: Introduces different market types (consumer, business, government), marketing indices (market size, growth, share), marketing perspectives (marketing concept, product concept, production concept), and the importance and types of marketing objectives.
• Market Analysis and Strategies: Covers product portfolio analysis (BCG Matrix), product and market growth strategies (Ansoff Matrix), and assessing product and market risks.
• Market Intelligence: Explores the importance of market intelligence for understanding customers and sales forecasting, and the distinction between primary and secondary research.
• Market Segmentation, Targeting, and Positioning: Covers the importance and bases of market segmentation, criteria for target market selection, and market positioning using perceptual maps and unique selling propositions.
• The Marketing Mix: Examines the four Ps of marketing: product (classification, life cycle), price (factors influencing pricing decisions, pricing strategies), promotion (promotional tools, integrated marketing communications), and place (distribution channels, factors influencing channel choice).

Unit 4: Operations Management

This unit focuses on managing resources for efficient production and value creation. It covers operations planning, control, methods, productivity, efficiency, capacity utilization, outsourcing, offshoring, quality management, and inventory management.

• Nature and Purpose of Operations Management: Explores the importance of operations management in managing the transformation process, productivity, quality, and inventory. It also covers the operational process (inputs, process, outputs) and the concept of value-added.
• Operations Planning and Control: Explores the importance and activities of operations planning and control, including loading, sequencing, scheduling, monitoring, and control.
• Methods of Operations: Covers different operation methods (job, batch, flow), their features, advantages, disadvantages, and factors influencing their choice. It also examines capital and labor intensity and factors affecting their choice.
• Productivity and Efficiency: Explores the importance of productivity and efficiency and ways to improve them (training, technology, management, motivation).
• Capacity Utilization, Outsourcing, and Offshoring: Covers the importance and calculation of capacity utilization, the effects and implications of capacity excesses and shortages, and the reasons and risks of outsourcing and offshoring.
• Quality Management: Explores the importance of quality, the implications of poor quality, and approaches to ensure quality (quality control, quality assurance, quality improvement).
• Inventory Management: Covers types of inventory, the importance of inventory, costs and benefits of holding inventory, and inventory control methods (inventory control charts, Just-in-Time).

Unit 5: Finance

This unit emphasizes financial management, including sourcing funds, allocating costs, analyzing financial performance, and forecasting financial needs. It covers financial objectives, sources of finance, cost allocation, financial performance analysis, cash flow forecasting, budgeting, and investment appraisal.

• Nature and Purpose of Finance: Explores the importance of setting financial objectives (maximizing shareholder wealth), the need for finance (start-up capital, growth), and managing financial resources effectively.
• Sources of Finance: Covers financial institutions and markets, the relationship between legal structure and sources of finance, types of financing (short-term vs. long-term, debt vs. equity, internal vs. external), and factors affecting the choice of funding sources.
• Bases of Cost Allocation: Covers cost classification (fixed vs. variable, direct vs. indirect), the importance of costing, and costing approaches (full costing, marginal costing, breakeven analysis).
• Financial Performance Analysis: Explores financial statements (Income Statement, Balance Sheet, Cash Flow Statement), financial ratios (liquidity, profitability, gearing, investment), and cash flow management.
• Cash Flow Forecast and Budgeting: Covers the importance and uses of cash flow forecasts, factors affecting uncertainty in forecasts, the importance and role of budgeting, budgetary control (variance analysis), and the benefits and drawbacks of budgets.
• Investment Appraisal: Explores the importance of investment appraisal, relevant risks in investment decisions, and investment appraisal techniques (payback, average rate of return, net present value).

Unit 6: Strategic Management

This unit integrates business concepts and tools to develop and implement strategies for value creation and long-term competitive advantage. It covers strategic analysis, strategic choice, and strategic implementation and evaluation.

• Nature and Purpose of Strategic Management: Explores the importance of strategic management in achieving long-term competitive advantage, ways to obtain competitive advantage, and approaches to sustain it.
• Strategic Analysis: Covers strategic purpose (mission, vision, values), corporate governance (business ethics, corporate social responsibility), analysis of the internal environment (resources, capabilities, core competencies, activities, SWOT analysis), and analysis of the external environment (PESTLE, Porter's Five Forces, SWOT analysis).
• Strategic Choice: Examines business-level strategies (differentiation, cost leadership) and corporate-level strategies (vertical integration, diversification).
• Strategic Implementation and Evaluation: Covers organizational design (structure, culture), strategic leadership (role of leader, leadership styles, communication), change management (reasons for change, resistance to change, managing change), and measuring success (motivation, market share, productivity, return on investment).