B415

1. Principles of Business

2. Design of the module
Stage 1: The Nature of Business (w/c 06/10/14 to w/c 27/10/14)
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• The purpose of business
• Macro economics and regulation
• Economic systems, CSR and sustainability
• Global business models: The good, bad and ugly
Stage 2: The Building Blocks of Business (w/c 03/11/14 to w/c
02/02/14)
• Introduction to Business Environment
• Introduction to Management
• Introduction to Marketing
• Introduction to Law
• Introduction to Finance
Each discipline will have two sections in stage 2

3. Design of the module
3
Stage 3: Simulated Placements (w/c 09/02/15 to 02/03/15)
• Simulated placement 1 (Marketing)
• Simulated placement 2 (Finance and General Business)
• Simulated placement 3 (Management and Law)
Stage 4: Managing a Business (w/c 09/03/15 to w/c 30/03/15)
• Establishing a strategy (mission, values, purpose)
• Leadership, collaboration and influencing organisational behaviour
• Introduction to innovation
• Corporate governance and brining it all together

4. Structure of each topic
The nature of business:
The purpose of business 2 lectures + 4 seminars
Macro economics and regulation 2 lectures + 4 seminars
Economic systems, CSR and sustainability 2 lectures + 4 seminars
Global business models: The good, bad and ugly 2 lectures + 4 seminars
The building blocks for business:
Introduction to Business environment 1 2 lectures + 4 seminars
Introduction to Management 1 2 lectures + 4 seminars
Introduction to Marketing 1 2 lectures + 4 seminars
Introduction to Law 1 2 lectures + 4 seminars
Introduction to Finance 1 2 lectures + 4 seminars
Introduction to Marketing 2 2 lectures + 4 seminars
Introduction to Finance 2 2 lectures + 4 seminars
Introduction to Law 2 2 lectures + 4 seminars
Introduction to Management 2 2 lectures + 4 seminars
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5. Structure of each topic
5
Simulated placements:
Simulated placement 1 (Marketing) 2 x 5 hour days of activities
Simulated placement 2 (Finance & General
Business) 2 x 5 hour days of activities
Simulated placement 3 (Management & Law) 2 x 5 hour days of activities
Managing a business - pulling it all together:
Estabishing a strategy (mission, values, purpose) 2 lectures + 4 seminars
Leadership, collaboration & influencing
organisational behaviour 2 lectures + 4 seminars
Introduction to innovation 2 lectures + 4 seminars
Corporate Governance and Bringing it all together 2 lectures + 4 seminars

6. Principles of Business
Purpose of Business

7. Overview
• Understand what businesses do; profit seeking and
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maximising interests of shareholders and
stakeholders
• How they add value and compete to satisfy
customer needs
• Identify the major types of businesses
• Describing the concept of risk and reward in
business
• Discuss the various eras and evolutions of business
e.g. today we are in the technological era
• Describe and discuss the major functional areas of a
business e.g. marketing, finance, operations etc

8. Learning Outcomes
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• Discuss what businesses do and define their goals
and functions
• Explain the concept of adding value in a business
and identify the major types of businesses
• Determine and articulate the evolution of the
business environment
• Identify the major functional areas of a business

9. What is the role of business?
The sole purpose of a
business is to make money
for its shareholders…
(Any business executives
who pursued a goal other
than making money were),
unwitting puppets of the
intellectual forces that
have been undermining the
basis of a free society
these past decades. Milton Friedman,
1970s

10. The archetype of profit maximisation
View video: https://www.youtube.com/watch?v=PF_iorX_MAw

11. When taken to the extreme…

12. Leading to…credit crunch…financial
collapse…global recession in 2008…

13. 13
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A breakdown of consumer trust
“How much, in general, do you trust the following to do business fairly? | % who say very
much or quite a lot” | 2012
Source: nVision Research

14. 14
Trust is breaking down everywhere

15. A companies lifespan is reducing
According to Levitt (1960), companies risk failing by being
short-sighted, complacent and losing touch with what their
customers want. This is known as marketing myopia.

16. A need to re-define the objectives of business?
“A 34% cut in our corporate ethics should return
us to profitability”

17. Creating the win-win business model
We will double our
revenue and half our
environmental
footprint by 2020.
Paul Polman, CEO, Unilever
Source: Unilever.com

18. A new world order of business?
View video: http://www.ted.com/talks/harish_manwani_profit_s_not_always_the_point

19. Why does business exist?
Today Tomorrow
To be the best
company IN THE
world
To be the best
company FOR world
Many brands in
the world
Brands that connect
the world
Sell products to
consumers
Matter to people
Create connection
with people
Talk to consumers at
every opportunity
Give them
something extra
Understand and
be relevant
A changing
world

20. The Role of Business: To Add Value
There is only ever one boss. The
customer. And he can fire everybody
in the company from the chairman
on down, simply by spending his
money somewhere else
Sam Walton, Founder of
Walmart

21. Meeting a consumer need: Consider how
these brands do it…

22. Adding Value: An example from Spotify
Adds value by
aggregating music
and provides it in a
convenient instant
format
I can listen to any
music I want
anytime, anywhere
for one simple fee
We get commission
on every listen and
reduces illegal
downloads

23. The Business Model
Sales
Revenue
Costs
Sales-
Costs

24. To add value you need to know your
customers
Target
Consumer Market
Need
Production
Integrated
Marketing
Profit via
Customer
Value
Existing
Product Sales &
Promotion
Profit via
Sales Volume
Could deliver something
consumers don’t need
Consumers may not know what
they want

25. Major types of businesses: Not for Profit
Organizations that provide
goods and services
without having a profit
motive, these are also
called nonprofit
organizations
Vision: A just world
without poverty
Ownership: It belongs to no
private person and no one
person controls the
organization. The assets of a
nonprofit are irrevocably
dedicated to the charitable,
purposes of the organization.
Control: Control of a
nonprofit is exercised by a
governing board of directors
or trustees.
Accountability: Nonprofit
organizations are accountable
to the public and must file
annual information returns.

26. Major types of businesses: Good Producing
Companies that create value by making “things,”
most of which are tangible
Vision: Develop innovative technologies and efficient
processes that create new markets, enrich people's
lives

27. Major types of businesses: Services
Companies that create value by performing activities
that deliver some benefit to customers
Vision: to embrace the human spirit and let it fly

28. Risk and Reward of Business

29. Risk and Reward of Business
Source: Bovee, et al (2013)

30. Functional Areas of a Business
Source: Bovee, et al (2013)

31. Evolution of Business
Pre-Industrial Revolution Industrial Revolution
Characterised by hand
production methods and
significant labour intensity
The transition to new
manufacturing processes
with increasing adoption of
steam powered boats,
ships and railways..

32. Evolution of Business
Post-Industrial Revolution Technological/Knowledge
Period of which the service Era
sector generates more
wealth than the
manufacturing sector in the
economy
Technological and
knowledge based work
dominate the business
landscape

33. Essential work for next week
• Please consult the OLE for details of:
– Essential readings*
– Seminar/workshop preparation work*
– Recommended further readings
– Any additional learning
* Essential readings and preparation work must always be completed in time
for the next session
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34. Appendix – Sources for illustrations
Slide 7:
www.uchicago.edu
Slide 8:
www.dancingczars.wordpress.com
Slide 9:
www.list25.com
Slide 10:
www.bloomberg.com
Slide 12:
www.twitter.com
Slide 14:
www.cartoonwork.com
Slide 15:
www.unilever.com
Slide 16:
www.ted.com
Slide 18:
www.artbybeckychristenson.com
Slide 19:
Nestle, Google, Apple, Spotify websites
Slide 20:
Spotify, Ed Sheeran, Coldplay and Mr Probz
websites
Slide 23:
www.oxfam.com
Slide 24:
www.samsung.com
Slide 25:
www.virginatlantic.com
Slide 29:
www.webs.org
Slide 30:
www.computerbasicsbook.com

35. End of presentation
© Pearson College 2013