CAMPUS KÖLN

CAMPUS MAINZ
CAMPUS POTSDAM

Business Operations

Session 1: Introduction to Business

Prof. Dr. Markus Raueiser

M. Najmaei, PhD
WISE 2021-22
Code of Conduct of CBS
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5. Compliance with lecturers' instructions, particularly with regards to orders to leaving the lecture room in the event
of violation of the guidelines

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1. Get to know each other
Introduce yourself and your expectations

Prof. Dr. Markus Raueiser

Professor of International Business and Economic Geography

Dean of International Business Department
Vice President for International Relations

University of Cologne
• Dept. of Economic and Social Research
• Dept. of Business Policy and Logistics
Copenhagen Business School
• Dept. of Operations and Management

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Outline

AGENDA TODAY SEMESTER PLAN

1. Introduction to Business
1. Course Objectives 2. Economics
3. Competitive Environment and Global Markets
2. Course Requirements 4. External Business Environment
3. Definition of Key Terms 5.
6.
Management Leadership and Motivation
Internal Environment
4. Basic Business Activity 7. Business Function Finance and Accounting
8. Mid- Term
5. Factors of Production 9. Business Function Marketing
10. Business Function Operations
6. Review and Preview 11. Business Function HR
12. Entrepreneurship
13. Business Ethics and CSR
14. Exam Preparation and Recap

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1. Course Objectives
Objectives of the course

Outline and discuss the

Understand key terms with
various business functions
respect to business and basic
business principles

Utilize basic business

approaches and tools to
Highlight emerging increase managerial
business trends and productivity (and be able
discuss relevant to give practical
economical and global examples)
issues. Debate organizational theories
.
and describe different
organizational approaches

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2. Course Requirements

Length
28 teaching hours

Workload
Approx. 90 hours (21 contact and 69 private study hours)

ECTS
ECTS-Credits: 3

Assessment
Final examination (100%)

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2. Course Requirements
Module: Introduction to business

Grading module

Introduction to Business Operations

Introduction to Business Law

50,00% 50,00%
But…:
If you pass one of the courses with 70%
and fail the other with 40%, the module
is still passed with a 55%!!!

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2. Course Requirements
Textbook

• Nickels, G., McHugh, J.M. &

McHugh, S.M. (2018/2022):
Understanding Business.
International Student Edition
Glasgow: McGraw-Hill Irvin.

• 2022 (ed. 13) Version

ISBN-13: 978-126604-322-2
• 2018 (ed. 12) Version :
ISBN-13: 978-126021-110-8

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2. Course Requirements
Further Textbooks

• Worthington, I. & Britton, C.

(2018/2014): The Business
Environment Harlow: Pearson
Education Limited.

• 2018 (ed. 8) Version

ISBN-13: 978-129217-436-5
• 2014 (ed. 7) Version :
ISBN-13: 978-027375-672-9

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2. Course Requirements
Recommended periodicals
Academy of Management Journal

Academy of Management Review

Administrative Science Quarterly

British Journal of Management

California Management Review

European Management Journal

Harvard Business Review
Journal of Management

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2. Course Requirements
Useful Websites
http://www.economist.com
http://www.dw.com
http://hbr.org/
http://www.harvardbusinessmanager.de
http://www.businessweek.com
http://www.forbes.com
http://www.handelsblatt.com
http://www.wiwo.de
http://www.nytimes.com/pages/business/index.html

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2. Course Requirements
Course Outline

Check the recent Syllabus

on the Moodle Platform
learn.cbs.de

Here you find the PDF slides

after the session as well

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3. Definitions of Key Terms
Main learning objectives
▪ Define and understand business key terms, e.g.:
▪ business
▪ goods
▪ services
▪ profit
▪ revenue
▪ cost
▪ stakeholders

▪ Describe and apply the basic business principle:

Transformation of input into output.

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3. Definitions of Key Terms
Key Terms

Business Non-Profit Organisation Goods

➢ An activity that seeks to provide goods ➢ An organization whose goals do not ➢ Tangible products such as computers,
and services to others while operating include making a personal profit for its food, clothing, cars, and appliances.
at a profit. owners or organizers.

Services Profit Revenue

Intangible products (i.e. products that can The amount of money a business earns ➢ The total amount of money a business
not be held in hands) such as health care, above and beyond what it spends for takes in during a given period by
education, insurance, recreation and salaries and other expenses. selling goods and services.
tourism.

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3. Definitions of Key Terms
Key Terms

Loss Cost Capital

➢ When a business‘s expenses are more
than its revenues.
➢ Expenses incurred from creating and
selling goods and services
(McDaniel/Gitman, 2009)
➢ Inputs, such as tools, machinery,
equipment, and buildings, used to
produce goods and services and get
them to the customer
(McDaniel/Gitman 2009)

Factors of Production Effectiveness Efficiency

➢ The resources used to create goods ➢ The extent to which organizational ➢ The extent to which the firm is able to
and services (=wealth): land, labour, objectives have been met (Butel et produce maximum outputs from the
capital, entrepreneurship, and al., 2007) lowest input level (e.g. people, raw
knowledge. material, money) (Butel et al., 2007)

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3. Definitions of Key Terms
Key Terms

Entrepreneur Stakeholder
➢ A person who risks time and money to ➢ All the people who stand to gain or
start and manage a business. lose by the policies and activities of a
business.

Outsourcing Business environment

➢ Assigning various functions, such as
accounting, production, security,
maintenance, legal work, to outside
organizations. (Contrary is
insourcing.)
➢ The surrounding factors that either
help or hinder the development of
businesses.

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3. Definitions of Key Terms
Deep- Dive: Stakeholders
Apple’s factories in China are breaking
A employment laws, audit finds;
Apple supplier Foxconn hit on poor working
conditions; Stockholders

Bankers Customers

Suppliers B Surrounding
A Community
Typical Business

Government (Leaders) Environmentalists

B Highest return
on investment
Vs.
Highest Salary Employees Retailers

Nickels / McHugh / McHugh (2008: 6)

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3. Definitions of Key Terms
Deep- Dive: Non-Profit Organization
▪ Non-profit or not-for-profit organization exist to
achieve some other goal than the usual business
goal of (personal) profit.
▪Non-profit organizations account for more than 28%
of economic activity in the U.S.

▪Government is the largest not-for-profit group.

✓independent, neutral organization
✓Founded in 1863
✓Humanitarian protection for victims of war and other situations of
violence
✓Based on international law
✓Ca. 97 million volunteers worldwide
✓Selected missions:
➢Sustainable water supply on Haiti
➢Raising mine awareness in Nepal
➢ Prisoner protection at Guantanamo Bay

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3. Definitions of Key Terms
Outsourcing and Offshoring

Outsourcing Offshoring
Outsourcing is the subcontracting or Offshoring is the process by which companies
contracting out of activities to organizations undertake some activities at offshore locations
instead of in their countries of origin.
that had previously been performed by the
firm.
(Luthans/Doh, 2009: 10) (Luthans/Doh, 2009: 10)

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3. Definitions of Key Terms
Outsourcing Example: Lufthansa

The Offshoring/Outsourcing Matrix or “make/Buy-Here/There

Lufthansa operation in Germany Lufthansa operation in Italy

Call Center in Turkey

Lufthansa give IT-infrastructure to IBM

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3. Definitions of Key Terms
Nature of business

Revenue − Cost = Profit

The money a company Expenses that a

earns from providing The money left
company incurs over after all
services from creating and
or selling goods to expenses are
selling goods and paid.
customers. services.

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4. Basic Business Activity
Transformation of inputs and outputs

• All business organisations are ultimately involved in the

transformation of inputs (resources) into outputs.

Business
Input Output Consumption
Organisation
(Materials, (Goods, Services, Ideas, etc.)
Labour,
Finance,
etc.)

Worthington / Britton (2006: 5)

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5. Factors of Production
Classical and additional factors
Potential sources of wealth
The classical factors:
• Land or natural resources
• Labour → workers
• Capital
• Incl. machines, tools, buildings
• Everything used for goods production (not money!)
Additional factors
– Entrepreneurship: willingness to take risk to start a
business for resource use
– Knowledge → most important factor?
• Revolutionizing of business
• Quick determination of wants and needs
• Response with desired goods and services

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5. Factors of Production
Example: ALDI

Land :Property for supermarkets and warehouses, etc.

Labour: Cashiers, storekeepers, administration staff, managers etc.

Capital: Shelves, lorries, groceries, supermarkets, etc.

Entrepreneurship: Foundation as a corner shop by Anna Albrecht

in 1913, takeover and expansion by her sons Karl and Theo from 1946
onwards

Knowledge: Market research to determine consumer preferences,

mass media as a source to discover competitors‘ offers

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Review and Recap
Be prepared for a brief recap each week

5 min
Review questions
Preview of next session

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Review and Recap
Review Questions

1. What is the difference between revenue and profit?

2. What groups are considered stakeholders, and which
stakeholders are most important to a business?
3. Which types of business do you know?

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Preview

Next Session will be on Sept 06 2021

We will deal with the following topic:

→ Introduction to Economics
Nickel, Ch. 2
The Economist: “The Big Mac index - Fast
food for thought”, Jul 30th 2011
(http://www.economist.com/node/21524873)

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