BUSINESS ADMINISTRATION

Buket Akdol, PhD

bakdol@istanbul.edu.tr
 Contents (Before Midterm)
• Business in general and related terms
• Business as an economical unit
• Business ethics and corporate social responsibility
• Forming a business and entrepreneurship
• Types of businesses
• Business Alliances and business in global markets
• Management as a business function
 Contents (After Midterm)
• Business Functions:
– Management
– Production and Operation
– Marketing
– Finance and Accounting
– Human Resources
BUSINESS IN GENERAL

Buket Akdol, PhD

bakdol@istanbul.edu.tr
What is Business?
 What is Business?
-delivering goods and services to the community
-to make a profit
-to serve the public without profit (nonprofit
organizations)

-an activity concerned with supplying and

distribution of commodities.
 Not-For-Profit Organizations
n Not-for-profit organizations are business-like
establishments that have primary objectives other
than profits.
n EX:???
n Although they place public service over profit
making, they still need money to achieve their goals

n These organizations are a major part of economy

What do people buy and sell?

‘ecomonic goods’
vs.
free goods
Economic good
-scarce
-businesses create utility

Utility: ability of a good to satisfy the needs and wants

-form utility (finished version)
-time utility
-place utility
-information utility
-possession utility
Why do people buy and sell?
 Why do people buy and sell?
-to satisfy existing needs and wants
There are always at least TWO MARKETS OR
MORE!

-an already satisfied need should be re-satisfied

over period
ÞBusiness is a never ending process
 Factors of Production
n Natural Resources: all production inputs
(agriculture, land, building sites, forest etc.)
n Capital: includes technology, tools,
information, and physical facilities.
n Human Resources: anyone who works for a
firm (physical labor and intellect)
n Entrepreneurship: the willingness to take risks
to create and operate a business.
What are the things that are
subject to exchange?
What are the things that are subject to
exchange?
Products:
-Goods: (tangible) bread, computer, pen,
book, car, building…
-Services: (intangible) healthcare, insurance,
entertainment, transportation, cleaning...
Business - Organization
 What is Organization
-Deliberately established groups of people
working together for a ‘common purpose’
such as companies, corporations,
associations, institutions, clubs, units, unions…

EXAMPLES FROM ON THE LINE: Ford, Fiat,

Renault, Worker Unions...
What are the purposes of
business organizations?
 Purpose of Business Organizations
-Profit (profit-seeking organizations)
-Revenue (not-for-profit –nonprofit- organizations)
-Sustainability
-Social Responsibility
 Purpose of Business Organizations
-Profit (profit-seeking organizations)
The differences between revenues collected for goods
and services and payments to create is a reward called
profit

-Revenue (not-for-profit –nonprofit- organizations)

They have revenues to cover their all or part of their
expenditures. They collect revenue for the basic purpose of
their being
EX/ I.U. as a not-for-profit organizations.
such as government agencies, labor unions,
institutions established in the form of foundations
 Purpose of Business Organizations
-Sustainability
The ability to exist constantly
Use sources to maintain operation
focuses on meeting the needs of present without compromising the ability of future
generations to meet their needs
3 pillars:
economic (profit),
environmental (planet),
social (people)
Today sustainability refers to the capacity for biosphere and human civilization to co-
exist
-Social Responsibility
Ethical theory focuses on actions of corporations must benefit to whole society
(not only to shareholders but to all stakeholders)
Balance between economic growth and welfare of society and environment

HOMEWORK: Discuss the responsibilities of businesses according to Milton Friedman’s

philopsophy and Agency Theory. What are the differences between those two approaches?
Who Is an Entrepreneur?
 Who Is an Entrepreneur?
- Business people
who take risks and
form businesses from scratch to provide goods or
services that the community needs,
While at the same time earning money as a reward.

-Profit is the stimulus of the entrepreneurs.

-Entrepreneurs first notice an opportunity in an

industry
Why people establish a business?

Characteristics of entrepreneurs…
 Characteristics of Entrepreneurs
- Being their own boss
- Having an internal locus of control
- Locus of control: degree of one’s belief on one’s own
skills and capabilities to create one’s own future
- Optimistic people
- Pessimists seek threats not opportunities
- People of vision
- People with Tolerance for Ambiguity and Failure
- Lower risk, face uncertainty, face failure without
discourage
- People with a need to Achieve
Who Is a Manager?
 Who Is a Manager?
-people who direct or manage the business
-someone who coordinates the work of other people so
that organizational goals can be accomplished:
-plan the things to be done
-organize resources
-lead people
-control performance
-person who combines all resources for accomplishing
the tasks:
-the resources to be employed
-the tasks to be completed
 Management Functions

• Planning: Defining goals, establishing strategies to

achieve goals, and developing plans to integrate and
coordinate activities
• Organizing: Arranging and structuring work to
accomplish organizational goals
• Leading: Working with and through people to
accomplish goals
• Controlling: Monitoring, comparing, and correcting
work
 Where Do Managers Work?

• Organization: a deliberate arrangement of people to

accomplish some specific purpose
 Characteristics of Organizations

Exhibit shows the three common characteristics of organizations: distinct purpose, deliberate
structure, and people.
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 What Do Managers Do?

• Management involves coordinating and overseeing

the work activities of others so that their activities
are completed efficiently and effectively.
 Efficiency and Effectiveness

• Efficiency: doing things right

– getting the most output from the least amount of
input
• Effectiveness: doing the right things
– attaining organizational goals

• EXAMPLES FROM ON THE LINE: ?

Efficiency and Effectiveness in
Management
 REFERENCES
• Mirze, S.K. (2002). Introduction to Business,
Literatür Publishing.

• Boone, L.E., Kurtz D.L (2011). Contemporary

Business, John Wiley & Sons.

• Robbins, S.P., Coulter, M. (2012).

Management, Pearson.