Business and Management

1.1
Introduction to business management
Business Functions
Primary, Secondary, Tertiary and Quaternary Sectors.
 Focus Question

What are the major functions of

a business?
 Business Functions
 What are the four vital functions that a
business must have to operate
effectively?
1. Production
2. Marketing
3. Finance
4. Human Resources (Personnel)
 1. Production / Operations
 What is this department responsible for?
 The process of converting raw materials into finished
goods or services, for the customer.

Finished
Raw Goods
Materials Customer
Or
Services

 Who can give an example of this process?

 Production / Operations
 So…who is in charge or responsible for the production department?
 The Production manager. 
 What are some of his/her tasks or duties?
1. Determine how the good or service will be manufactured or
delivered.
2. Determining what resources are needed for production.

3. Planning the timescale of production.

4. Stock management and control

5. Performing quality control

6. Arranging delivery of product to customer

7. Meeting production targets and deadlines

8. Conducting research and development (R&D)

 The production manager’s role is a vital one.
 Poor planning and control may lead to a delay or halt in production and
this could cost the company a lot of money.
 2. Marketing
 What is the marketing department responsible for?
 They are responsible for identifying and satisfying
consumer wants and needs.
 They are also responsible for making sure that
the company’s products sell.
 How can the marketing department ensure that the
firm’s products sell?
 This is done by conducting market research, test
marketing, packaging, and advertising.
 So…any guesses about what the major functions of
the marketing department are?
 Marketing
 The Four P’s of Marketing:
1. Product: making sure that goods and services meet the
customer's requirements
 Size,
 color,
 packaging,
 core functions,
 market research,
 branding, and
 product development.
2. Price: finding the correct pricing method to sell the
product
 Depending on level of demand
 Number of substitute products and
 Cost of production.
 Marketing
 The Four P’s of Marketing:
3. Promotion: making sure customers know
about the product.
 Using mass media; TV or newspapers.

 Sales promotion

 Special donations

 Free samples

4. Place: making sure goods and services are

in convenient places for consumers to
purchase.
 Must select the right location, location,

location to distribute products to the

marketplace.
 3. Finance

 What is the finance department in charge of?

 Managing the organization’s money $$$$$

 What must the financial manager ensure?

 They must ensure that accurate recording
and reporting of financial documentation
takes place.
 They must comply with legal requirements.
4. Human Resources / Personnel
 What is the human resources department
responsible for?
 They are responsible for managing the personnel of
the organization.
 What are they likely to deal with when
managing people?
 Workforce planning
 Recruitment
 Training
 Appraisal
 Pay and benefits
 Equal opportunities
 Health and safety concerns
 Fostering working relations
Business Sectors
Focus Question

What are the major sectors of

a business?
 1. Primary Sector
 What is the primary sector involved with?
 The extraction, harvesting, and conversion of land.

 Using natural resources as factors of production.

 Agriculture, fishing, mining, forestry and oil

extraction.
 Less economically developed countries rely heavily on
farming.
 In more economically developed countries, rely on
machines and automation.
 As economies develop, there is less reliance on the
primary sector in terms of employment and national
output.
 2. Secondary Sector
 What is the secondary sector involved in?
 They are involved in using raw materials and other
resources for the manufacturing of products.
 Can you give an example of this?
 What are some other businesses in this sector?
 Construction firms
 Pharmaceutical companies
 Clothes manufacturers
 Publishing firms
 Electronic manufacturers
 Energy production companies
 The output is then sold to the customers.
 3. Tertiary Sector
 What is the tertiary sector involved in?
 They are involved in providing services to their private and
corporate customers.
 Can you provide an example of this?
 Borrowing a book from the library, nothing is produced
here, they are just offering a service.
 This sector is also know as what?
 The service sector.
 Can you list some examples of industries in this sector?
 Retailing
 Education
 Travel and tourism
 Entertainment
 Insurance
 Transport
 Banking and finance
 Healthcare and catering
4. Quaternary Sector
Changes in the Economic Structures

 The proportions of the labour force in the

different sectors of the economy vary
according to the level of economic
development.
 A drop in the percentages of population working in
the primary and secondary industries does not
necessarily mean that outputs in these sectors are
falling. The changes in employment are often due
to technical changes which have greatly increased
the productivity of labour, thus falling employment
has been accompanied by increased productivity.
Changes in the Economic Structures

 The percentages of the labour in the primary,

secondary and tertiary industries change as an
economy becomes more developed. In the earlier
stages of development there is a movement of
workers from agriculture to manufacturing
industries. As the incomes continue to rise, there is
an increasing demand for services of all kinds.
Improvements in productivity in the manufacturing
industries lead to a movement of workers to the
service industries.
Changes in the Economic Structures

 Shifts towards Tertiary Sector in the developed

countries may be due to:

1. Higher Household Incomes

2. More leisure time
3. Larger focus on customer relations
management
4. Increasing reliance on support services.
e.g. Aftersales services, advertising, market research
analysis, financial services etc.