2104 Semester 100 Pengantar Bisnis & Manajemen (MM) 1-6

8/10/2019 2104 Semester 100 Pengantar Bisnis & Manajemen (MM) 1-6

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Agung AWS Waspodo, SE, MPP

Magister Manajemen, FE-UNJ

16 April 2014


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The Meaning of BusinessOrganization that provides goods and services to earna profit (the difference between revenues andexpenses).

Factors to consider in running a business:

Consumer Choice & Consumer Demand

Opportunity & Enterprise Quality of Life


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Evolution of Business * The Factory System

(Industrial Revolution) Mass-Production

Specialization of labor Laissez-faire

(Entrepreneurial Era) Minimum governmental

intervention

Monopoly The Production Era

(Scientific Management) Productivity improvement

Manufacturing efficiency

The Marketing Era Identifying consumer wants

Satisfying consumer wants

The Global Era Communicating with

consumer

Globalized resources &productions

The Information Era Massif and extensive use of

internet

Equal opportunity forsmaller business


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Factors of ProductionResources used in the production of goods and services toachieve business goals:

1. Labor:physical and mental capabilities of human resourcescontributing in the economic production,

2. Capital:funds needed to create and operate a businessenterprise,

3. Entrepreneurs:individuals who take the risks &opportunities in creating and operating a new business

venture,4. Physical Resources (land):tangible items that organizations

use in conducting their business,5. Information Resources (knowledge):data and other

information used to extend business operations.


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Types of Economic SystemEconomic systemis the approach to manage factorsof production in an economy such as:

1. Planned Economy:an economy that relies on acentralized government to control all or most factorsof production and to make all or most production &

allocation decisions,2. Market Economy:an economy in which individuals

control production & allocation decisions throughsupply and demand.


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Demand & Supply

In a Market EconomyMarket economy is a mechanism for exchangebetween buyers and sellers of a particular good orservice that consists of:

1. Input Market:market in which firms buy resourcesfrom supplier households,

2. Output Market:market in which firms supplygoods and services in response to demand on thepart of households.


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rcu ar ow n a ar eEconomy*

FIRMSSupply Products

Demand Resources

HOUSEHOLDSDemand ProductsSupply Resources

OUTPUT MARKETSGoods

Services

INPUT MARKETSLabor

CapitalEntrepreneurs

Physical Resources

Information Resources


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Who Are Managers?A manageris someone who coordinates and overseesthe work of other people so that organizational goalscan be accomplished. Managers are classified intolevels:

1. Top Managers

2. Middle Managers3. First-Line Managers


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Levels of Managers (UTS)

1. Top Managers:responsible formaking strategic decisions andestablishing the plans & goals thataffect the entire organization.

2. Middle Managers:manage thework of first-line managers and mayhave titles (regional, project, store,or division),

3. First-Line Managers:manage thework of non-managerial employeeswho are involved in producingorganizations products or servingorganizations customers,

Top

Middle

First Line

Non-

Managerial


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What is Management? *Management is what managers do that involvecoordinating and overseeing the work activities ofothers so that their activities are completed effectively& efficiently.

Effectiveness:

Goal Attainment

Efficiency:

Resource Usage

High Attainment Low Waste

Management strives for:

High Goal Attainment & Low Resource Waste


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What do Managers do?1. Management Functions:Planning, Organizing,

Leading, and Controlling,

2. Management Roles:Interpersonal, Informational,and Decisional,

3. Management Skills:Conceptual, Human-Relation,Technical,

4. Changes Affecting Managers Job:ChangingTechnology, Changing Security Threats, IncreasedEmphasis of Organizational & Managerial Ethics,Increased Competitiveness.


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What is Organization?Organization is a deliberate arrangement of peopleto accomplish some specific purpose with 3 commoncharacteristics:

1. A distinct purpose,

2. Composed of people,

3. Develop some deliberate structure within whichmembers do their work.


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Why Study Management?1. The Universality of Management:it is needed in

all organizational areas, all sizes of organizations, alltypes of organizations, and at all organizationallevels,

2. The Reality of Work:once you graduated fromuniversity you will either manage or be managed,

3. Rewards & Challenges of Being a Manager:management can be a tough and often thankless job,yet it can be rewarding.


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23 April 2014


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Organizational BoundariesOrganizational boundaryis that which separatesthe organization from its environment.

External environmentis everything outside anorganizations boundaries that might affect it. It is nota single entity but rather multiple environments.


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Multiple Organizational Environment

Business

Organization

Technological

Environment

Sociocultural

Environment

Business

Environment

Emerging

Challenges

Global

Environment

Political-Legal

Environment

Economic

Environment

E i G th A t


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Economic Growth, Aggregate

Output & Standard of Living &ECONOMIC ENVIRONMENT

A market-based economy have 2 key goals:1. Economic Growth

2. Economic Stability

Economic Growth follows a pattern of Business Cycleshort-term ups (expansion) and downs (contraction) in an economy.

Economic Growth is measured byAggregate Outputwhich isthe total quantity of goods & services produced by an economicsystem during a given year,

When output grows more quickly than the population then output per-

capita increases and the system provides relatively more goods and servicesthat people want; thus a higher Standard of Living.

Standard of Livingis the total quantity and quality of goods & services thata countrys citizens can purchase with the currency used in their economicsystem.


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Economic StabilityECONOMIC ENVIRONMENT

A condition in an economic system in which theamount of money available and the quantity of goods& services produced are growing at about the samerate.

Two common problems facing stability:

1. Inflation:occurrence of widespread price increasesthroughout an economic system,

2. Unemployment:level of joblessness among peopleactively seeking work in an economic system,


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Product & Service Technologies*TECHHNOLOGICAL ENVIRONMENT

Product & Service Technologies(PST) are thetechnologies employed for creating products forcustomers.

A big challenge for PST in decreasing cycle-timewhich is the time from beginning to the end that it

takes a firm to accomplish some recurring activity orfunction.


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Business Process Technologies*TECHNOLOGICAL ENVIRONMENT

Business Process Technologies(BPT) are thetechnologies employed to improve a firmsperformance of internal operations such as;accounting, MIS flows, activity reports.

BPTis a large-scale information system for organizing

and managing a firms processes across product lines,departments, and geographic locations.


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Customer Preferences & TastesSOCIOCULTURAL ENVIRONMENT

Customer Preferences & Tastes1. Vary both across & within national boundaries

2. Change over time

3. Influenced by sociocultural factors

Sociocultural Environmentare conditions includingcustoms, mores, values, and demographiccharacteristics of the society in which an organizationfunctions.


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Ethical Compliance &

Responsible Business BehaviorSOCIOCULTURAL ENVIRONMENT

Rapid changes in business relationships,organizational structures, and financial f lows poseunsurpassed difficulties in keeping accurate track of

companys financial position.

Stakeholdersare entitled to a fair accounting so they

can make personal and business decisions.


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Redrawing Corporate BoundariesBUSINESS ENVIRONMENT

To stay competitive, firms are redrawing traditionalorganizational boundariesas they join together withother companies, even with competitors, to develop

new goods & services.

Some of these relationships are permanent, but othersare temporary alliances.

Most successful companies are getting leaner byfocusing on their Core Competencies; which areskills & resources with which an organizationcompetes best and creates the most values for owners.


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Emerging Challenges & Opportunities

in the Environment of Business *BUSINESS ENVIRONMENT1. Outsourcing:strategy of paying suppliers and

distributors to perform certain business processes or

to provide needed materials or resources.

2. Viral Marketing:strategy of using the internet andword-of-mouth marketing to spread productinformation.

3. Business Process Management:approach bywhich firms move away from department-orientedtoward process-oriented team structures.


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16 April 2014


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The Importance of Small

Business*Small Businessare independently ownedandmanagedbusiness that does not dominate its market.Small business have impacts on an economic system:

1. Job Creation:small firms hire at a faster rate, but are also likely tocut jobs at a far higher rate,

2. Innovation:small firms have the flexibility to generate innovationand reach the consumer,

3. Importance to Big Business:small firms carry big businessesproducts to their customers.


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Popular Areas of

Small Business EnterpriseSmall businesses tend to cluster around theseindustries:

1. Services

2. Construction

3. Finance & Insurance

4. Wholesaling5. Transportation & Manufacturing


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Distinction Between

Entrepreneurship & Small Business

Small Businessesare firms with a set of goals butwith no plans to grow and expand.

Entrepreneursare people who assume the risk ofbusiness ownership with a primary goal of growth and

expansion.


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Entrepreneurial Characteristics*Some common characteristics of entrepreneurs:

1. Resourcefulness,2. Concern for good customer relations,

3. A strong desire for control of life and business,

4. Able to deal with uncertainty and risk,

5. Open-minded leader who relies on network,business plans, and consensus,


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Crafting a Business PlanA business planis a document in which theentrepreneur summarizes his or her business strategyfor the proposed new venture & how that strategy will

be implemented; composed of:

1. Setting Goals & Objectives

2. Sales Forecasting3. Financial Planning


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Starting the Small Business (UTS)

The first step to start a small business start with theindividuals commitment to becoming a businessowner; through such ways as:

1. Buying an existing business,

2. Starting from scratch while defining:a) Who are my customers?

b) Where are they?

c) At what price will they buy my product?

d) In what quantities will they buy?

e) Who are my competitors?

f) How will my product differ from those of my competitors?


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Financing the Small Business

and Franchising1. Venture Capital Companies:group of small

investors who invest money in companies with rapidgrowth potential.

2. Small-Business Investment Company (SBIC):government-regulated investment company thatborrows money from Small Business Administration(SBA) to invest in or lend to small businesses.

3. Franchise:arrangement in which buyer (franchisee)purchases the right to sell good or services of theseller (franchisor/er) for a franchise-fee.


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Trends of Small Business

Start-UpsFive factors that propels small business:

1. Emergence of e-commerce

2. Crossovers from Big Business: small businesses that arecreated by people who left big corporations,

3. Opportunities for Minorities & Women

4. Global Opportunities5. Better Survival Rates


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Reasons for Failure & Success *

Four common reasons for failure:1. Managerial incompetence or inexperience,

2. Neglect,

3. Weak control system,

4. Insufficient capital,

Four common reasons for success:

1. Hard work, drive, and dedication,

2. Market demand are being provided,

3. Managerial competence,

4. Luck (?)


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Sole Proprietorships, Partnerships

& Corporations1. Proprietorship:personal unlimited liability,

personal unrestricted management, personal sourcesof investment,

2. Partnership:personal unlimited liability,unrestricted management based on agreement,personal by partners sources of investment,

3. Corporations:capital invested liability, undercontrol of board of directors selected bystockholders, purchase of stock investment.


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The Corporate Entity, Types,

and Managing a CorporationCorporationis a business that is legally considered anentity separate from its owners and is liable for its owndebts; owners liability extends to the limits of their

investments.

Types:examine Table 4.2(page 109)

Managing a corporation must be done by people who

understands the principle of corporate governancethat is the roles of shareholders, directors, and othermanagers in corporate decision making &accountability.


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14 Mei 2014


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Types of Strategy1. Corporate Strategy:strategy for determining thefirms overall attitude toward growth & the way it willmanage its businesses or product lines,

2. Business(Competitive) Strategy:strategy at thebusiness or product-line level that focus on a firmscompetitive position,

3. Functional Strategy:strategy in specific areas onhow best to achieve corporate goals throughproductivity.


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Setting Business GoalsAn organization functions systematically because itsets goals and plans accordingly. An organizationcommits its resources on all levels to achieving its

goals for the purpose of:

1. Provides direction & guidancefor managers at all levels,

2. Helps firms allocate resources,

3. Helps to define corporate culture,

4. Helps managers assess performance.


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Formulating Strategy (UTS)Creation of a broad program for defining and fulfilling an

organizations goals.

1. Set strategic goals:long-term goal derived directly from a firms missionstatement,

2. SWOT Analysis:

2.a. Analyze the organization(S & W): analyzing the firms strengths andweaknesses,2.b. Analyze the environment(O & T): scanning the businessenvironment for opportunities & threats.

3. Matching the organization and its environments: takes risks or beconservative.

4. Formulate strategy:4.a. Strategic Plans:resource allocation, firms priorities, steps to meetstrategic goals,4.b. Tactical Plans: short-range plans concerned with implementing firmsstrategic plans,4.c. Operational Plans: setting short-term targets for daily, weekly, ormonthly performance.


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Contingency Planning

and Crisis ManagementContingency planningis identifying aspects ofbusiness or its environment that might entail changesin strategy.

Contingency planningis planning for change as itseeks to identify in advance important aspects of abusiness or its market that might change.

Crisis managementis the organizations methods fordealing with emergencies that require immediateresponse.


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Levels & Areas of ManagementLevels of Management1. Top Managers:manager responsible to the board of directors &

stockholders for a firms overall performance and effectiveness,

2. Middle Managers:manager responsible for implementing thestrategies, policies, and decisions made by top managers,

3. First-Line Managers: manager responsible for supervising the work

of employees.

Areas of Management1. Human Resource

2. Operations3. Marketing

4. Information

5. Financial

6. Other

Technical Human Relations


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Technical, Human Relations,

Conceptual, Decision Making, and

Time Management Skills (UTS)Skills needed to become an effective and successfulmanager:

1. Technical:skills needed to perform specialized tasks,

2. Human Relation: skills in understanding and getting along withpeople,

3. Conceptual: abilities to think in the abstract, diagnose and analyze

different situations, and see beyond the present situation,4. Decision Making: skills in defining problems and selecting the bestcourses of action,

5. Time Management: skills associated with the productive use oftime.


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Management Skills

for the Twenty-First Century1. Global Management Skills:the need to

understand

Foreign Markets Cultural Differences

Foreign Rivals

2. Management & Technology Skills

Communicating the Culture


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Communicating the Culture

and Managing Change

Corporate cultureinfluences managementphilosophy, style, and behavior:

1. Managers must have a clear understanding of the culture,

2. Managers must transmit the culture to others in the organization,

3. Managers can maintain the culture by rewarding and promotingthose who understand it and work toward maintaining it.

Managing changeis a must when a corporate needs tochange its culture through three stages:

1. Decide at the highest level that change is the most effective responseto its problems: conflict & resistance,

2. Top management begins to formulate a vision of a new company,

3. The firm sets up new system for appraising & compensatingemployeeswho enforce the firms new value.


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21 Mei 2014


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What is Planning?Planning involves:

1. Defining organizations goals,2. Establishing strategiesfor achieving those goals,

3. Developing plansto integrate & coordinate workactivities

Its concerned with both ends (what) and means(how).


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Why Do Managers Plan?

Purposes of PlanningSince planning take a lot of effort, then planning isnecessary because:

1. Provides direction,

2. Reduces uncertainty,

3. Minimize waste & redundancy,

4. Establishes the goals of standards used incontrolling,


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Planning & Performance (UTS)Is planning worthwhile?

Although the relationship between planning andperformance is generally positiverelationships, we cantsay that organizations that formally plan alwaysoutperform those that dont plan.

What can we conclude?

1. Formal planning is associated with positive financial results,

2. Doing a good job in planning & implementing those plans generatehigh performance3. when performance was not high, the external environmentoften was

the culprit,4. Planning-performance relationship seems to be influenced by the

planning time-frame(4 years of planning is required before it beginsto affect performance).


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The Role of Goals & Plans in Planning

Goals(objectives) are desired outcomes or targets.They guidemanagement decisions and form thecriteriaagainst which work results are measured:1. Stated Goals:official statements of what an organization says its

goals are,

2. Real Goals:goals that an organization actually pursues, asdefined by the actions of its members.

Plansare documents that outline how goals are going

to be met that includes resource allocations,schedules, and other necessary actionstoaccomplish the goals.


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Types of Plans

Types of plans in an organization are described in terms of:

1. Breadth:a. Strategicplans that apply to an entireorganization & establish

its overallgoalsb. Operationalplans that encompass a particularoperational

area of an organization2. Time-frame:

a. Long-termplans with a time frame beyond threeyearsb. Short-termplans covering one year or less

3. Specificity:

a. Directional plans that can have severalinterpretationsb. Specific plans that leave no roomfor interpretation

4. Frequency of Use:a. Single-use plans that are used only onceb. Standing plans that are used multipletimes


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Approaches to Establishing Goals

Traditional goal settingincludes goals set by topmanagers flow down through the organization andbecome sub-goals for each organizational area.

Instead of the above, many organizations useManagement-by-Objective(MBO) as a process ofsetting mutually agreed upon goals and using thosegoals to evaluate employee performance.

For steps of MBO see Exhibit 7-3, page 166.


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Developing PlansThe process of developing plans is influenced by 3contingency factors & by the planning approachfollowed:

1. Organizational level:top to first-line paralleled with strategic tooperational planning

2. Degree of environmental uncertainty:when uncertainty is high,

plans should be specific but flexible3. Length of future commitments:plans should extend far enough to

meet the commitments made when the plans were developed


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Criticism of Planning (UTS)

Some critics that have challenged some basicassumption of organizational planning:

1. Planning may create rigidity,2. Plans cant be developed for a dynamic environment,

3. Formal plans cant replace intuition & creativity,

4. Planning focuses managers attention on todays

competition, not on tomorrows survival,5. Formal planning reinforces success, which may lead to

failure,

6. Just planning isnt enough.


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Effective Planning in

Dynamic EnvironmentIn an uncertain environment, managers should developplans that are specific but flexible.

Managers should recognize that planning is an ongoingprocess and managers should be ready to change directionsif environmental conditions warrant.

Making the organizational hierarchy flatter helps makeplanning more effective in dynamic environments.


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Magister Manajemen, FE-UNJ28 Mei 2014


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Step.1 Identifying a Problem

Every decisions start with a problem, that is adiscrepancy between an existingand a desiredcondition.


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Step.2 Identifying Decision Criteria

Once a problem has been identified, a manager mustidentify the decision criteriathat are important orrelevant to resolving the problem.

Step 3 Allocating Weights to the


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Step.3 Allocating Weights to the

Criteria

If the relevant criteria arent equally important, thedecision maker must weight the itemsin order togive them correct priority in the decision.

Steps. 4-8


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p

Developing, Analyzing, Selecting, Implementing

the Alternatives, and Evaluating Decision

Effectiveness (UTS)

4. Listing all viable alternatives that could resolve theproblem,

5. Evaluating each of the alternatives,6. Choosing the best alternative,

7. Put the decision into action,

8. Evaluating the outcome or result of the decision to seeif the problem was resolved.

Types o Decisions &


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Types o Decisions &Decision Making Conditions1. Structured Problems & Programmed Decisions

a) Structured Problem:a straightforward, familiar, and easily definedproblem,

b) Programmed Decision:a repetitive decision that can be handledusing a routine approach.

2. Unstructured Problems & Non-programmed Decisionsa) Unstructured Problem:a problem that is new or unusual and for

which information is ambiguous or incomplete,b) Non-programmed Decision:a unique and non-recurring decision

that requires a custom-made solution.

Decision Making Conditions:

1. Certainty:a situation in which a decision maker can make accuratedecisions because all outcomes are known,2. Risk:a situation in which a decision maker is able to estimate the

likelihood of certain outcomes,3. Uncertainty:a situation in which a decision maker has neither

certainty nor reasonable probability estimates available.

Linear-Nonlinear


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Linear Nonlinear

Thinking Style Profile (UTS)

Your thinking stylereflects the source ofinformation you tend to use and how you processthat information:

1. Linear Thinking Style:a preference for usingexternal data and facts and processing these throughrationaland logical thinking,

2. Non-Linear Thinking Style:a preference for usinginternal source of information (feelings & intuition)and processing these through internal insights,feelings, and hunches.

Decision Making Biases & Errors


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Decision Making Biases & ErrorsSee page. 149

1. Overconfidence2. Immediate gratification:tendency for quick results,

3. Anchoring effect:set a starting point but fail to adjust to newinformation,

4. Selective perception5. Confirmation:seek information to justify past choices and

disregard contradictions6. Framing:select and highlight certain aspects and disregard others,7. Availability:tendency to remember events that are most recent,8. Representation:tendency to see how closely it resembles other

events,9. Randomness:trying to create meanings out of randomness,

10. Sunk costs:current choices can correct the past,11. Self-serving:quick to take credit of success and blame others for

failure,12. Hindsight:falsely believe that they could have accurately predicted

the outcome after it is actually known.

Overview of Managerial


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O e e o a age a

Decision Making

Refer to exhibit 6-12, page. 151

Effective Decision Making


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g

in Todays World

1. Understand cultural differences,

2. Know when its time to call it quits,

3. Use an effective decision-making process,4. Build an organization that can spot the unexpected

and quickly adapt to the changing environment.

2104 Semester 100 Pengantar Bisnis & Manajemen (MM) 1-6

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