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GENERAL MANAGEMENT
CHECK POINT 6: BUSINESS ENVIRONMENT AND ORGANIZATIONAL CULTURE

This Check Point Is Available By Subscription Only,
But You Can Still Check Out The Menu Below.

1. what is a business environment?
2. the external Business environment
3. Economic Environment
4. Social Environment
5. Technological Environment
6. Competitive Environment
7. Global Business Environment
8. Importance Of Customers, Suppliers, And Banks
9. Laws And Regulations
10. the internal Business environment
11. human resources and management tasks
12. financial resources and management tasks
13. operational resources and management tasks
14. marketing resources and management tasks
15. what is Organizational Culture?
16. for serious business owners only
17. the latest information online
 

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GENERAL MANAGEMENT
CHECK POINT 6: BUSINESS ENVIRONMENT AND ORGANIZATIONAL CULTURE

Please Select Any Topic In Check Point 6 Below And Click.

1. what is a business environment?
2. the external Business environment
3. Economic Environment
4. Social Environment
5. Technological Environment
6. Competitive Environment
7. Global Business Environment
8. Importance Of Customers, Suppliers, And Banks
9. Laws And Regulations
10. the internal Business environment
11. human resources and management tasks
12. financial resources and management tasks
13. operational resources and management tasks
14. marketing resources and management tasks
15. what is Organizational Culture?
16. for serious business owners only
17. the latest information online
 

DO I NEED TO KNOW THIS CHECK POINT?

 

WELCOME TO CHECK POINT 6

TUTORIAL 1 General Management TUTORIAL 2 Human
Resources Management
TUTORIAL 3 Financial Management TUTORIAL 4 Operations Management TUTORIAL 5 Marketing
And Sales Management
1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96
2 7 12 17 22 27 32 37 42 47 52 57 62 67 72 77 82 87 92 97
3 8 13 18 23 28 33 38 43 48 53 58 63 68 73 78 83 88 93 98
4 9 14 19 24 29 34 39 44 49 54 59 64 69 74 79 84 89 94 99
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
 

HOW CAN YOU BENEFIT FROM CHECK POINT 6?

 
The main purpose of this check point is to provide you and your management team with detailed information about the Business Environment And Organizational Culture and how to apply this information to maximize your company's performance.
 
In this check point you will learn:
 
• About the basic elements of external business environment.
• About economic, social, technological, competitive, and global business types of environment.
• About the importance of customers, suppliers, and banks.
• About various laws and regulations which may affect your business.
• About the basic elements of internal business environment.
• About the importance of human resources and related management tasks.
• About the importance of financial resources and related management tasks.
• About the importance of operational resources and related management tasks.
• About the importance of marketing resources and related management tasks.
• About the basic elements of the organizational culture... and much more.
 

LEAN MANAGEMENT GUIDELINES FOR CHECK POINT 6

 
You and your management team should become familiar with the basic Lean Management principles, guidelines, and tools provided in this program and apply them appropriately to the content of this check point.
 
You and your team should adhere to basic lean management guidelines on a continuous basis:
 
Treat your customers as the most important part of your business.
Provide your customers with the best possible value of products and services.
Meet your customers' requirements with a positive energy on a timely basis.
Provide your customers with consistent and reliable after-sales service.
Treat your customers, employees, suppliers, and business associates with genuine respect.
Identify your company's operational weaknesses, non-value-added activities, and waste.
Implement the process of continuous improvements on organization-wide basis.
Eliminate or minimize your company's non-value-added activities and waste.
Streamline your company's operational processes and maximize overall flow efficiency.
Reduce your company's operational costs in all areas of business activities.
Maximize the quality at the source of all operational processes and activities.
Ensure regular evaluation of your employees' performance and required level of knowledge.
Implement fair compensation of your employees based on their overall performance.
Motivate your partners and employees to adhere to high ethical standards of behavior.
Maximize safety for your customers, employees, suppliers, and business associates.
Provide opportunities for a continuous professional growth of partners and employees.
Pay attention to "how" positive results are achieved and constantly try to improve them.
Cultivate long-term relationships with your customers, suppliers, employees, and business associates.

1. WHAT IS A BUSINESS ENVIRONMENT?

THE IDEAL BUSINESS ENVIRONMENT

Business owners and managers must become familiar with everything that surrounds their organization and develop an effective internal business environment and healthy organizational culture to succeed in a competitive business environment..

Wouldn't it be nice to wake up every morning and find a pile of cash neatly stacked on a silver platter next to your bed? And then the phone rings and you wake up! Sorry, this was only a wonderful dream...

THE REAL WORLD

In the real world every business organization operates within the confines of a specific environment. In fact, there are two types of Business Environment that you and your management team should be concerned with as illustrated below. Each type of business environment is examined in this check point.

TWO TYPES OF BUSINESS ENVIRONMENT

 

External
Business Environment

 

Internal
Business Environment

 

ADDITIONAL INFORMATION ONLINE

 
Business Environment By Tim Friesner.
The Internal And External Environment By Mark Brown.
The Global Business Environment By Matt Alanis, Alanis Business Academy.
U.S. Business Environment - Part 1 By Matt Alanis, Alanis Business Academy.
U.S. Business Environment - Part 2 By Matt Alanis, Alanis Business Academy.

2. EXTERNAL BUSINESS ENVIRONMENT

WHAT IS THE EXTERNAL BUSINESS ENVIRONMENT?

The External Business Environment consists of several elements outside of an organization which influence its development and performance in the marketplace.

As a business owner, you have no control over the external business environment and for this reason you and management team must become familiar with each type of environment, identify each critical element, implement lean management guidelines, and manage your organization accordingly to ensure successful business performance. Many business owners use PEST Analysis, or Political, Economic, Social, and Technological Analysis which represents an effective tool for evaluating various business environment factors.

FIVE TYPES OF EXTERNAL BUSINESS ENVIRONMENT

Economic Environment

Social Environment

Technological Environment

Competitive Environment

Global Business Environment

 
Each type of the external business environment is discussed in detail in this check point.
 

CRITICAL ELEMENTS OF EXTERNAL BUSINESS ENVIRONMENT

Customers

Suppliers

Banks

Laws And Regulations

 
Each element of the external business environment is also discussed in detail in this check point.
 

ADDITIONAL INFORMATION ONLINE

PESTEL Analysis By Tim Friesner.
The Business Environment By Berndt Meyer.
External Environment By Derek Burton, Burton, Inc.
Understanding The Firm's External Environment By Cal Miramar University.
The External Business Environment By Matt Alanis, Alanis Business Academy.

3. ECONOMIC ENVIRONMENT

WHAT IS ECONOMIC ENVIRONMENT?

Economic Environment represents one of the critical elements of the external business environment. Business owners must take into account a broad range of factors which may positively or negatively affect their organization's business performance.

Main Economic Environment Factors are summarized below.

ECONOMIC ENVIRONMENT FACTORS

Inflation Rate
Inflation rate may vary from low inflation to high inflation. Low inflation rate is considered good for business stability, while high inflation rate will cause businesses to become less competitive and profitable in the international marketplace. High inflation will also lead to reduced purchasing power by consumers and this will result in a lower demand for products and services.
Interest Rates
Interest rate is the rate which the borrower pays to the lender for the use of money during a specific period of time. Low interest rates are considered good for business stability. High interest rates cause a negative effect on consumer demand because it becomes more expensive to finance the purchase cost of products and services. High interest rates also lead to decreased business activities, since businesses have a reduced ability to finance their own purchases of necessary raw materials, parts, and services.
Labor Costs
Labor cost is the financial compensation paid by the business to an employee. The cost of labor plays a critical role in the ability of businesses to manufacture products and provide services in a cost-effective manner. The cost of labor is determined by the prevailing market forces in every country. In the U.S. employee compensation is subject to the Fair Labor Standards Act and other related laws.
Unemployment Rate
Unemployment rate represents a ratio between the number of unemployed people to the total number of people who are willing and able to work for compensation. High unemployment rate causes reduction of the consumer spending and this subsequently results in lower demand for products and services, and decreased level of sales and profitability generated by businesses in the marketplace.
Level Of Disposable Personal Income
The level of disposable personal income represents the amount of money that is available to consumers for purchasing products and services in the marketplace. The level of disposable personal income may vary as a result of the prevailing economic and political conditions and it may positively or negatively affect the overall market environment.
Taxes
Individuals and businesses are subjected to a broad range of taxes, imposed by federal, state, and local authorities. This includes income tax, social security tax, payroll tax, property tax, tax on products and services, estate tax, and various other taxes and contributions. The high level of taxation causes reduction of the disposable personal income level and this in turn causes reduction in the product and service demand in the market place.
Tariffs
Tariffs are taxes imposed by the government on imported products. Tariffs are designed to raise additional revenue for the government and regulate trade between various countries in different industries. Tariffs play an important role in the overall economic conditions in the country and development of economic trends in the marketplace. High tariffs will cause an increase in the cost of imported products and provide additional opportunities for local product and service providers.
 

ADDITIONAL INFORMATION ONLINE

 
PEST Analysis Explained By Mind Tools Video.
Business And External Factors By TV Choice Films.
The Economic Environment By Kurt Karl, Swiss Re.
Preparing For Growth By Louise Perry, Studio Talk TV.
The Economic Environment By Matt Alanis, Alanis Business Academy.

4. SOCIAL ENVIRONMENT

WHAT IS SOCIAL ENVIRONMENT?

Social Environment represents another critical element of the external business environment.

Social environment refers to people, their values, beliefs, and acceptable norms of behavior. Business owners must take into account a broad range of social environment factors which may affect their organization's performance in various markets. These factors are particularly important in developing effective operational strategies for the business organization in various consumer markets.

Main Social Environment Factors are summarized below.

SOCIAL ENVIRONMENT FACTORS

Geographic Factor
Geographic factor is based on the geographic segmentation variables, such as region, county size, city size, population density, and climate.
Demographic Factor
Demographic factor is based on the demographic segmentation variables, such as age, gender, family size, family life cycle, income, occupation, education, religion, race, and nationality.
Psychographic Factor
Psychographic factor is based on the psychographic segmentation variables, such as social class, lifestyle, and personality.
Behavioral Factor
Behavioral factor is based on the behavioral segmentation variables, such as purchase occasion, benefits sought, user status, usage rate, loyalty status, state of readiness to purchase, attitude toward product or service.
 

ADDITIONAL INFORMATION ONLINE

 
The Social Environment By Matt Alanis, Alanis Business Academy.
Integrating Social And Environmental Value By Clinton Global Initiative.
Sustainability: The Social Environment By Sherry Adams And Kevin Conner.
Project Management In The Social Media In HR By Steve Miranda, e-Cornell.
Create A Social Learning Environment By Molly Kihanya By Streaming Medias.
 

THE CYBER-ENVIRONMENT AND SOCIAL MEDIA

 
A new type of social environment has developed during the last decades and it provides unique opportunities to small business owners all over the world. This environment is called the Cyber-Environment or Cyberspace, also known as the Internet which exists on the World Wide Web.

Since the beginning of the 1990's the Internet has evolved into a major marketing vehicle for millions of businesses world-wide. In fact, the Internet became the most dynamic marketing and business environment at the end of the 20th century and it continues its exponential growth well into the 21st century.

Social Media became one of the most important and influential elements of the Internet and cyber-environment. According to various sources online, top ten most popular social media sites are presented below.
 
Rank Social Media
Networking Website
Estimated
Number Of Users
1. Facebook 1,300,000,000
2. Twitter 500,000,000
3. LinkedIn 200,000,000
4. GooglePlus+ 1,600,000,000
5. Pinterest 70,000,000
6. Tumblr 40,000,000
7. Flickr 32,000,000
8. VK 250,000,000
9. Instagram 150,000,000
10. DeviantArt 22,000,000
 
There are approximately 2.5 Billion Internet Users in the world at present and it is expected that about three billion people will be surfing the Internet in the very near future.

More details about the Wild-Wild-Web (WWW) are provided in Tutorial 5.
 

ADDITIONAL INFORMATION ONLINE

 
Social Media 2013 By Erik Qualman.
Social Media 2013 By Funky Marketing TV.
21st Century Social Media Trends By Roburo11.
The Social Media Web Revolution By Matt Feast.
Social Media In 2013 By Robert Lane Greene, The Economist.

5. TECHNOLOGICAL ENVIRONMENT

WHAT IS TECHNOLOGICAL ENVIRONMENT?

Technological Environment represents another critical element of the external business environment.

Various technologies have been developed and successfully implemented by many different industries in the recent years. These technologies produced a strong positive impact on the operational performance and profitability of many business organizations. Business owners must become familiar with specific technological developments related to their industry to ensure that their business organization will remain highly competitive in the marketplace.

Some of the important technological advances during the recent years include computers, computerized manufacturing processes, including NC machines and robotics, smart telecommunication and electronic devices, and various business software packages for small and medium-sized businesses. These products enable small business owners to become more efficient in various areas of operational activities, such as human resources, finance and accounting, operations, marketing and sales.

SOFTWARE PROGRAMS FOR SMALL AND MEDIUM-SIZED BUSINESSES

 

Accounting Software For Small Business
Accounting software is a data-base-driven computerized method of classifying, managing, and reporting financial information related to the organization’s status and performance to managers and shareholders. Accounting software includes various modules which deal with the specific part of accounting, such as accounts payable and accounts receivable, general ledger, billing, sales, purchases, inventory and much more.

Computer-Aided Design
Computer-aided design (CAD) is a process of using computers for the purpose of designing new products and modifying the existing ones. Various types of CAD software, used during the product design process, enable the designers to substantially increase the productivity of the entire design process and improve the overall quality of the design work. CAD also provides improved communication during the design process through documentation and available database.

Computer-Aided Manufacturing
Computer-aided manufacturing (CAM) is a process of using computers for the purpose of manufacturing a broad range of parts and products. CAM entails using suitable software for programming selected machines for specific manufacturing operations. CAM may also include automated selection of special tools during the manufacturing process. The prime purpose of CAM is to increase the product accuracy and efficiency during various manufacturing processes, to reduce waste, and ensure smooth operational flow in the manufacturing facility.

Computer Integrated Manufacturing (CIM)
Computer-integrated manufacturing (CIM) entails using computers in the manufacturing environment to control the entire production process. CIM facilitates exchange of relevant information between various manufacturing processes on a continuous basis. CIM usually operates in a closed-loop process control environment and provides real-time information to operators. CIM helps management to maximize efficiency and productivity of manufacturing processes and to increase the organization’s profitability.

Customer Relationship Management (CRM)
Customer relationship management (CRM) is a data-based software program designed to assist in managing the organization’s relationships with its existing and prospective customers. CRM is used primarily by marketing and sales managers and sales people who are involved in developing new marketing campaigns, generating new sales leads, maintaining current customers’ accounts, and providing after-sales service.

Email Marketing
Email marketing represents a very important direct marketing method which enables business owners to market their products and services by sending “opt-in” e-mails to current and prospective customers via Internet. Email marketing is to inform customers about existing and new products and services, to notify about special promotion details, to develop brand awareness and customer loyalty

Enterprise Resource Planning (ERP)
Enterprise resource planning (ERP) is an integrated management software system designed to plan various operational activities within an organization on a cross-functional basis. ERP software typically consists of multiple enterprise software modules that are available on individual basis, depending upon the organization’s specific requirements. Each ERP module is focused on one area of business processes, such as operations, accounting, inventory control, human resources, marketing and sales.

Executive Information System (EIS)
Executive information system (EIS) combines many features of management information systems (MIS) and decision support system (DSS). EIS provides top executives with immediate and easy access to essential business information, helps to identify critical success factors that are essential to accomplishing strategic objectives. EIS is also used by lower level managers, business analysts and other employees who are engaged in the decision-making and operational planning and control processes.

Information Technology (IT)
Information technology (IT) focuses on design, development, application, implementation, management, and support of computer-based information systems and data. The computer-based information is being used, distributed, stored, and transmitted for a wide range of business applications in the forms of audio, video, textual, and numerical data and is processed through the use of microelectronics and computers.

Management Information System (MIS)
Management information system (MIS) is a system designed to provide management with specific information to improve the organization’s performance. MIS focuses on gathering, processing, integrating and storing relevant data, both from inside and outside an organization. This data is constantly updated and made available to all employees within an organization who have the authority to access and use this data to meet organization’s objectives.

Manufacturing Resource Planning (MRPII)
Manufacturing resource planning (MRP II) is a comprehensive operational method for planning all resources within a manufacturing organization. The main purpose of the MRP II is to plan, monitor, and integrate various resources and functions of a manufacturing company including operations, purchasing, accounting, and marketing. The MRP II was designed to enhance the value of the MRP system by integrating main operational planning activities on a company-wide basis.

Online Marketing
Online marketing, also known as online advertising, focuses on promoting products and services directly to customers online, bypassing all traditional market distribution intermediaries. Online marketing became extremely popular recently and it may include search engine optimization (SEO), pay-per-click advertising (PPC), e-mail marketing, webinars, web banner advertising, social media advertising, and mobile advertising.

Search Engine Optimization (SEO)
Search engine optimization (SEO) is the process of improving a website’s ranking and visibility in organic or “natural” search in various search engines on an international or local basis. SEO is a key-word driven process and its success depends upon many variables, including the quality and speed of the website, the relevant content on each landing page, overall presence online, pro-active participation in social media, and third-party links (backlinks).

Social Media Marketing
Social media marketing represents a direct marketing method designed to increase the level of product and service sales by maximizing the website’s exposure online. Social media marketing uses a broad range of platforms online such as: Google and Google+, Yahoo, Facebook, Twitter, LinkedIn, Amazon, Yelp, Instagram, Foursquare, Pinterest, StumbleUpon, Delicious, AOL, Dig, Squidoo, Posterous, Webnews, Tumblr, Blogs and e-mails.

 

ADDITIONAL INFORMATION ONLINE

 
Technology For Environment By Intel.
Technological Environment By B2B Whiteboard.
Effect Of Information Technology On Environment By G. Moussan.
The Technological Environment By Matt Alanis, Alanis Business Academy.
The Impact Of Technology On The Environment By Joseph Juran, Juran Institute.

6. COMPETITIVE ENVIRONMENT

WHAT IS COMPETITIVE ENVIRONMENT?

Competitive Environment represents another critical element of the external business environment.

Business owners must take into account that they are not the only company which can provide customers with specific product and services in the marketplace. There are many Competitors who also try to sell their products and services to various customers in the same marketplace. Competitors constantly influence a broad range of managerial decisions related to routine business activities and to the development of an organization. Business owners and managers must ensure that the organization always adheres to Lean Management Guidelines and remains competitive by providing the best possible quality products or services to customers at the right price and the right time.

Harvard professor Michael Porter, author of several important business books, identified five competitive forces that shape a business strategy of business organizations in every industry. These forces include:

• Rivalry among existing competitors.

• Bargaining power of suppliers.

• Bargaining power of buyers.

• Threat of new companies who enter the existing market.

• Threat of substitute products and services

Competitors represent a significant factor in formulating the organization's marketing plan and adopting suitable product development, price-setting, promotion, and distribution strategies. It is essential, therefore, that you and your management team constantly monitor relevant trends in your specific marketplace in relation to competition in order to secure your company's survival and growth in a highly competitive business environment.

TWO IMPORTANT RULES RELATED TO COMPETITION

  • Rule No. 1: Business is all about competition.
  • Rule No. 2: If you want to succeed - you must always be "one step ahead"!
 

ADDITIONAL INFORMATION ONLINE

 
Business Competition By Marie Forleo.
Study Your Business Competition By Brian Tracy.
How To Deal With Competitors By Amanda Mock.
The Competitive Environment By Matt Alanis, Alanis Business Academy.
The Five Competitive Forces That Shape The Strategy By Michael E. Porter.

7. GLOBAL BUSINESS ENVIRONMENT

WHAT IS GLOBAL BUSINESS ENVIRONMENT?

Global Business Environment represents another critical element of the external business environment.

Global business environment must be of particular interest to business owners who are engaged in import or export of various materials and products and do business with customers and suppliers in different countries. These business owners must become familiar with the PESTLE Analysis which represents an effective tool for evaluating political, legal, economic, social, technological, and environmental factors to ensure successful business engagement with foreign customers and suppliers. Main global environment factors are presented in detail below.

GLOBAL BUSINESS ENVIRONMENT FACTORS (SOURCE: WIKIPEDIA)

Political And Legal Factors
Political and legal factors are usually interrelated and evaluated together. These factors refer to specific political conditions and legislation which prevail in a particular country or a geographic region. Political and legal factors provide strong indication regarding potential business opportunities in a selected country or a region. Evaluation and understanding of these factors will help business owners in identifying new international business opportunities.

Economic Factors
Economic factors include several important elements which describe the economic conditions in a specific country or a region. These factors include gross national product (GDP), income per person (per capita income), inflation rate, interest rates, labor costs, unemployment rate, level of disposable personal income, taxes, and tariffs. Evaluation of these elements will provide business owners with a better understanding regarding potential business opportunities in a selected country or a geographic region.

Social Factors
Social factors include several important elements which describe people, their values and habits, cultural, political and social preferences, acceptable norms of buying and selling behavior, special personal and commercial interests. Business owners must evaluate and understand each of these elements in order to develop effective strategies for building strong business relations with specific types of buyers and sellers in a selected country or a geographic region.

Technological Factors
Technological factors include several important elements such as usage of advanced technologies, computerized manufacturing processes, including NC machines and robotics, level of computerization, telecommunication, and usage of smart electronic devices and various business software programs. Evaluation of these factors will help business owners to get a better picture regarding potential business opportunities in a selected country or a geographic region.

Environmental Factors
Environmental factors include several important elements which describe the availability of energy, natural resources and means of transporting these resources, quality of air and water, and quality of human life in a particular country or a geographic region. Evaluation of these elements will provide business owners with a better understanding regarding potential business opportunities in a selected country or a geographic region.

 

ADDITIONAL INFORMATION ONLINE

 
Global Market Entry Strategies By Mark Wolters.
The Global Business Environment By Matt Alanis, Alanis Business Academy.
Globalization And Assessing Global Markets For Potential Entry By Mark Wolters.
The Global Context Of Business - Part 1 By Matt Alanis, Alanis Business Academy.
The Global Context Of Business - Part 2 By Matt Alanis, Alanis Business Academy.

8. IMPORTANCE OF CUSTOMERS, SUPPLIERS, AND BANKS.

CUSTOMERS

Customers represent the most important part of external business environment. According to Peter F. Drucker:

"The only valid purpose of a business is to create and satisfy a customer."

The identification of customers and their needs is the first step toward the survival of every organization. Customers are the ones who generate the need for products and services, thus initiating business interaction in the marketplace. Since their needs change over time, customers represent uncertainty to any organization. It is important, therefore, to ensure timely identification of customers' needs in order to exploit the opportunity of satisfying those needs at a profit. 

According to Lean Management Guidelines, it is essential to:

Treat customers with a genuine respect and as the most important part of the business.
Provide customers with the best possible value of products and services.
Identify and meet customers' requirements in a timely manner.
Provide customers with consistent and reliable after-sales service.
   
It is also essential to remember two important rules related to customers as presented below.
 

TWO IMPORTANT RULES RELATED TO CUSTOMERS

  • Rule No. 1: The customer is always right!
  • Rule No. 2: When the customer is wrong - use Rule No. 1!
 

ADDITIONAL INFORMATION ONLINE

 
Bad Customer Service Montage By Tmuka.
Tutorial About Customers And Jobs By Quickbooks 2013.
Dealing With Angry Customers By Jay Taylor, LearnCom Training.
2012 Smart CEO 100 Talk About Customers By Smart CEO Magazine.
Top Six Ways To Get An Angry Customer To Back Down By Myra Golden.

Business owners and managers need to be familiar with pertinent laws and regulations, which may relate to their specific industry, to ensure that their company strictly follows these laws.

SUPPLIERS

 
Suppliers represent another important part in the external environment which influences the development of the business organization.
 
Business owners and managers must constantly make decisions related to the purchase of raw materials, components, parts, and a broad range of finished products in the process of running routine business activities. Thus, the development and success of an organization depends upon establishing strong relations with suppliers to obtain required materials at the right price and at the right time. 
 
According to Lean Management Guidelines, it is essential to develop close relationships with suppliers to ensure a steady and uninterrupted operational process flow within the organization, to minimize level of inventory, and to ensure timely supply of goods and services to customers. For this reason you and your management team must treat your suppliers as genuine business partners, because their dependability and quality of their products or services will influence your company's ability to satisfy your clients' needs.
 

TWO IMPORTANT RULES RELATED TO SUPPLIERS

  • Rule No. 1: If your supplier is good - you look good!
  • Rule No. 2: If your supplier is bad - you don't look good!
 

ADDITIONAL INFORMATION ONLINE

 
How To Find A Good Chinese Supplier By Clint Steele.
Finding The Right Supplier By Alibaba.com Business Tips.
Finding Suppliers And Manufacturers By Alibaba.com Business Tips.
Communicating With Chinese Suppliers By Alibab.com Business Tips.
How To Find And Deal With Suppliers On Alibaba By e-Bay For Business.
 

BANKS

 
Banks and other financial institutions represent another key element in the external business environment. Banks play a significant role in the development of an organization by providing lines of credit, loans, and other financial services.
 
Once sufficient capital is obtained, the organization can activate the business process and proceed with its regular operational activities. It is very important, therefore, for business owners and managers to understand how to negotiate with various financial institutions in order to secure availability of capital for organizational growth.
 
Development of close relations with banks is of paramount importance to small and medium-sized companies which often experience shortages of funds and difficulty of obtaining additional finances.
 

TWO IMPORTANT RULES RELATED TO BANKS

  • Rule No. 1: Your bank may "give you an umbrella, when the sun is shining".
  • Rule No. 2: Your bank may "ask you to return the umbrella, when the rain begins!"

ADDITIONAL INFORMATION ONLINE

 
Financial Markets By Iken Edu.
Banks And Financial Institutions By Iken Edu.
How The Banking Industry Works By Mike Hewitt.
The Money System Explained By Strictly Revolution.
The Future Of Business And Banking Michael Geoghegan, HSBC.

9. LAWS AND REGULATIONS

ABOUT LAWS AND REGULATIONS

Whether you like it or not various government agencies are here to stay! These agencies play a constant and important role in our business lives and this is not likely to change! Federal, state, and local governments have introduced a broad range of Laws And Regulations which stipulate what business organizations can or cannot do. These laws and regulations are discussed in detail throughout this program and some of them are outlined below.

LAWS AND REGULATIONS WHICH MAY AFFECT YOUR BUSINESS

Equal Employment Opportunity Laws.
These laws provide guidance to employers regarding labor and employment legislation and are discussed in detail in Tutorial 2.

Compensation And Benefits Laws.
These laws provide guidance to employers regarding employee compensation and benefits and are discussed in detail in Tutorial 2.

Federal Laws Regarding Collecting Information And Providing References.
These laws provide guidance to employers regarding collecting information about applicants and new employees, and giving references to third parties about former employees. These laws are discussed in detail in Tutorial 2.

Federal Labor Laws.
These laws provide guidance to employers regarding labor unions and employment legislation and are discussed in detail in Tutorial 2.

Occupational Safety And Health Standards And Laws.
These laws provide guidance to employers regarding employee safety and health procedures in the workplace and are discussed in detail in Tutorial 2.

Employment Laws And Employee Layoff Procedures.
These laws provide guidance to employers regarding the process of employee separation and are discussed in detail in Tutorial 2.

The Immigration Reform And Control Act Of 1986.
This law provides guidance to employers regarding the employment process of employees who have legal authorization to work in the U.S. and is discussed in detail in Tutorial 2.

Internal Revenue Service (IRS).
The IRS provides guidelines for establishing various forms of business ownership, taxes and allowances, financial reporting, employee benefits, and retirement plans. The IRS guidelines are discussed in detail in Tutorial 3.

U.S. Laws Related To Marketing Practices.
There are numerous laws, which provide guidance to business owners regarding marketing and selling of products and services to consumers in the U.S. These laws and guidelines are discussed in detail in Tutorial 5.

Business owners and managers need to be familiar with pertinent laws and regulations, which may relate to their specific industry, to ensure that their company strictly follows these laws.

TWO IMPORTANT RULES RELATED TO LAWS AND REGULATIONS

  • Rule No. 1: Always respect and obey all federal, state, and local laws!
  • Rule No. 2: If you have any doubts - use Rule No.1
 

ADDITIONAL INFORMATION ONLINE

 
Health Care Laws Impact On Small Business By Joe Scarborough
Wage And Hour Compliance Essentials For Small Business By NFIBS.
E-Verify And I-9 Immigration Law Update For Small Business By NFIBS.
Hot Topics In Employment And Labor Law For Small Business By NFIBS.
The Difference Between Laws And Regulations By Yaron Brook, Ayn Rand Institute.

10. THE INTERNAL BUSINESS ENVIRONMENT

WHAT IS THE INTERNAL BUSINESS ENVIRONMENT?

In addition to the external environmental factors, organizational development depends upon the availability of certain elements within your company.

These elements constitute the Internal Business Environment of the organization as illustrated below. Each element of the company's internal environment plays a critical role in its performance and development.

MAIN ELEMENTS OF THE INTERNAL BUSINESS ENVIRONMENT

Human
Resources

 

Financial
Resource
s

 

Operational
Resources

Marketing
Resources

Organizational
Culture

ADDITIONAL INFORMATION ONLINE

Internal Environment Part 1 By Jacinta Chamberlain.
Internal Environment Part 2 By Jacinta Chamberlain.
Internal Environment Part 3 By Jacinta Chamberlain.
The Internal Organizational Environment By John Bradley.
Assessing The Internal Environment Of The Firm By Angelica Angelo Ocon.

11. HUMAN RESOURCES AND MANAGEMENT TASKS

HUMAN RESOURCES

Human Resources are of paramount importance to any organization. In fact, many business owners and managers agree that skilled, experienced, motivated, and loyal employees represent the biggest asset of every successful business organization.

The prime purpose of Human Resources Management, therefore, is to obtain, train, compensate, integrate, motivate, and manage employees within the organization to ensure cost-effective utilization of human resources.  Moreover, business owners and managers must be knowledgeable and well-prepared to carry out specific Human Resources Management Tasks to ensure a profitable long-term organizational performance.  Some of these tasks are summarized below.

HUMAN RESOURCES MANAGEMENT TASKS

1.

To familiarize with equal employment opportunity laws.

2.

To conduct job analysis for various jobs.

3.

To prepare job descriptions and job specifications for various positions.

4.

To plan and forecast employee requirements.

5.

To recruit and hire suitable new employees.

6.

To screen and test applicants.

7.

To interview applicants for employment.

8.

To provide orientation to new employees.

9.

To provide training to new and existing employees.

10.

To provide management development to management personnel.

11.

To motivate all employees, including management personnel.

12.

To provide basic job compensation to employees.

13.

To provide financial incentives to employees.

14.

To provide employee benefits to all personnel.

15.

To conduct employee performance appraisal.

16.

To maintain employee career management process.

17.

To maintain sound labor-management relations.

18.

To maintain acceptable employee safety and health procedures.

19.

To maintain effective employee conflict management and separation procedures.

 
Human Resources Management is discussed in detail in Tutorial 2.
 

ADDITIONAL INFORMATION ONLINE

 
The Role Of HR By Jack Welch.
Ten Best Practice HR Tips By Meet The Boss.
The Role Of Human Resources Today By Carl Camden.
Human Resources Management Lecture Part 1 - Introduction By Armin Trost.
An Introduction To Human Resources By Janice Leroux, Business Enterprise TV

12. FINANCIAL RESOURCES AND MANAGEMENT TASKS

FINANCIAL RESOURCES

Financial Resources are required by all organizations to provide for continuous operations and to fund the company’s growth. 

The prime sources of capital utilized by organizations include their own retained earnings, equity capital provided by shareholders, and debt capital provided by banks and other financial institutions.  Availability of sufficient capital is of prime importance since it enables the organization to fund all operational activities, offer more favorable payment terms to its customers, and obtain maximum discounts from suppliers.

 In addition, sufficient capital enables the organization to offer competitive salaries, wages, and employee benefits, thereby attracting a higher caliber of employees and management personnel. Furthermore, sufficient capital enables the organization to purchase modern equipment, thus ensuring higher operational efficiency and productivity.

The main purpose of Financial Management, therefore, is to plan, obtain, manage and control financial resources to ensure their effective utilization within the organization.  Moreover, business owners and managers must be knowledgeable and well-prepared to carry out specific Financial Management Tasks to ensure a profitable long-term organizational performance. Some of these tasks are summarized below.

FINANCIAL MANAGEMENT TASKS

1.

To be familiar with various types of accounting information.

2.

To develop and maintain a bookkeeping system.

3.

To prepare updated financial statements.

4.

To conduct a comprehensive financial performance evaluation.

5.

To prepare operating budgets.

6.

To prepare capital expenditure budgets.

7.

To prepare cash budgets.

8.

To develop and implement sound tax strategies.

9.

To identify and secure suitable sources of capital.

10.

To develop and implement an effective internal control and cash management system.

11.

To develop and implement effective control of purchases and disbursements.

12.

To develop and implement effective credit control.

13.

To develop and implement an effective inventory management system.

14.

To develop and implement an effective capital assets management system.

15.

To develop and implement an effective payroll accounting system.

16.

To develop and implement an effective cost accounting system.

17.

To develop and implement effective pricing methods.

18.

To develop and implement an effective management accounting system.

19.

To develop and implement an effective computerized financial management system.

 
Financial Management is discussed in detail in Tutorial 3.
 

ADDITIONAL INFORMATION ONLINE

 
Financial Resources By Udacity.
Financing With Small Business Loans And Grants By Greg Breukelman.
Managing Financial Resources And Decisions By Brighton School Of Business.
Family Finance: Resources For Small Business Startups By Cindy Runger Balas.
Finance: What Managers Need To Know By Joe Knight, Harvard Business Review.

13. OPERATIONAL RESOURCES AND MANAGEMENT TASKS

OPERATIONAL RESOURCES

Operational Resources may vary depending upon the specific nature of the company’s operational activities, such as service, merchandising, manufacturing, project, or contract management. For manufacturing companies, for example, these resources may include manufacturing equipment and tools, materials and spare parts inventories, production, assembly, storage, and distribution facilities, and vehicles. 

Operational resources are of particular importance to a manufacturing organization and usually require a substantial investment of capital. Acquisition, maintenance, and development of operational resources represent an integral part of operational activities. 

The main purpose of Operations Management, therefore, is to plan, obtain, manage, and control operational resources to ensure their effective utilization within the organization.  Moreover, business owners and managers must be knowledgeable and well-prepared to carry out specific Operations Management Tasks, depending upon the nature of the company’s activities, to ensure a profitable long-term organizational performance.  Some of these tasks are summarized below.

OPERATIONS MANAGEMENT TASKS

1.

To be familiar with various types of operational activities.

2.

To ensure effective design, location and organization of the operational facility.

3.

To develop and maintain an effective design office.

4.

To develop and maintain an effective product or service design and standardization.

5.

To develop and maintain an effective process design.

6.

To ensure effective equipment evaluation and selection.

7.

To develop and maintain effective plant layout.

8.

To ensure effective equipment maintenance and replacement.

9.

To develop and maintain effective tool control.

10.

To develop and implement an effective cost estimating system.

11.

To develop and implement an effective production or operations planning.

12.

To develop and implement an effective materials requirements planning.

13.

To develop and implement an effective production or operations control.

14.

To develop and implement an effective supply chain and materials management system.

15.

To develop and implement an effective total quality management system.

16.

To develop and implement effective kaizen procedures.

17.

To develop and implement effective just-in-time procedures.

18.

To develop and implement an effective service operations management system.

19.

To develop and implement an effective project and contract management system.

20.

To develop and implement an effective merchandising management system.

 
Operations Management is discussed in detail in Tutorial 4.
 

ADDITIONAL INFORMATION ONLINE

 
Operations Management By Mike Baldwin.
Introduction To Operations Management By Dowtsx.
Introduction To Operations Management-1 By A. Oke, GAPS Academy.
Introduction To Operations Management-2 By A. Oke, GAPS Academy.
Introduction To Operations Management-3 By A. Oke, GAPS Academy.

14. MARKETING RESOURCES AND MANAGEMENT TASKS

MARKETING RESOURCES

Marketing Resources of an organization include experienced marketing employees, well-prepared marketing and sales plans and budgets, productive sales force, and the company's goodwill in the marketplace. 

Every organization requires a detailed marketing and sales plan, which outlines its strategy regarding its products and services, price setting, promotion, and distribution. An accurate marketing and sales plan plays a critical role throughout the budgeting process and helps to secure effective utilization of all company resources. 

Comprehensive marketing and sales plans, productive sales force, and strong goodwill in the marketplace are expected to help the organization to promote its products and services to customers in the most cost-efficient manner. 

The main purpose of Marketing And Sales Management, therefore, is to plan, obtain, manage and control marketing and sales resources to ensure their effective utilization within the organization.  Moreover, business owners and managers must be knowledgeable and well-prepared to carry out specific Marketing And Sales Management Tasks to ensure a profitable long-term organizational performance.  Some of these tasks are summarized below.

MARKETING AND SALES MANAGEMENT TASKS

1.

To understand the consumers' buying behavior in the marketplace.

2.

To obtain marketing information and to conduct a market research.

3.

To develop and implement an effective target marketing system.

4.

To conduct effective market measurement and forecasting.

5.

To develop and implement effective marketing strategies.

6.

To develop and implement effective product strategies.

7.

To develop and implement effective pricing strategies.

8.

To develop and implement effective promotional strategies.

9.

To develop and implement effective direct marketing strategies.

10.

To develop and implement effective distribution strategies.

11.

To develop and implement an effective marketing planning and budgeting system.

12.

To develop and implement an effective sales planning and budgeting system.

13.

To develop, maintain, and control an effective sales organization.

14.

To plan and implement effective sales force recruitment, selection, and training.

15.

To plan, manage, and control an effective personal selling process.

16.

To develop and implement an effective sales force compensation plan.

17.

To develop and implement an effective sales force management and motivation process.

18.

To develop and implement an effective sales performance evaluation and control process.

 
Marketing And Sales Management is discussed in detail in Tutorial 5.
 

ADDITIONAL INFORMATION ONLINE

 
The Art Of Sales Management Mastery By Gary Tilkin.
What Does A Marketing Manager Do? By Education Fundas.
Six Key Point Every Sales Manager Must Know By Ben Kugle.
The Ideas Of Philip Kotler About Marketing By MBA In One Day.
A Short Introduction To Marketing By Graham Archbold, Gradua Ltd.

15. WHAT IS ORGANIZATIONAL CULTURE?

ORGANIZATIONAL CULTURE

Organizational Culture represents a critical element of the organization's internal environment.

Organizational culture refers to the character of the organization and is comprised of its unique values, traditions, and attitudes. It is developed throughout the company's existence and embodies the values, mentality, views, and aspirations of its owners.

Ethical standards of managers and employees are constantly affected by organizational culture, thus influencing behavior both within and outside the organization. Although organizational culture cannot be properly measured, it can be assessed in terms of several elements, as illustrated below. (11).

ORGANIZATIONAL CULTURE IN A SMALL BUSINESS

Many small business owners often create their own “positive mini-culture” based on sound personal beliefs, strong ethics, and good level of education. This type of mini-culture may eventually become a solid foundation for the development of the company’s organizational culture when the organization starts to grow and engage more employees. This process may eventually lead the organization toward a sustained growth and profitability in the long run.

On the other hand, there are small business owners, who are motivated primarily by greed, who don’t place high value on ethical behavior, and who are prepared to “cut corners for the sake of profits at any price”. They develop a “negative mini-culture” without even realizing it. Once their organization starts to grow, this type of mini-culture will become the biggest stumbling block in the company’s development process and may eventually cause the company to go out of business.

ORGANIZATIONAL CULTURE ASSESSMENT INSTRUMENT

Business owners may consider using Organizational Culture Assessment Instrument (OCAI) to evaluate their company’s organizational culture. This useful management tool has been developed by Robert Quinn and Kim Cameron and used by many business owners all over the world.

MAIN ELEMENTS OF THE ORGANIZATIONAL CULTURE

1.

Individual Initiative.
To what degree are employees allowed to exercise their freedom and independence within a company?

2.

Risk Tolerance.
To what degree are employees encouraged to be aggressive, innovative, and risk-taking?

3.

Company Direction.
To what degree does the company provide clarity in formulating objectives and performance expectations?

4.

Integration Of Employees.
To what degree does the company supports cooperation and integration within the organization?

5.

Management Support.
To what degree do managers provide clear communication, assistance, and support to their subordinates?

6.

Control Of Employees.
To what degree are company rules and direct supervision used to oversee and control employee behavior?

7.

Company Identity.
To what degree do the employees identify with the organization as a whole, rather than with their particular work group or field of professional expertise?

8.

Reward System.
To what degree is the reward allocation, such as salaries, increases, and promotions based on employee performance criteria in contrast to seniority or favoritism?

9.

Conflict Tolerance.
To what degree are employees encouraged to express their opinions and criticisms openly?

10.

Communication Patterns.
The what degree is organizational communication limited to the formal hierarchy of authority?

 

ADDITIONAL INFORMATION ONLINE

 
What Is Organizational Culture By Denison Consulting.
 Corporate Culture: How Does It Really Work? By Linda Ford.
The Power Of Corporate Culture By Jensen Huang, Entrepreneurship.
It's All About Culture - What Is Corporate Culture? By Training Point.
Zappos Corporate Culture Presentation By Kelley School Of Business.

16. FOR SERIOUS BUSINESS OWNERS ONLY

ARE YOU SERIOUS ABOUT YOUR BUSINESS TODAY?

Reprinted with permission.

17. THE LATEST INFORMATION ONLINE

 

LESSON FOR TODAY:
Organizational Culture Is Not The Most Important Thing, It's The Only Thing!
Jim Sinegal, Co-Founder Of Costco

Go To The Next Open Check Point In This Promotion Program Online.