Research Paper: Identifying Key Concepts in Business and Management
Key concepts in business are important for the growth of any entity. This is because such concepts determine the direction in which the business is governed, and hence, they determine the success or failure of any business. By understanding the key concepts applied in the business environment, managers are able to avoid errors that may arise in business operations such as poor financial management. The purpose of this paper is to explore different concepts used in key areas of business operations. The key areas include dynamic business environment, critical business functions, the integration of individuals and systems, and ethics and social responsibilities that confront a business.
Dynamic business environment
In our text, Boone & Kurtz (2010) defined business management as the process of managing an organization by applying various business concepts on the set objectives. For the objectives to be met there must be stable functions of the organization such as good planning, organizing, coordination, and directing. These functions can be achieved through well co-ordinated management team. Therefore, good business management results into smooth flow of business activities. In a business set up, various dynamic business environments may affect the performance of the firm negatively or positively.
One of the key concepts in the area of dynamic business environment is economic changes. Economic changes refer to changing trends of general performance in an economy. Economic changes comprise of economic boom and recession. Economic boom has a positive effect on the business environment because businesses generate supernormal profits. Economic recession has a negative effect on business environment because it results into a slowdown in demand and thus a reduction in production. Firms and businesses wind up during economic cycle.
Another concept in the area of dynamic business environment is market conditions. Market conditions refer to the extent of demand and supply of goods and services in the market. Demand and supply are the main determinants of prices of goods and services. The presence of many competitions in the market results into a reduction in prices of goods and services. To beat this odd, Beaumont (2003) noted that a firm must differentiate its products by producing goods and providing services of high quality and standards as well as developing good relationships with the customers. Boone and Kurtz (2010) observed that maintaining good customer relations increases the sales revenue generated by the firm even when market conditions are unfavourable.
The other concept in the area of dynamic business environment is changes in government policies and regulations. Governments change regulations and business policies to regulate business activities. Such regulations may include high taxes imposed on businesses, changes in business registration requirements and policies for reduction in carbon emissions. Failure to observe these changes in government policies may lead to increased conflicts between the government and the firms thus destabilising business operations.
Critical business functions
An organization is divided into operation units that perform different functions. Such functions include human resource, sales and marketing, information technology, production or operation, research and development, finance and accounting and customer service. These functions are undertaken in different levels of management in the organization. These functions are interconnected in different ways. For example, the human resource trains people to work in customer service. The quality of customer service affects the sales generated by the firm. Research and development, generates new methods of production and operation. Information technology affects the extent to which the sales and marketing teams reach the customers in the market. The accounting and finance departments must work to ensure that the human resource receive their salaries in time as a way of motivating the human resource to perform their duties with dedication. In this regard, the concepts above are intertwined and they generate a positive effect in the long run if the management does not create barriers between the departments represented by the functions above.
Integration of individuals and systems
Boone and Kurtz (2010) noted that a smooth flow of activities can be achieved in the organization through proper co-ordination between the workers and the organizational management. The three types of communication flow that must be taken into consideration to enhance better business management include; (a) upward communication; (b) Horizontal flow of communication and (c) downward communication flow. Upward communications refer to communication between subordinates and managers. Managers should create a free and fair environment that allows them to welcome any worker with an issue.
Upward communication enhances the relationship between the managers and the workers which make the workers feel as part and parcel of the firm. Horizontal communications refer to positive relations between people of the same level. This means that departmental managers should develop positive relations in order to increase the connection of service delivery between the departments. This will allow effective information flow between the departments. In downward communication, messages and information flow from the managers to subordinates.
Effective and timely delivery of information from the manager to the subordinates enhances the time within which activities are undertaken in the firm. A delay in the flow of information from the manager delays every other activity being undertaken in the firm. Therefore, all persons from the manager to the subordinates must work together to achieve the desired objectives.
Ethical and social responsibilities that confront a business
Ethical responsibilities refer to the acceptable code of conducts that guide the behaviour of people in the organization. Ethical responsibilities may be determined by the government, customers, competitors and the business environment at large (Weybrecht, 2010). For example, courtesy in dealing with customers may be an important consideration in beating competitors. The dressing code may be determined by the government to enhance smartness during service delivery both in private and public held institutions.
Social responsibility refers to the society’s requirements towards the firm. For example, producing high quality products and selling the products at an affordable price is a social responsibility (Weybrecht, 2010). Additionally, adopting green production methods to reduce emission of green house gases is another social responsibility. Providing a safe and healthy working environment is another example of social responsibility.
Treating customers with courtesy and paying the pending debts in time is another important concept in the area of social responsibilities that confront a business. Positive behaviour concept in the organization includes relating with other people positively and following proper channels of dispute resolution. It also involves dressing smartly in the office in order to gain respect particularly from the customers. Ethical and social responsibilities are important considerations in the organization without which the business may not yield the desired objectives.
In the above sections, different areas that touch sufficiently on operations in the firm have been discussed. They include dynamic business environment where concepts such as economic changes, market conditions and changes in business regulations and policies. The other area discussed is critical business functions where concepts such as human resource, sales and marketing, finance and accounting, production or operation, information technology, research and development as well as customer service have been discussed. The area of integration of individuals and systems has also been discussed.
The concepts discussed here include upward communication, horizontal communication and, downward communication. All these make up the flow of communication in the organization. Further, the area of ethical and social responsibilities has been discussed. Among the concepts explored in this area include the responsibility of the firm towards the society in terms of employment, reduction in pollution of the environment and payment of better salaries and wages to the workers. Other concepts discussed in this area include proper dressing codes, handling of customers with care and using courteous language under the area of ethical responsibilities that confront the business. For any company to succeed, all these concepts must be taken into consideration because they may affect the business positively or negatively.
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