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Purpose of this module
Every manager should have an understanding of the economy and how it impacts their organisation. Every management decision must take into account the external environmental factors, and the local and global economy forms an integral part of this environment.
This module is aimed at empowering you with an understanding of the basic principles of microeconomics and macroeconomics and how it applies to your own organisation. We also offer an introduction to the role of government in the South African economy and an overview of the monetary and fiscal structures and their responsibilities
Integrating experiential learning into content courses builds skills, confidence, and expectations for students to participate in successful work experience. Experiential learning gives students the opportunity to practice and develop attitudes such as resilience, tenacity, curiosity and self-direction. BMG 100 will provide the student with the opportunity to reflect on the practical experience and be able to come up with the solutions to the problems confronting the work place environment.
- Understand the basic principles of economics;
- Describe the relationship between business management and economics;
- Explain the cause of inflation;
- Discuss economic indicators;
- Understand and determine break-even analysis;
- Apply seasonal indexing;
- Explain the monetary role of government;
- Describe the fiscal role of government;
- Understand the principle of the balance of payments; and
- Describe the principles of truth and objectivity.
- Describe the role of business in society.
- Describe the business environment as it relates to the micro, market and macro environment.
- Explain the internal structures and functions of an enterprise.
Basic economics principles
It is common practice to understand the economics and performance of the country and how its economy can impact companies. Comparing past trends and performance from other countries can assist companies in projecting and planning for the company needs and what may be the economic position in three to five years. You will be introduced to important concepts of scarcity, choice, opportunity cost, the production possibilities curve, macroeconomics and macroeconomics, including the principles of positive and normative economics.
Research the following terms:
➢ 'Managerial economics'
➢ 'Economic fallacies'
According to Botha and Musengi (2016), the organisational environment can be broadly described as the forces and conditions that make up the framework in which the organisation must survive and grow. Although some of these forces are not within the control of the organisation or its managers, they do influence the managers' ability to ensure growth and survival.
The nature of management
What is Management? Although there have been many definitions of management over the years, the current definition of management is:
‘Management is working with and through other people to accomplish the objectives of both the organisation and its members through a process of applying human, financial, physical and information resources in the achievement of an enterprise’s goals.’ (Robbins 2010).
Read the following article 'Exploring the role of popular management theories for Business Model Innovation research':
- Technical or Operational
- Human
- Conceptual
- Leadership – ability to influence others to perform tasks
- Self-objectivity – ability to evaluate oneself realistically
- Analytical thinking – ability to interpret and explain patterns in information
- Behavioural flexibility – ability to modify personal behaviour to reach a goal
- Oral communication – ability to express ideas clearly in oral communication
- Written communication – ability to express ideas clearly in writing
- Personal impact – ability to create a good impression and instil confidence
- Resistance to stress – ability to perform under pressure
- Tolerance for uncertainty – ability to perform in ambiguous situations
The purpose of this module is to understand the concepts and practices of business management and apply these principles in an organisational context.
- Describe the role of business in society.
- Describe the business environment as it relates to the micro, market and macro environment.
- Explain the internal structures and functions of an enterprise.
- Discuss and apply the management functions and tasks.
- Explain the basic components of financial accounting in a business you will need to make financial decisions.
- Explain and apply basic marketing principles to a business.
The development of business and management.
- Business involves human activitie
- It involves production - transforming resources into products and services
- It involves exchange It involves profit
- Major economic Systems
According to Botha and Musengi (2016), the economic system a country chooses, determines how the country organises its resources and what opportunity for business it provides. The economic system of a country also determines the way in which the needs and wants of the people are provided for. There are various economic systems utilised in the world, but the main systems are :
The traditional economic system:
People use resources available to them to produce what they need. Typically, they produce only enough for their own needs but sometimes they produce enough to trade, sell or barter.
The market economic system (also known as the free market system or capitalism):
A country's economic decisions are the result of individual decisions by buyers and sellers in the marketplace. There are no restrictions as to who may run a business, sell goods and services and who may trade or where they may trade. The essential principle of a free market economy is competition among businesses to sell the same or similar products/services to the same consumers. A perfectly free market system cannot really be found anywhere in the world. In South Africa, for example, we follow the basic principles of the free market system but the SA economy has a high degree of government intervention and control so can be referred to as a controlled free market system.
The command economic system (also known as a communist economic system):
The main decision maker is the government. No individual may independently decide to run any type of business. The government decides what goods and services need to be produced and then takes ownership. It is therefore based on central government control of every aspect of the economy. Examples include North Korea and Cuba.
The mixed economic system (also known as a socialist system): The government controls the major sectors of the economy such as road building, electricity etc. The less important sectors that provide products/services, such as trade and the provision of consumer products, are left to entrepreneurs to provide. The state provides the infrastructure and social welfare benefits to all the population.
Business and the environment
The organisational environment in which a business operates is the world outside the business as well as inside the business. As no business operates in isolation, the interaction between these parts affects the success of the business.
Read the article 'The Organizational Environment: From Continuity to Dynamism':
Note: please make use of the following in order for you to understand the unit thorough, you have been provided with all the neccesary information.
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