B200 TUTORIAL WEEK ONE

1. B200TUTORIAL WEEK ONE Updated by: Reham Al-Homayan Oct, 2007

2. Summary • To develop your understanding of the business world, this course explains how businesses work, are structured, are influenced by their environments, and how they try to control competitive market pressures. Understanding their complexities and uncertainties is not easy, so the course discusses different approaches and ways of seeing organisations and markets. It does not just present information and theories but enables you to evaluate and use them, improving your capacity for rigorous assessment. Finally, the course defines and develops three groups of related business skills: study and presentation; IT; and numeracy. Updated by: Reham Al-Homayan Oct, 2007

3. Course Content This course will help you to develop your knowledge of the world of business in four key areas – environments, markets, processes and organisations – improving your understanding of how they work and are interrelated. By considering and assessing different approaches to and explanations of the development of modern businesses, it should enable you to analyse the four elements and how they change. Exploring the main components and processes of business activity and comparing the key approaches and models used in the international context, the course will give you a foundation from which to go on to other business courses. Updated by: Reham Al-Homayan Oct, 2007

4. Learning OutcomesBy the end of B200 you should be able to: • understand how and why business organisations work and are structured • know how their key processes are designed and work • see how they are positioned in, and influenced by, their environments • understand how they operate within, and are affected by, market forces • be able to engage with some of the complexities and uncertainties in the way businesses behave, and be conversant with some of the theories about that behaviour • have analytic, numeric, IT and presentation skills appropriate for business studies. Updated by: Reham Al-Homayan Oct, 2007

5. Understanding business: Environments Our study of the training-shoe industry showed clearly that businesses are highly complex. This module defines and analyses the main forces that make up the business environment and assesses their effects on business behaviour. A study guide, together with the course reader, examines different ways in which the current state of the business world is interpreted. You do not need to read the whole of the environments reader – your tutor will advise you which sections to read and study on a weekly basis. Updated by: Reham Al-Homayan Oct, 2007

6. By the end of the Environments module you should be able to: • recognise key phenomena in business environments • use appropriate models and concepts to analyse them • recognise and interpret the values underlying different analyses of business environments • understand the complex relationship between the behaviour of businesses and their environments • identify some of the methods businesses adopt for dealing with their environment. Updated by: Reham Al-Homayan Oct, 2007

7. Chapter 1 Globalisation by Giddens Updated by: Reham Al-Homayan Oct, 2007

8. Giddens offers a definition of globalisation as an overwhelming cultural phenomenon which provides both driving force and direction to most of the changes we are observing in the contemporary world. • The role of businesses in this theory is as a processor through which the dominant images of globalisation become reality in their products and practices. The point he is making indirectly is that a growing belief that globalisation is happening is making it happen via business responses to it in a sort of perpetual circle. Updated by: Reham Al-Homayan Oct, 2007

9. There are several definitions and all usually mention the increasing connectivity of economies and ways of life across the world. The Encyclopedia Britannica says that globalization is the "process by which the experience of everyday life ... is becoming standardized around the world." While some scholars and observers of globalization stress convergence of patterns of production and consumption and a resulting homogenization of culture, others stress that globalization has the potential to take many diverse forms. Globalization has various aspects which affect the world in several different ways such as: Updated by: Reham Al-Homayan Oct, 2007

10. Industrial - emerge worldwide production markets and boarders access to a range of goods for consumers and companies. Financial - through emergence worldwide financial market. Economic – realization of a global common market, based on the freedom of exchange of goods and capital. Political - creation a world government with regulate the relationships among nations. And many others affects that emerge the worldwide to be one area (one country) without boarders. Updated by: Reham Al-Homayan Oct, 2007

11. The sceptics? • Giddens accepts that there is another school of thought which disputes the whole phenomenon of globalisation – he refers to them as sceptics. • The sceptics said the world is same for many years , there are communication, the global economy is not different the before. • Ex, European Union mostly trade among themselves with trading blocks in some countries such as Asia ! Updated by: Reham Al-Homayan Oct, 2007

12. It is important to accept that as a B200 student you must not accept theories unquestioningly – you must think how they might be critiqued! Updated by: Reham Al-Homayan Oct, 2007

13. The radicals? Giddens agrees with a view (note this is only one point of view) of the “radicals” who state that the consequences of globalisation can be felt everywhere. They see the era of the Nation State as being over. They cite examples such as increased world trade and the global electronic economy where fast transfers of money are possible. Updated by: Reham Al-Homayan Oct, 2007

14. Giddens’ Own View • Giddens takes the view that seeing the phenomenon of globalisation solely in economic terms is a mistake. He sees it as a complex set of processes with push and pull effects. There are more driving forces at play than just economic ones. • Giddens said globalization is political , technological, cultural as well as economic. • So, Globalization is a complex of process , is the reason for appear of local identities in different parts of the world, it create new economic and cultural zones within and cross nations. Updated by: Reham Al-Homayan Oct, 2007

15. Chapter 2 Identifying Environmental Issues by Armson et al. Updated by: Reham Al-Homayan Oct, 2007

16. The authors offer a range of models of the environment. These will be important models during your study of B200. These models are simply different interpretations of the same world (different ways of showing the same or similar things). Some of them emphasise the flow of resources around the environment (like the transformation model), others emphasise the people in it (like Mintzberg’s physiognomy), while others see the environment as principally defined by its structure (like the STEP analysis model). Different people view the business world differently, and business decision-makers need to maintain a breadth of vision. Updated by: Reham Al-Homayan Oct, 2007

17. Environmental Interaction:- The organization system either close or open system. ‘closed’ it would be no communication between the organization and outside environment. While ‘open ‘ mean the organization communicate , exchange people, information, money, goals, services with outside environment. What do you this think about the organization today. Open or close? Why? Updated by: Reham Al-Homayan Oct, 2007

18. There are several environmental models we are going to discuss, these models help to understand the flow of resources around the environment, environment structure, …..and others that help to take the right decision! These models as following: Updated by: Reham Al-Homayan Oct, 2007

19. STEP analysis Stand for : S…. Social (ex, population growth, age distribution, ….) T…. Technology (ex, rate of technology change, …) E…. Economic (ex, economic growth, exchange rate, …) P…. Political (ex, tax, policy, …) and decision and frame work of macro-environment factors used in environment scanning. There is further extended to legal, ethics, ….. It is used for the analysis of business and environment factors. It is a part of the external analysis when doing market search and given a certain overview of the different macro-environment factors that the company has to take into consideration. See table 2.1 p 12 Updated by: Reham Al-Homayan Oct, 2007

20. Transformation Model All operations produce goods or services or a mixture of the two, and they do this by a process of transformation. By transformation we mean that they use their resources to change the state or condition of something to produce outputs. Input Transformation Output Process Explain the model by using McDonald's restaurant. What is possible environmental factors that could affect input, transformation & output? Resources Materials Energy People Capital … Goods Services Updated by: Reham Al-Homayan Oct, 2007

21. Mintzberg’sModel Is art of studying some one characteristics from their face, is the art of reading the lines in your hand! But in business this will help you to understand the organization when you read and understand the players who run the organization (understand organization structure) According to Mintzberg’s model, there are 5 organizational Parts as shown on figure 2.2 p 14 Updated by: Reham Al-Homayan Oct, 2007

22. Ideology, halo of beliefs, values, culture, … Operation Core: the operators who perform the basic work, production of products and services. Strategic apex: charged with ensuring that the organization serve its mission in an effective way, the need of those people who control or otherwise have power over the organization. (top management). Technostructure: we find the analysts who serve the organization be effecting the work design it, plan it, or train the people who do it, but they don’t do it themselves (system and process design) Support staff, is composed of specialized units the exist to provide support to the organization work flow. (support outside operation) Midline, is composed of middle management Also, we have the players immediately outside the organization: owners closely involved with management( organization culture and structure) Employee association are representative bodies…… other parties. Updated by: Reham Al-Homayan Oct, 2007

23. SWOT analysis model Is a strategic planning tool used to evaluate the Strength, Weakness, Opportunities, and Threats involved in a project or in a business venture. If a clear objective has been identified, SWOT analysis can be used to help in the pursuit of that objective. In this case, SWOTs are: Updated by: Reham Al-Homayan Oct, 2007

24. Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis. You can also apply SWOT Analysis to your competitors. As you do this, you'll start to see how and where you should compete against them Updated by: Reham Al-Homayan Oct, 2007

25. Try applying a SWOT analysis to the situation of a new shop opening in a shopping mall near you. Strengths: • What advantages does your company have? • What do you do better than anyone else? • What unique or lowest-cost resources do you have access to? • What do people in your market see as your strengths? Weaknesses: • What could you improve? • What should you avoid? • What are people in your market likely to see as weaknesses? Updated by: Reham Al-Homayan Oct, 2007

26. Opportunities: • Where are the good opportunities facing you? • What are the interesting trends you are aware of? (change in technology, policy, lifestyle, local events, …) Threats: • What obstacles do you face? • What is your competition doing? • Are the required specifications for your job, products or services changing? • Is changing technology threatening your position? • Do you have bad debt or cash-flow problems? • Could any of your weaknesses seriously threaten your business? Updated by: Reham Al-Homayan Oct, 2007

27. STEP analysis • Turn to page 12 of the environments text book. • Your tutor will talk you through Table 2.1 Updated by: Reham Al-Homayan Oct, 2007

28. The Transformation model • Turn to page13 of the environments book • Your tutor will talk you through the transformation model. • Try applying the transformation process to a McDonalds restaurant. Updated by: Reham Al-Homayan Oct, 2007

29. Mintzberg’s physiognomy • Turn to page 14 of the environments reader • Your tutor will talk you through figure 2.2 Updated by: Reham Al-Homayan Oct, 2007

30. SWOT analysis • Mentioned in your study guide on page 10 but not in the reader, you will have seen reference to SWOT analysis. • Your tutor will talk you through SWOT analysis. • Try applying a SWOT analysis to the situation of a new shop opening in a shopping mall near you. Updated by: Reham Al-Homayan Oct, 2007

31. Activities • Activity 1 (page 10 of the Study Guide) • Activity 2 (page 13 of the Study Guide) Updated by: Reham Al-Homayan Oct, 2007

32. READING TO BE COMPLETED BY NEXT WEEK • Please read pages 5 - 14 of the Study Guide to refresh your study of Chapters one and two. • Please read Chapters 4, 5, 6, 8 and 9 of the Text book before the next tutorial (NB you do not need to read Chapters 3 and 7– these are optional readings). Updated by: Reham Al-Homayan Oct, 2007