OSUN STATE UNIVERSITY

OKUKU CAMPUS

Course Code: BUS 103

Course Title: Introduction to Business I
Course Units: 2
Semester: Harmattan
Session: 2023/2024

Course Lecturer: Dr. E. O. OJO

Department of Business Administration
Faculty of Management Sciences
 Course Descriptions
The Nature of Business; The Business
Environment; Forms of Business Organisation;
Business Ethics; Corporate Social Responsibility;
Business Management Process; Organisation for
Business Practice; The Role of Government in
Business; Challenges of Managing Business in
Nigeria; and Modern Business World.
 Objectives of the Course
At the end of this course, the students are expected to:
 understanding the concept of business;
 call to mind the importance of business environment;
Explain the different forms of business organisation;
identify the major ethical issues affecting business;
describe the social responsibility of business organisation
demonstrate an understanding of business management
process;
explain organisation for business practice;
recall business management techniques;
 describe the role of government in business;
 identify and explain the challenging of managing business in
Nigeria; and
 understand the concept of modern business world.
 Course Contents
Week 1. The Nature of Business.
Week 2. The Business Environment.
Week 3. Forms of Business Organisation.
Week 4. Business Ethics.
Week 5. Corporate Social Responsibility of Business
Organisations.
Week 6. Business Management Process.
Week 7. Organisation for Business Practice.
Week 8. Business Management Techniques.
Week 9. The Role of Government in Business.
Week 10. Challenges of Managing Business in Nigeria.
Week 11. Modern Business World.
Week 12. Revision
References
 Week 1: The Nature of Business
Business Defined
 Nickels, McHugh and McHugh (2005) “a business is any activity that
seeks to provide goods and services to others while operating at a profit.”
Fry, Stoner and Hattwick (2004) said “a business is any organisation that
strives for profits by providing goods and services that meet customer
needs.”
McNaughton (1960) says “business is the sum total of those activities that
have as their main purpose the creation, maintenance and extension of a
concern, which continues to exist because it earns profits or other benefits
or money.”
According to Ojo (2007) business is defined as “all institutional
arrangements involved in the creation and provision of the desired goods
and services necessary for enhancing the quality of life of a society at a
profit.”
It is pellucid from these definitions that business really deals with a
fundamental issue; that is, an exchange of goods and services for money.
However, for this exchange to take place the business must produce and
offer goods and services that customers need and desire. At the same time,
this exchange will continue to exist if the business earns profit or other
benefits or money.
 Features of Business

Production of Goods and Services: Business involves in

the production of goods and services necessary for the
well-being of the consumers and thus earn income or
revenue. Goods produced may either be consumer goods
or capital goods.

Exchange of Goods and Services: All legal businesses

involve in the production and exchange of goods and
services that meet consumers’ needs and demand. These
goods and services are exchanged with the consumers’
purchasing power, that is, money. This
 Features of Business
 Profit Motive: All business organisations employ various
resources to produce goods and services that meet consumers’
desires. However, all business must make profit from their
operations in order to survive and remain in business.

 Element of Risk: One of the features of business is the risk of

uncertainty and possible loss. These risks are more pronounced
when the business is operating in an environmental
characterised by dynamism, complexity, uncertainty, and
intense competition.

 Continuity of Operation: A sales of a product or service does not

constitute business unless it is done repeatedly and frequently.
This means that business activities should be carried out on
regular basis, which will guaranty continuity and survival of
such a business.
 Objectives of Business
The major objectives of any business organisation could
be summarised as follows, to:
(a) create customers
(b) make profit
(c) grow and survive
(d) create employment opportunity
(e) improve the standard of living of consumers
(f) be socially responsible
(g) improve employees welfare
(h) maximise dividends for shareholders
(i) engage in research and development
(j) increase market share
(k) produce high quality products
 Key Result Areas Needing Objectives
1. Market Standing: Managers should set objectives indicating
where it would like to be in relation to its competitors. Market
standing objectives might include:
Increase market share from 20 percent to 30 percent within five
years.
Become a market leader in innovation and pricing.

2. Innovation: Managers should set objectives outlining its

commitment to the development and introduction of new products,
processes, practices, and methods. Innovation objectives might
include:
Being the leading company to develop new technology in the
industry.
Being the first to introduce innovative methods in marketing and
manufacturing.
Key Result Areas Needing Objectives
3. Productivity: Managers should set objectives outlining how to
increase efficiency in resources utilisation in order to achieve
target levels of production. Productivity objectives might include:

Increasing output levels of production department by 5 percent in

the next operating year.
Decreasing production costs per unit of output by 5 percent in the
next operating year.

4. Physical and Financial Resources: Managers should set

objectives regarding the acquisition, allocation, use and
maintenance of physical as well as financial resources. Such
objectives might include:
Acquiring up-to-date equipment at the end of present operating
year.
Refurbishment of the entire plant in the next two years. 2 years.
 Key Result Areas Needing Objectives
5. Profitability: Managers should set objectives that
specify the profit the organisation would like to generate.
Profit can be interpreted as the gain resulting from
organisation’s activities. Profitability objective might
include:
 Generating returns in excess of investment.
 Maximising dividends for stockholders.

6. Manager Performance and Development: Managers should set

objectives dealing with continued development of managerial
talent, for the present as well as for the future. Manager
performance and development objectives might include:
 Establishing a yardstick for performance evaluation of
managers.
 Assisting managers in developing their personal career plans
within the first two years of joining the organisation.
 Key Result Areas Needing Objectives
7. Worker Performance and Attitude: Objectives should be set
that
will specify rates of worker productivity as well as desirable
attitudes all workers must possess. Worker performance and
attitude objectives might include:
 Increasing the employees’ contribution to the achievement of
the organisational objectives.
 Decreasing employees turnover due to poor reward system.

8. Social Responsibility: Manager should set objectives that

indicate the company’s responsibilities to stakeholders as well
as the society in general. These are non-economic objectives
related to supporting a good cause but not for profit motive.
Social responsibility objectives might include:
 Donations to victims of natural disasters.
 Giving scholarships to indigent but brilliant students
 Beneficiaries of Economic Objectives of Business
1. Owners: The first beneficiaries of business economic objectives are
the owners of such business enterprises. The benefits accrued to the
owners of business are to get adequate returns on the money invested in
the business and this must be in terms of profits or dividend.

2. Employees: Employees also benefit from business economic objective

of profit maximisation. This is achieved when they are well
compensated through fair remuneration and other welfare facilities
such as housing, transportation, job security, educational facilities for
children, medical care, leave bonus, access to soft loans and retirement
benefits like gratuity and pension.

3. Customers: The customers who are otherwise known as the general

public are the patrons of the business organisation. Hence their
satisfaction is highly important. The goods and/or services must be
made to the specification and satisfaction of customers as this will be
determined by the patronage the business enjoys from its teeming
customers.
 Beneficiaries of Economic Objectives of Business
4. Government: The fourth beneficiary of business economic objective
of profit maximisation is the government. The benefits government
receives from business organisations are in form of taxes and other
levies paid by business organisations to the government covers. This
payment will continue as long as the business is maximising its profit.

5. General Society: The last but not the least beneficiary of business
objectives is the larger society or the environment in which the
business operates. Business organisations engage in community
welfare programmes such as provision of roads, water, school
buildings and electricity. The pursuit of social welfare programmes by
business organisations helps to create a good relationship with the
local community and promote good reputation of organisation as
corporate citizen of the community.
•
Functions of Business
1. Business provides the raw materials from which goods
are produced. These materials resources are then
converted into finished goods that satisfy and meet the
needs of consumers.

2. The fundamental questions of what to produce, how to

produce, and for whom to produce are answered by
business which produce and distribute goods and services
in order to satisfy human wants.

3. Business performs the major function of providing

goods and services to the society at large. Thus, it helps to
improve the standard of living and quality of life of the
people of a nation.
 Functions of Business

4. Business also provides services aimed at making life

more comfortable for individuals and businesses. For
example, insurance firms and banks provide services for
firms and individuals.

5. Generation of employment. Business provides

employment for a vast majority of people to earn a living.
This is so because many people are involved in one form of
business activity or the other.

6. Business organisations, by their involvement in

corporate social responsibility, provide infrastructural
facilities and social amenities for the local communities in
 Importance of Profit
• Profit can be defined as financial reward or benefit that
is gained by a businessperson through his involvement
in business activities. In other words, profit is the
amount of money left over after the business records
all its revenues and subtracts all its expenses.
• Profit is an important motivator for business managers. The
efforts of the business owners are rewarded through the
realisation of profit. As important as profit is, it should not,
however, be the sole objective of the business. When business
aim is primarily on making profit and neglects the importance
of other objectives like efficiency, employees satisfaction and
growth, financial stability and survival, quality products and
services for customers, good corporate citizenship to mention a
few, the business is on the verge of collapsing.
 Importance of Profit
The importance of profit is enumerated below.
Profit is the reward or wage of business for providing goods and/or
for rendering services.
It provides resources for continued expansion and continued
existence of the business firm.
It encourages employees to work more efficiently because more
profit would mean increased wages and better conditions of services
for worker.
It is a measure of business performance and a means of evaluating
the competence or otherwise of the management.
Profit is the means of increasing the wealth of the owners of the
business.
It attracts investors to invest in the business.
It is used to determine the level of business tax to be paid to the
government.
It is used as a control mechanism by shareholders.
 Business Resources
Resources are assets that have utility. Business resources can be defined as all
inputs that can be acquired, processed and utilised by business organisation to
produce goods and services or to create wealth. We look at business resources in
terms of 6Ms: Man, Money, Materials, Machines, Methods and Market. All
these resources and others such as knowledge and information that are not
discussed are of great economic value when optimised to contribute to
production of goods and services.
1. Man: This refers to the human resource commonly called labour. This
resource involves the use of human efforts in the production process. Human
efforts can be mental, physical, acquired or inherited. Human efforts are
necessary inputs for production to take place. The human efforts can be divided
into three parts, viz:
(a) Skilled: These are human efforts and abilities that are acquired through
formal, relatively long and specialised type of training; e.g. efforts of a lawyer,
an accountant or a business manager.
(b) Semi-Skilled: These are human efforts or abilities that are acquired through
informal training or apprenticeship; e.g. efforts of a bricklayer, a tailor or a
plumber.
(c) Unskilled: These are human efforts or abilities that required little or no
 Business Resources
2. Money: Money is an important resource needed for production to take place.
The reason is that all other resources are acquired with the help of money. Money
comes in form of capital and can be in form of short-term fund or long-term fund.
It can be described as man-made productive assets used for the creation of further
wealth.

3. Materials: These are the most visible part of production. They are the resources
that are needed to facilitate the production of goods and services. In fact,
production is seen as the conversion of input materials into finished goods and/or
services. Materials as a class of resources have four components:
(i) Raw Materials: These refer to unit of inventory awaiting conversion into
output.
(ii) Work-in-Process: This refers to element on conversion, that is, class of
materials that are already put into process but for which production process is yet
to be completed.
(iii) Finished Goods: These are fully converted materials, that is, elements that are
processed into final output but which are yet to leave the factory or the job shop.
(iv) Tools: These are generally spare parts maintenance items as well as other set
of components that are usually kept for use in the course of normal operation.
Business Resources
4. Machines: These are used to represent technical equipment and
facilities from the most simple to the very sophisticated that are used in
the conversion of inputs to outputs. In this wise, a broom is regarded as
a machine just as cranes, conveyor belts, fork lift vehicle, appliances and
other tools that are needed to transform raw materials into finished
goods.

5. Method: This relates to the skills that are broad to bear in the process
of determining resources, the magnitude and the direction of resources
that are deployed for conversion. Consideration should also be given to
the best technique to be used in the process of transforming the inputs to
outputs.

6. Market: In the context of business management, a product makes

sense only if there is demand for it. Market here refers to all potential
buyers and the opportunities presented by the environment in which the
business operates.
 Benefits of Studying Business
1. It offers many career opportunities such as sales
management, product management, retail store
management and many other options

2. The study of business principles can help students who

will work for not-for-profit organisations to learn that
most not-for-profit organisations can actively engage in
business activity and thus become more efficient workers.

3. Studying business will help one to become a more

knowledgeable consumer, which can lead to better
consumer decisions. This is because one will better
understand the business practices that influence his
purchases.
Benefits of Studying Business

4. Business is one of the most relevant studies in

modern society. It is a pervasive aspect of our
culture that has a dramatic impact on world
affairs. Learning this fact is part of being an
educated person.

5. As a prospective applicant, you will be actively

involved in marketing yourself. The business
principles and skills you will learn in this book
will help you achieve your career aspiration.
 ASSIGNMENT

“It has been said time and again that the

business of business is business.” Discuss.