Show Menu

Introduction to Business Management (South Africa) Cheat Sheet by

An overview of all the topics associated with Introduction to Business Management


Establish mission statement. Determine specific object­ives. Select strate­gies. Implement programs. Review & Evaluate.
Determine the way the business will operate. Choose tasks to be done. Determine the input mix. Assign tasks. Delegate authority and respon­sib­ility.
Give clear direct­ions. Set the example. Commun­icate. Motivate.
Assess and monitor perfor­mance. Compare with set standards. Identify variants. Take remedial action.

Factors of Production

The inputs needed to produce goods and services.
Land (Natural Resour­ces): anything taken from nature to provide goods and services. Resources found in sea, earth and air.
Capital: money and assets invested into the business. Includes human capital who bring in their knowledge and skills
Labour: employees who put in the physical and mental effort into the production process.
Entrep­ren­eur­ship: combining the above factors to produce something that is of value or useful to consumers.

Business Intera­ction with Commun­ities (CSR)

Businesses and commun­ities can mutually benefit from intera­cting with one another.
1. Businesses often hire people in their community to work as employees and managers and compensate them with wages and salaries for their time. Therefore, they provide their employees with the income they use to satisfy their needs & wants.
2. Businesses help improve the infras­tru­cture of the community.
3. Businesses recognize that they are dependent on the support of the community and, therefore, help the commun­ities they operate in with CSI & CSR initia­tives, like providing bursaries, skills develo­pment, donations, etc.

The Internal (Micro) Enviro­nment

Also known as the decisi­on-­making enviro­nment, organi­zations have control have control of this enviro­nment.
Factors of the Micro Enviro­nment
Strengths & Weakne­sses: Organi­zations must be able to identify their strengths and weakne­sses. Their strengths are what they excel at and their weaknesses are what they need to improve.
Vision & Mission: The vision is where the organi­zation sees itself in the future and the mission is the organi­zat­ion's plan of action on they'll achieve the vision.
Goals & Object­ives: Goals are long-term targets, whereas, objectives are short-­term, specific targets.
Culture, Diversity & Ethics: Culture are values and beliefs that form the identity of the organi­zation. Diversity is the unique differ­ences in the indivi­duals in the organi­zat­ions. These should be apprec­iated and embraced. Ethics are accepted principles of right and wrong.
All the resources, technology and processes the business uses to produce their products and services form part of this enviro­nment.

The External Enviro­nment

Consists of factors the organi­zation has no control over.
Unders­tanding the Opport­unities & Threats: The impact of these lies in how the organi­zation reacts to them. Changes expose whether or not the organi­zation has adequately prepared though contin­gency planning as well as expose if they have a lack of expertise and skills.
SWOT Analysis: Brings together all the factors that management deal with in the external and internal enviro­nment.

The External (Market) Enviro­nment

Also known as the task enviro­nment. Falls just under the boundaries of an organi­zation. Organi­zations have no control but can have an influence on the enviro­nment.
Customers: most important factor in the enviro­nment. Organi­zation must properly monitor changes in the needs and wants of consumers in order to maintain their market share. THE BIGGER THE MARKET SHARE=THE HIGHER THE TURNOVER
Compet­itors: those that challenge the organi­zation for their market share as they compete for the same/s­imilar customers. The organi­zation must be innovative and work to constantly improve the quality of their products to keep up with their compet­itors. They must also be aware of their rivals' advert­ising strate­gies, their price and their products.
Distri­butors: organi­zations that are outsourced for supplies and deliveries of goods and services. These interm­edi­aries have the expertise and specia­lized skills to fulfill functions that the organi­zation may lack or can't afford to do themse­lves.
Suppliers: provide input resources. Organi­zat­ion's relati­onship with suppliers must be protected and maintained as the survival of the business depends on it.
Labour Force: the most important asset and biggest investment in a business. Therefore, businesses must consis­tently nurture and invest in their human resources by providing good working condit­ions, offer better pay, offer skills develo­pment opport­unities and ensure all their needs are met.

The External (Macro) Enviro­nment

Organi­zation has 0 control. These factors affect decisi­on-­making, perfor­mance and strate­gies. Includes the PEST analysis.
Economic: includes foreign exchange rates, inflation, wages paid to employees, taxes, cost of raw materials & prices at which goods and services are sold.
Techno­log­ical: enables transf­orm­ation of inputs into outputs and the knowledge, techniques and skills used to do so. Signif­icant driver of change in the external enviro­nment.
Politi­cal­-Legal: the way in which government provides framework within which organi­zations can operate and function. Directly affects the operations of busine­sses.
Demogr­aphic & Cultural: includes race, age, gender, class & levels of education of the people the organi­zation serves and employs.
Intern­ational Factors: trends & develo­pments of the intern­ational market. Can be both a threat and opport­unity for/to the organi­zation when utilized and monitored.
Ecolog­ical: enviro­nmental concerns that can affect the way an organi­zation interacts with the enviro­nment. Organi­zations face huge pressures from consumers to operate in an enviro­nme­ntally sustai­nable and eco-fr­iendly fashion.

Organi­zat­ional Behaviour

The study and unders­tanding of the behaviour of the organi­zation as well as the behaviour of its members, indivi­duals and teams. It is the study of:
1. the nature and purpose of the organi­zation
2. the human element and behaviour of people
3. business strategy, organi­zat­ional processes and execution of work
4. the process of management as an integr­ating part and coordi­nating activity
5. social respon­sib­ilities and business ethics
6. the external enviro­nment of the organi­zation
7. the need for organi­zation success and survival

Entrep­ren­eurship & Small Business

1. Motivated by growth & expansion
2. Embrace risk
3. Focused on future opport­unities
4. Embrace creativity & innovation
1. Motivated by profit & sales
2. Avoid risk
3. Focused on the current operations
4. Often content with size of the business & aren't very innovative


What is Entrep­ren­eur­ship? Creating & building something of value from nothing in the midst of uncert­ainty and risk. Plays a large role in the economic growth of developed & developing countries.
Common Charac­ter­istics:
1. Creativity - produce new and original ideas or changing an existing business into an entrep­ren­eurial one.
2. Innovation - developing better produc­ts/­ser­vices & proces­ses­/te­chn­iques. New and better ways of doing things. Often linked to creativity
3. Commitment & Determ­ination - ability to stay focused and persevere to reach one's goals. Staying discip­lined and persis­tent.
4. Ability to Deal with Risk - often see risks as opport­unities and seizes them despite the dangers, AFTER calcul­ations. RISK=U­NCE­RTAINTY but THE HIGH THE RISK, THE HIGHER THE REWARDS
5. Opport­uni­ty-­ori­entated - constantly on the lookout for opport­unities that could generate profits as well as finding ways improve existi­ng/­fam­iliar indust­ries.
Types of Entrep­reneurs
1. Corporate Entrep­ren­eurs: work in and manage an existing business for a salary.
2. Techno­pre­neurs: combine entrep­ren­eurial and techno­logical skills in the Tech industry.
3. Copren­eurs: co-owner, often couples, that combine their different strengths & experi­ence.
4. Social Entrep­ren­eurs: exist to develop and benefit the community. Their profit is used to uplift the community and society. STILL PROFIT DRIVEN

Small Business

What is a Small Business? There is no universal defini­tion. Just means micro, small and medium enterp­rises. Definition is based on qualit­ative & quanti­tative criteria.
Qualit­ative Criteria: use as a simple organi­zat­ional structure (hiera­rchy) that is indepe­ndent & privately owned and managed.
Quanti­tative Criteria: the turnov­er/­income; number of employees; total number of assets; number of business units (depar­tments)
SOUTH AFRICAN National Small Business Amendment Act No. of 29 of 2004 defines small business as:
"A separate and distinct entity, including co-ope­rative enterp­rises & non-go­ver­nmental organi­zat­ions, managed by one or more owner/s, which including its branches and subsid­iaries, if any, is predom­inantly carried on in any sector or sub-sector of the econom­y...which can be classified as a micro, a very small, a small or medium enterp­ris­e."

Forms of Ownership

Company: an associ­ation of shareh­olders incorp­orated in terms of the Companies Act No. 71 of 2008
Charac­ter­istics: they are more compli­cated and advanced, have their own legal person­ality and authority & control over the company = BOARD OF DIRECTORS
Split into 2 separate catego­ries: PRIVATE & PUBLIC
1. 1-50 members
2. members provide capital
3. general public cannot buy shares
4. limited transf­era­bility of shares
5. name ends with (PTY) Ltd - propri­etary limited
6. have fewer legal requir­ements than public companies
1. minimum of 7 shareh­olders. Maximum shareh­olders is only limited by number of shares issued to the public.
2. shareh­olders provide capital (share capital)
3. general public invited to buy shares
4. shares are freely transf­errable @ the JSE (Johan­nesburg Stock Exchange)
5. name ends with Ltd (limited)
6. have more legal requir­ements
Establ­ishment Procedures
1. Companies have a legal person­ality
2. Can continue if a shareh­older leaves or dies
3. Shares of Public Company are transf­errable which leads to expansion opport­unities
4. They have set a organi­zat­ional structure (hiera­rchy)
5. There is more sources of finance
1. Very compli­cated to start
2. There are many establ­ishment costs = very expensive to start
3. Required to disclose financial statem­ents, therefore its very difficult to keep financial secrets from compet­itors
4. Employees do not have a personal interest in the business
5. Shareh­olders have very little contact with their investment
6. Due to size, there is very little personal contact among people

Why is Management Important?

1. Resources are used effect­ively and effici­ently to achieve organi­zat­ional goals and profes­sional develo­pment, while contri­buting to a more sustai­nable society.
2. Management tasks (planning, organi­zing, leading and contro­lling) help businesses reduce costs, deliver quality produc­ts/­ser­vices & remain compet­itive
3. Reduce duplic­ation of tasks by having people with relevant skills & qualif­ica­tions, who know who they report to and are held accoun­table & respon­sible
4. Nurtures good working relati­onships to contribute to success of the business
5. Developing organi­zations that are responsive to changes in the business enviro­nment
6. Ensure quality goods and services are produced to ensure good reputation of the organi­zation

Self-M­ana­gement Skills

Self-m­ana­gement is the behaviour one must adopt to see the desired change in their life or workplace. These skills are vital for managers to optimize their perfor­mance.
Giving yourself a reason to act is vital to achiev­ement and success. Includes committing yourself to doing your best and learning from your failures as well as recogn­izing your core beliefs as they form the center of your thoughts. CHALLENGES = MOTIVATION
SELF-C­ONT­ROL­=MA­NAGING YOUR EMOTIONS Good managers try to remain composed and self-c­ont­rolled, they also recognize their feelings and know how to control them. Includes thinking clearly and acting delibe­rately, even in high-s­tress situat­ions, as well as remaining positive in an apparently negative situation.
Emotional Intell­igence
The ability to manage your own emotions and those of other people. Daniel Goleman, identified five charac­ter­istics which include self-a­war­eness, motiva­tion, self-r­egu­lation, social skills & empathy.

Components of Emotional Intell­igence

Knowing and unders­tanding your own emotions.
Directing your own emotions towards positive outcomes. Always being optimi­stic.
Contro­lling and managing your own negative emotions and behavi­ours.
Ability to feel the same way as your subord­inates and employees. Includes being sensitive to differ­ences in cultures, gender & person­ali­ties.
Social Skills
Being able to commun­icate with and influence other people.

Managerial Skills

Cognitive Skills
Analyze a situation. Distin­guish between cause and effect. COGNIT­IVE­=TH­INKING AHEAD. Abstract thinking helps managers have a holistic view of the inner workings, promotes clear analytical thinking and adapt to new ideas and experi­ence. Based on intuition, ability to argue constr­uct­ively, think on one's feet, see things holist­ically and think critic­ally.
Technical Skills
Specia­lized knowledge and ability to carry out specific tasks. First line managers, specif­ically, need to have these skills. JOB SPECIFIC KNOWLEDGE & TECHNIQUES
Human Skills
Ability to unders­tand, alter, lead & control the behaviours of people & groups. Good commun­ication and ability to interact for a successful completion of tasks. Includes ability to work with, motivate & direct groups and indivi­duals in the organi­zaion.

Managerial Compet­encies

Refers to skills, knowledge & experi­ence. Its a function of one's intell­igence & acquired through learning. Its visible & evidenced through one's qualif­ica­tions
Underlying personal charac­ter­istics and attrib­utes. Its one's in-born abilities and is a function one's natural abilities. Its often difficult to measure.
“Sets of knowledge, skills, behaviours & attributes that a person needs and develops to be effective in their profession and within an organi­zat­ion."
There is no list of compet­encies that defines an effective and efficient manager, managing depends on influe­ncing factors.

Social Respon­sib­ility

Organi­zat­ion's commitment to following policies & activities that benefit the society. Organi­zations need to be respon­sible from economic, legal and ethical perspe­ctives.
Done through Corporate Social Investment programs. Result in increased staff morale and improved organi­zat­ional reputa­tion.

Social Respon­sib­ility

Organi­zat­ion's commitment to following policies & activities that benefit the society. Organi­zations need to be respon­sible from economic, legal and ethical perspe­ctives.
Done through Corporate Social Investment programs. Result in increased staff morale and improved organi­zat­ional reputa­tion.

Management Theory & Practice

There are four main approa­ches.
Tradit­ional Approach
Emphasis on managing work effici­ently in organi­zat­ions. Notable changes in the work enviro­nment that include improv­ement in techno­log­y& commun­ication techno­logies that influence operat­ions.
Behavi­oural Approach
Focus on human behaviours and relations and was introduced in the 1920s. Changes in the type of work, its nature, and the legal & political consid­era­tions.
Quanti­tative Approaches
Process of measuring in terms of quantity, numbers & amounts. Its a more logical approach to manage­ment. Use mathem­atical & statis­tical measur­ements.
Contem­porary Approach
Response to limita­tions of tradit­ional, behavi­oural & quanti­tative approa­ches.

Tradit­ional Approach

Bureau­cratic Approach
Developed by Max Weber. Organi­zations is run based on rules & proced­ures. Five principles include: well-d­efined hierarchy, formal rules & proced­ures, impers­ona­lity, specia­liz­ation of work & compet­ence.
Scientific Approach
Focuses on work employees do. Developed by Frederick W. Taylor. Four principles include: scient­ifi­cally study each task & best method of performing it, choose employees carefully & train them to perform a task using the method, watch & work with employees to ensure they use proper methods & delegate work respon­sib­ili­ties.
Admini­str­ative Approach
Developed by Henry Fayol. *Fourteen principles include: division of work, authority, discip­line, unity of command, unity of direction, subord­ination of individual interests to the general interests, remune­ration, centra­liz­ation, scalar chain, order, equity, stability of tenure of personnel, initiative & espirit de corps

Behavi­oural Approach

Human Relations Approach
Focuses on the relati­onship aspect of manage­ment.
Maslow's Theory of Motivation
self-a­ctu­ali­zation, esteem, love & belonging, safety & physio­log­ical.
McGregor's Theory of Leadership*
THEORY X - employees don't enjoy work, want to be told what to do and punishment is used to get them to do the work.
THEORY Y - employees enjoy their work & want to direct & control their own actions, have respon­sib­ilities be involved in the problem - solving processes of organi­zat­ional changes.
Developed by Mary Parker Follet, Hawthorne Studies, Abraham Maslow & Douglas McGregor.

Quanti­tative Approach

Operations Management Approach
Help managers make organi­zat­ional decisions like production planning, quality control & inventory planning.
This approach has taught organi­zations to use quanti­tative methods for decision making – organize inform­ation into logical catego­ries. The methods allow managers to set definite targets by creating numerical goals. Managers are able to monitor the various production processes – can access inform­ation easily
The methods ignore human and social relations. Managers do not have the chance to develop the human skills needed to manage people

Contem­porary Approach

Systems Approach
Focuses on organi­zation as a system. Looks at inputs, transf­orm­ation & outputs. A system can be opened (interacts with the enviro­nment through feedback) OR closed (little or no intera­ction)
Contin­gency Approach
Suggest that managerial action is dependent on the situation. There isn't one way to run an organi­zation - managers must adapt & change.
Quality Approach
This approach requires that all those working in the organi­zation contribute to ensuring the production of high-q­uality products & services.
Learning Organi­zat­ional Approach
Make sure vision is understood and that employees commit to it. Creates a corporate culture. Employees understand their job, how to do it & how to add value to customers.
Entrep­ren­eurial Management Approach
To remain suffic­iently knowle­dgeable to lead organi­zat­ions, managers find new ways of thinking about management


A detailed guideline to achieve the goals of the organi­zat­ions. Involves goals & objectives and developing a strategy to achieve them.
1. Provides basis for managerial tasks
2. Lays down standard in contro­lling perfor­mance & the actions plans to achieve them
3. Gives a sense of direction and purpose
4. Planning is future orientated
5. Can minimize any negative outcomes of change and uncert­ainty
6. Planning facili­tates decision making
7. Planning promotes innovative ideas
8. Planning reduces overla­pping and wasteful activities
9. Planning minimizes bad decisions
10. Planning promotes co-ord­ination between different depart­ments.
11. Planning allows an organi­zation to allocate its resources in the best way possible.

Planning Levels

Strate­gic­-Board Level
High degree of uncert­ainty, long-term, considers whole organi­zation
Tactical - Middle
Medium­-term, use of existing assets and resources.
Short-­term, day to day & detailed

Types of Plans

Clearly defined and no room for misund­ers­tan­dings
General guidelines and allow flexib­ility & provide focus.
Specific situat­ions. Used once and never again.
Ongoing plans & performed repeat­edly.

Planning Process

1. Determine & state the organi­zat­ional objectives
2. Assess threats & opport­unities
3. Assess strengths & weaknesses
4. List altern­ative ways of reaching objectives
5. Choose the best altern­ative for reaching objectives
6. Develop strategies to pursue the chosen altern­ative
7. Implement the plans
8. Control & assess results
9. Repeat planning process

Types of Decisions

Supported by establ­ished rule or operating proced­ures.
Made in response to relatively uncommon problems. Involves modifying or improving on past decisions
Based on identi­fic­ation of unusual or ambiguous problems. Develo­pment or implem­ent­ation of creative solutions.

Decision Making Process

1. Define & diagnose the problem
2. Set goals
3. Search for altern­ative solutions
4. Assess altern­atives
5. Choose between altern­ative solutions
6. Implement the chosen altern­ative
7. Follow up & control

Organi­zation Process

1. Assigning resources to tasks
2. Clarifying respon­sib­ilities in the form of job descri­ptions, business charts and lines of authority.
3. Commun­icating employer expect­ations through rules, operating procedures & perfor­mance standards
4. Establ­ishing procedures for collecting & evaluating inform­ation to help managers make decisions & solve problems.

Reasons for Organizing

1. Allocating or assigns different respon­sib­ilities to each employee
2. Allocation of accoun­tab­ility
3. Establ­ishes lines of commun­ication
4. Allocation of resources
5. Improved teamwork & synergy

Organizing Process

1. This is continuous process enabling employees to work together more effici­ently & achieve the organi­zat­ion's goals
2. All employees should be aware of their respon­sib­ilities
3. Poorly carried out organizing would result in confusion, frustr­ation, loss of effici­ency.

Leadership Vs. Management

1. Challenge status quo & bring about change
2. Develop strategies for producing changes toward the vision
3. Develop the organi­zat­ion's vision and set its direction
4. Commun­icate the new direction & get people involved
5. Motivate & inspire others
1. Interp­ersonal roles of symbolic figurehead, liaising with key people & superv­ising employees
2. Informal roles of inform­ation monitor, inform­ation dissem­inator & spokes­person
3. Decisi­on-­making roles of innovator, distur­bance handler, resource allocator & negotiator

Leadership & Power

1. Coercive Power
2. Reward Power
3. Legitimate Power
1. Inform­ation Power
2. Referent Power

Charac­ter­istics of Leadership

1. Personal Qualities
2. Personal Philosophy
3. Management Capabi­lities
4. Working with colleagues & employees
5. Relati­onship skills
6. Ability to plan, organize & create vision


No comments yet. Add yours below!

Add a Comment

Your Comment

Please enter your name.

    Please enter your email address

      Please enter your Comment.

          Related Cheat Sheets

          Project Management Cheat Sheet