Business Areas, Objectives, and Company Types
Basic Areas of Activity
Supply and Production Area
The primary function of this area is to manage the supply of raw materials in the most advantageous way for the company, considering both physical and economic conditions. It also controls the entire process of transforming these materials into finished products, sometimes including the storage of these products for sale.
Financial Area
Personnel responsible for this area are concerned with obtaining and managing the financial resources the company
Read MoreMarket Dynamics: Supply, Demand, and Consumer Behavior
Understanding Supply and Demand
Supply: Represents the willingness of sellers to offer a product at a specific price. The higher the expected price, the greater the quantity of product vendors will be willing to supply.
Demand: Represents the willingness of buyers to purchase a product at a specific price. The higher the price, the lower the quantity that buyers are willing to purchase.
The interaction between supply and demand determines the market price of a product:
- High Price: Discourages buyers
Formal vs. Informal Business Structures
Formal and Informal Organizations
Formal Organization: Sets the direction, brand relationships, hierarchical positions, brand management activities, and communication channels. It operates hierarchically.
Informal Organization: Arises spontaneously, establishing relationships based on friendship, affinity, etc. Activities are voluntary and do not necessarily align with the business’s goals. Friendship groups form based on affinity, and authority may be exercised by individuals other than designated
Read MoreLuxottica, Currency Exchange Rates, and Economic Factors
Luxottica and Brand Licensing
Luxottica owns Ray-Ban outright, meaning they have complete control over the brand. Other brands, like Versace and Gucci, operate under licensing agreements with Luxottica.
With Ray-Ban, Luxottica handles all aspects of design and manufacturing without paying royalties for the brand name. In contrast, for brands like Gucci, Luxottica designs the glasses with input from the brand, which is typical of a licensing agreement.
Luxottica designs glasses with input from the licensed
Read MoreMastering Organizational Fundamentals: Span of Control, Delegation, and Centralization
Lesson 6: Fundamentals of Organizing
2 Marks Questions
- Define span of control.
- Or, define span of management (2076, 2075, 2073, 2072)
Ans: Span of control can be defined as the total number of subordinates or junior workers that a manager can control or manage at a particular time.
Define mechanistic organization
Ans: A mechanistic organization is an organizational structure that is formal, centralized, and less flexible.
Define Organic organization.
Ans: An organic organization is an organizational structure
Read MoreRailroad and Telegraph: Revolutionizing 19th Century Spain
The Communications Revolution: Railroads in Spain
The slow emergence of the railroad in the mid-nineteenth century, coupled with Spain’s complicated orography, absence of navigation channels, and poor road network, made the installation of a rail network imperative. This network would ensure coordination of the national market, enable a centralized state, and facilitate the mobility of people. The railroad arrived in Spain lagging behind other European countries due to the Carlist wars, difficulties
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