Course Code-612

Course Title:
Business Fundamentals
and
Bangladesh Studies

15th Batch Evening MBA

Course Instructor:
Dr. Hossain Shahid Shohrowardhy
Professor
Department of Marketing
Chittagong University.

Cell: 01822-907614
E-mail: [email protected]
Face book: [email protected]
 Brief Introduction about me-
• Familiar by Manik
• SSC in 1990 and HSC 1992
• BBA and MBA from Department of Marketing, CU
• 1st Class 2nd in BBA and 1st Class 3rd in MBA
• PhD from the Department Finance & Banking,
Chittagong University under supervision of Dr. Nesarul
Karim, Professor of the department of Finance.
• PhD Title: Elixir of Growth of Islamic Banking Sector
in Bangladesh
• Specialization on Service Industry
• Philosophical School: Negativistic Thought
• Hobby: Reading, Travelling and doing research
• Number of publication = 17
• Job Experiences:
– M.A. Hasem Degree College, Noakhali
– Akij Corporation
– Islami Bank Bangldesh Limited
– University of Chittagong (From 07.06.2003 to till
date)
 Course Title- 612: Business
Fundamentals and Bangladesh
Studies

13th Batch Evening MBA

Chittagong University Center for Business

Administration (CUCBA)

Faculty of Business Administration

University of Chittagong

Credit: 03;
Class duration- 45 Hours:

3
 Syllabus:
• Two Parts:
• Mid Term (Fundamentals of Business)
1. Business Fundamentals
2. Form of Business
3. Organization and Management
4. Starting business in Bangladesh
5. Cost of doing business in Bangladesh
• Final Term (Bangladesh studies)
1. Introduction
2. Society & Culture
3. Some provision of the constitution
4. Economic sector highlight
5. Financial Administration of Government of
Bangladesh

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Basic Text and Reference Books:
• Basic Texts:
• Business for the 21st Century, Steven J. Skinner and
John M. Ivancevich, 1st edition, 1992, Irwin, Boston,
MA 02116, USA.
• Introduction to Business and Doing Business in
Bangladesh, Dr. M. M. Mahmud & Md. Salim Uddin,
2nd edition, 2010, Padma Prokashani, Dhaka,
Bangladesh.

• Reference Texts:
• Bangladesh: Society, Politics and Bureaucracy, M.
Khan
• Management, S.P. Robbins and M. Coulter, Parentice
Hall, Upper Saddle River, New Jersey, USA, 9th
ed.2008(or latest 12th ed. )
• Bangladesh Economic Reviews, Finance Division, The
Ministry of Finance, www.mof.gov.bd/en/index.php
• The Constitution of Bangladesh, Industrial Policy,
Import Policy and Export Policy of Bangladesh.
• Bangladesh Economic Survey and regular updates by
Bangladesh Bank, The Ministry of Finance and Bureau
of Bangladesh Statistics.
• Introduction to Business by Md Ziaul Huq

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 Part : One

• Fundamentals of Business

• Total Chapter : Five

• Total Class Required: 8 Classes of
three hours each.

6
 Chapter: One

Contents :
Definition
Basic Elements
Mission & Objectives
Principles
Environment
Branches
Business vs. Economics
21st century Challenges of local & global Business.

7
 Definition:
• The word business relates to the “state of
being busy” either as an individual or
society as a whole, doing commercially
viable and profitable work.

• Generally business means the exchange of

goods & services with a view to earn
profit .

• According to L.H.Hancy, “business may be

defined as human activity directed toward
production or acquiring wealth through
buying or selling goods”.

• According to Skinner & Ivancevich,

“business is the exchange of goods, services
or money for mutual benefit or profit.

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• Business is the human activity directed
towards producing or acquiring wealth
through buying and selling of goods or
services.

• A business is an enterprise that provides

products or services desired by customers.

• A business (also known as enterprise or firm)

is an organization engaged in the trade of
goods, services, or both to customers.

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 Features of Business:

• Exchange of goods and services

• Deals in a large number of transactions
• Profit is the main objectives
• Risks and uncertainties
• Buyer and seller
• Connected with production
• Marketing and distribution of goods
• Deals in goods and services
• Satisfy human wants
• Social obligations.
• Mutual benefits

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 Why do We Study Business Fundamentals?
 For academic perfection
As a student of business to learn
-about history,
-free enterprise system,
-impact of environmental change on business
-about business career and understand how business works
-about skills needed to be successful
 Increasing Dependence on Others (Mutual benefit)
No one is self reliant, specialized in shoes but need food.
 International Opportunities (globalization)
-place in a international market
-Business negotiation, joint venture, job in a foreign
owned companies.
-investment across geographical boundaries.
 Understanding the nature of business
Forms of Business organization (sole ownership,
partnership, companies)
 Standard of Living
Providing the means of life, protecting life
 Coping with Change
-business is dynamic and subject to change
-price increase or decrease
-products are innovated
-new laws are framed.
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 Business Elements
• Two types: Physical and human elements.
• (1) Physical Elements
– Organizational Form and Structure
Forms:
-Sole trader ship
-Partnership
-Corporation
Structure:
Organizing appropriate people for appropriate position.
– Capital
-Fixed
-Owners capital
-Loan capital
-Working capital
– Goods and Services
-Produced, acquired and sold to earn profit.

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– Place
-House, open place (owned or
rented)
– Legal Aspects
-Legal documents regarding
business operation
-Any operation beyond laws is
illegal.
– Risk & Uncertainty
-business is based on forecast and
estimate which are uncertain.

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• (2) Human Elements
– Owners
-Invest money and expect to earn.
-Separation of ownership from management.
– Managers
-Owner manager (entrepreneur)
-Professional manager
-To attain profit, growth, survival.
– Employees
-Supplies the skills and abilities needed to
provide a product or service and to earn profit.
-Needed an effective and committed team of
employees.
-Expects an equitable wage or salaries and
gradual increase.
– Consumers
-A consumer is a person or business who
purchase goods or services for personal or
organizational use.
-Business enterprise must satisfy consumer
needs and desire.

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 Economics: the
foundation of Business
• Economics is the science that deals with the
scarce/limited resources to produce goods &
services to the welfare of the society. This
bring economics closer to business.

• The important concerns for both (business

and economics) are-
1. Resources
2. Production of goods and services
3. Allocation of resources and products

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1. Resources: Resources are essential to satisfy human
wants and production of goods & services. Resources
are of three types-
a. Natural (Oil, Gas, Diamond, Gold, Coal, Mineral, etc.)
b. Financial (Capital resources such as fuel, raw materials,
machines, factory building etc.)
Current Assets
Fixed Assets
Intangible Assets
c. Human Resources
Skilled
Semi-Skilled
Unskilled (need training)

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2. Production of Goods & Services: Resources of a
country are used for the production & distribution
of goods and services to satisfy the wants of the
people. Business operates to produce or acquire
goods or services that people will demand to
satisfy their wants & needs.
Four factors of production are required to
produce goods or services:
Land, Labor, capital and Entrepreneurs/
Organization.
3. Allocation of resources and products:
Allocation of Resources
Resources are limited but wants are unlimited. In
this situation we have to think about how the
scarce resources are to be used as best as can be.
Three fundamental economic questions need to
be evaluated:
a. What goods & services to be produced and at
what quantity?
b. How these will be produced & by whom?
c. Who will use these goods & services & who
will be benefited from these?

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Product Distribution (Goods &
Services)
-involves the distribution of
goods and services to
consumers.
-Exchange of goods and services
between business and
consumer s.
-For example in free economic
system businesses earn profit
and consumers satisfy their
needs.
Mutual satisfaction
Resources are well allocated
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 Economic Systems

Economic system of a country has a significant effect

on production & distribution system of products &
services.
1. Capitalism
Individual (private) Ownership
Individual Initiative (decisions)
No government influence
Perfect competition

2. Communism (Marxism, and or, Socialism)

State ownership
Central plan (initiative or decisions)
Central, provincial governments
Equitable distribution
Single political party dominate the power

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3. Mixed Economy
Individual & State Ownership
Individual & State initiative (decisions)
Government influence
Competitive market
4. Islamic
Production, Distribution and
Consumption decisions will be decided
following ‘Holy Quran & Sunnah’.

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 Objectives, Mission, & Vision

A Vision statement-
-outlines what a company wants to
be. It concentrates on the future; it
is a source of inspiration; it
provides clear decision-making
criteria.
-focuses on company’s future.
-is description of a change that the
organization seeks to make.
-Broadest and most general

“Our vision is to supply quality

products to our customers”.

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 Objectives, Mission, & Vision
• A Mission statement-
• -States about products and competition.
• -talks about what the company is now. It
concentrates on present; it defines the
customer(s), critical processes and it
informs you about the desired level of
performance.
• -focuses on company’s present state.
• -defines the purposes for which an
organization is founded and exists.

• “Our mission is to supply quality

iron shafts to the construction
firms of Chittagong.”

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Objectives, Mission, and Vision of Business

Objective:
-An end that can be reasonably achieved
within an expected timeframe and with
available resources.
-More specific and numerically expressed.

“Our objective is to earn 10% Return on

Investment (ROI) by supplying quality iron
shafts to the construction firms of
Chittagong.”

Features of Objectives
(SMART)
Specific
Measureable
Achievable
Realistic
Time Bound

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 Types of Business Objectives

Profit
-Making a big gap between cost and
revenue.
-Business Profit: difference between
business income (revenue) and business
expenses (costs).
-Economic Profit: what remains after
expenses and opportunity costs are
subtracted from income.
Survival
-Earning as few as possible to sustain in
the business arena.
-To remain in operation
Growth: It can not stand still
Increasing market share, size, & profit
Social Responsibility
Employees’ concern
Natural Environment protection
General welfare
Reducing disparity/equal opportunities
Community development

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 Vision Statement:

• Grameen Phone: To be a leading

provider of telecommunication service
provider all over Bangladesh with
satisfied customers and shareholders
and employees.
• Apple: to make a contribution to the
world by making tools for the mind
that advance humankind.
• Al Amin Group: Our vision is to be
the best and to be the world’s leader in
everything we do, and every product
we make.

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 Mission Statement:
• Grameen phone: GP aims at providing
reliable, widespread, convenient mobile and
cost effective telephone services to the people
in Bangladesh irrespective of where they live.
• Apple: Apple is committed to bringing the
best personal computing experience to
students, educators, creative professionals
and consumers around the world through its
innovative hardware, software and internet
offering.
• Al Amin Group: Their mission is to make
quality products that satisfy customers’ needs
with an affordable price that is within the
range of their buying capacity.

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 Principles

There are some principles which a business needs

to follow for successful operation and attainment of
objectives.
Setting specific objectives
For successful operation a business must set its
objectives and take necessary steps to attain those
objectives.
Suitable organization structure
There must be a properly set organization structure
along with designated duties, responsibilities &
accountability set up.
Efficient management
Management is getting things done by others. That
is a set of management people be recruited with
assigned duties & they must be capable of
performing recruiting right men & use the officers
& staff most efficiently.

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 Proper Planning
Plan is the future course of action. A business
must have a plan & this plan must be based
objectively and set properly. What activities are
to be done, when to be done, how to be done,
how to be financed, how to be evaluated etc. be
specific in plan document.
 Adequate finance
Business for its operation will need finance. The
requirement of finance be estimated & source of
finance be tapped in such a way that is cost
effective.
 Efficient accounting
For proper use of fund & resources an efficient
accounting system be installed.

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Undertaking risk
Business is to work under conditions of
uncertainty & risk. In one hand business must
have the capacity to bear its risk & on the other
hand it shall have to asses risk & identify
uncertainty & take necessary action to minimize
risk.

Rendering service
Business must maintain good relation with
purchaser, sellers, employees & relevant other
parties. Good relation need to be maintained with
all the parties through providing services that
each party logically demand.

Smooth operation
Business either in case of manufacturing or
acquiring goods or in case of distribution of
goods and services, must ensure smooth
prodution & distribution system.

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• Economy (low cost)
It is one of the fundamental principles of
business, whatever my be the form, ownership
pattern, size etc. that different activities are
performed efficiently and effectively.
• a. Effectiveness means achievement of
goals. For example: a hospital is
effective when it successfully meets the
needs of its clients.
• b. Efficiency means the ratio of
effective output to the input required to
achieve it. For example: the hospital is
efficient when it can do so at a low cost.

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 Environment

-Environment refers to the surroundings

of an object.
-It indicates circumstances, influences,
stresses, and competitive, cultural,
demographic, economic, natural,
political, regulatory, and technological
factors (called environmental factors) that
effect the survival, operations, and
growth of an organization.
-Sum total of all surroundings of a living
organism, including natural forces and
other living things, which provide
conditions for development and growth as
well as of danger and damage.

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 Business Environment

 Business environment is the constraints

and opportunities that surround our
businesses.

 Business environment encompasses all

those factors that affect a company's
operations (functional area, objectives-
profit, growth, survival & Corporate
Social Responsibility), and includes
customers, competitors, stakeholders,
suppliers, industry trends, regulations,
other government activities, social and
economic factors and technological
developments.

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The Organization and Its Environments

International Technological
dimension dimension

Competitors

Owners
Regulators Employees Customers
Board of directors
Culture
Physical
Political- environment
legal Economic
dimension Strategic dimension
Suppliers
partners

Socio-cultural
dimension
Internal environment

Task
environment External environment
General environment

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 Business Environment

• Refers to all the institutions, forces or factors that

might affect the operations or performance of a
business.
• Types of Environment: Two types
• 1. External Environment
Everything outside an organization’s boundaries
like economic, legal, political, socio-cultural,
international, and technical forces.
It may be of two types-
(i) General environment: is a set of broad
dimensions and forces in an organization’s
surrounding that determine its overall context.
(ii) Task Environment: is composed of specific
groups and organizations that affect the firm.
• 2. Internal environment
Conditions and forces within the organization.

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• The General Environment: is a set of
broad dimensions and forces in an
organization’s surrounding that
determine its overall context. It includes-
• 1. Economic Dimension: It refers to all
forces which have economic impact on
business.
-Important economic factors for the
business are economic systems
(capitalist, socialism or mixed economy),
sources of capital, fiscal policy of the
Govt., inflation, interest rates, stock
market fluctuations, unemployment,
industry policy, infrastructure etc.
- For example: during the time of
inflation a company pays more for
resources and must raise its prices to
cover the higher costs.

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• 2.Technological Dimension: it refers to the methods
available for converting resources into products or
services.
-New innovations in robotics and other manufacturing
techniques such as CAD(Computer Aided Design),
CAM (Computer aided Manufacturing) affects different
car manufacturers around the world.
• 3. Socio-cultural Dimension: it includes the
customers, values, and demographic characteristics of
the society in which the organization functions. It
includes attitude to work, belief in fate, religion,
education and culture.
• 4. Political dimension: it refers to the policy & organs
of the state and their influence on business.
--Government frames & implements policy regarding
industry, business service & related matters through
legislature, administrative order and implements them.
-Judiciary system of the state has also bearing on
operations of business so as to keep it in accordance
with laws & rules.
-Elements of political environments are rules framed by
government, govt. –business relationship, style of
governmence.

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• 5. Legal dimension: it represents laws &
regulations governing business environment.
-Business must be aware of concerned laws &
regulations & evaluate the impact of concerned
provisions on setting up & operation of business.
-Following laws and regulations affect the
business environment
Partnership Act, 1932 Companies Act 1994, Law
of Contracts and sale of goods Act 1932,
payments of Wages Act, Factories Act, Labour
Act, Law of foreign exchange, Income Tax
Ordinance 1984, VAT Act, Import-Export
Policy, Annual Development Program and Plans
of Govt.,
• 6. International Dimension: is the extent to
which the organization is affected by business in
other countries.
-For example: multinational company such as
Sony, Nestle, Microsoft, etc. clearly affect and
affected by international conditions and the
market.

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 The Task Environment
• It is composed of specific groups and organizations
that affect the firm.
• The task environment includes competitors, customers,
suppliers, regulators and strategic alliances.
• Competitors: seeking the same resources as the
organization.
• Customers: who acquire an organization’s products or
resources.
• Supplier; that provides resources for the organization.
• Regulators (Agencies and interest groups); that control
legislate or influence the organization’s policies and
practices.
• Strategic partners (allies); who are in a joint venture or
partnership with the organization.

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 Internal Environment
• Conditions and stakeholders forces within the
organization.
• -Owners with the legal property rights to a business.
• -Board of directors elected by the stockholders to
oversee the general management of the firm to best
serve the stockholders’ interest.
• -Employees who work for the firm and have a vested
interest in its continued operation and existence.
• -Cultures is the set of values that helps its member
understand what the organization stands for, how it
does thinks, and what it considers important. It is an
important element of organization’s internal
environment because it plays a major role in shaping
managerial behavior.

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Scope of Business

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 Challenges for 21st Century

Increasing competition
1. Quality,
2. Cost, and
3. Innovation
Globalization
Mixed culture,
language in business environment,
Boundary-less organization,
virtual organizations
Workforce diversity
Religion, color, gender, ethnicity
Women Empowerment
Changing role of women, working
mothers, single women, single
parent family
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 Challenges for 21st Century

Changing role of family

‘Old is gold’ and ‘father knows best are
challenged now’

Revolution of ICT
Automation and computerization
replace manual tasks are leading to faster,
better and cheaper, internet, e-commerce

Increasing demand for Knowledge based

workers
Information, innovation & creativity,
quality people
Political instability
Lack trust and belief among each
others; instable international politics, and
Hartal & Road Block are common phenomena

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 Changes in workplace environment
-employees demand greater flexibility
and work/life balance
-office structure are moving towards
club environment (leisure facilities,
day care facilities etc.).
 Deep seated corruption
-corruption, piracy
 Social Responsibility and ecological
issues
-environment pollution, global
warming, climate change, cyclone and
sidre, global concern of eco-friendly
product.
 Global economic crisis
- financial crises, increased inflation,
price hike of fuel & gold and crashes
of capital market.

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