CHAPTER 1
BUSINESS POLICY (BP)
For these two, rightly taken, are the gravest of sciences, being the arts of arts; the one for judgment, the other for ornament, Francis Bacon on logic and rhetoric.
BP: BUSINESS POLICY
Each subject of this course is presented as a chapter of this book, each section corresponding to a lecture. The following section of this chapter outlines the structure of the course, the general motivation for it, and notes a few examples of key references for the course, this text being the backbone of the course. To typical sections/lectures of the course students/readers should commit at least an hour of extra study, adding further study in readily accessible and relevant media such as textbooks, newspapers, television etc. Towards the end of some chapters/subjects exercises are suggested. Keep your exercise work and notes for each subject in a separate folder, to which newly acquired material may be added in following years. Some areas, ideas, programs etc. may prove of special interest, however, and these should be worked upon a good deal.
BP1. The DBS/MBS course
This course was developed to meet a need for a more logical approach to business/commerce than is given in the traditional MBA courses that are now so ubiquitous. Bearing in mind that these take their name from the Harvard MBA which began in the 1960s, and that it was Wassily Leontief who introduced a little mathematics such as input-output analysis to the Harvard Business School in 1931, it would seem long overdue that some attempt to bring the MBA up to scratch in modern mathematics in as painless as possible a way is overdue. This course was written with that aim.
This book is based on a course of lectures written and given in 1995+ by the author at the International Arts & Sciences College (IASC) in Melbourne, Australia. The 'A & S' of the name was inspired by Francis Bacon's second book on the Advancement of Learning, where, speaking of logic and rhetoric, subjects which he studied at Cambridge for two years, commencing at the age of twelve, he wrote: For these two, rightly taken, are the gravest of sciences, being the arts of arts; the one for judgment, the other for ornament.
Indeed, it is interesting to note that the Harvard Business School was originally founded as a graduate department of arts and sciences. It is also interesting to reflect, what are arts and sciences? Though few realize it, science, strictly speaking, is study with a view to acquiring new knowledge, whereas art is the business of applying that knowledge. Very often the two overlap, of course, but it would surprise most of us to realize that a carpenter, for example, is an artisan and, therefore, practices an art.
So too, for another example, is an engineer or applied scientist, unless he or she deliberately engage in theoretical research.
The course is a well balanced combination of 'A & S'. It has fourteen subjects and was originally divided into two halves, the first of which was the Diploma of Business Science (DBS) and the second the Bachelor of Business Science (MBS).On completion of both of these and completion of a thesis based on a minimum of six months intensive research, or its equivalent, the Master of Business Science (MBS) degree was to be awarded.
Soon, however, it was decided to simply run the course as a concise, efficient 'business science' course, and the MBS was never, in fact, awarded.
It is hoped that students and readers of this book will get a job in a relevant business or start their own and, using a little science, succeed, over time furthering their studies of 'BizSci' so that, if not at the outset, they will ere long have second to none knowledge of modern business. This unique course in outline is:
The DBS/MBS program
Part I: BP Business Policy {+ Mohr's Laws, new idea development}
BL Business Law (and company law)
MS Maths and Stats - for beginners {including queueing theory}
BF Business Finance {+ forecasting techniques}
MP Management Psychology - including HRM sociology
MR Market Research (& marketing) {+ psychology of attitudes}
IT Information Technology (& computing) {including programming}
Part II: NM Numerical Methods {+ penalty etc. transformation methods}
IE International Economics (Macroeconomics) {+ time stepping models}
ME Managerial Economics (Microeconomic) {+ input-output analysis}
OT Optimization Techniques {+ nonlinear problems made simple}
OR Operations Research {+ direct LP for distribution}
PP Project Planning {+ optimization of planning networks}
FM Finite Methods {+ network models via Mohr's Law & infinity
conditions}
Part III: Follow up study/thesis etc.: 6 months min., 18 months max (EFT)
Examples of material unique to the course are shown in { }. Most of this was developed at IASC and was not available from anywhere else in the world.
Some of the motivations for this course are well stated by F.W. Taylor in his Principles of Scientific Management (Harper, New York NY 1911) where he argues that:
1. The whole country loses daily by inefficiency in everything we do.
2. The remedy? Systematic management based on scientific principles, not some 'super manager(s).'
3. Business science rests on clear laws, rules and principles applicable to individual acts and to large corporations and will yield big results.
Desirable prerequisites for students/readers of this course are
a. Interested and motivated and at least of moderate intelligence.
b. At least a little knowledge of high school mathematics, a willingness to suffer a smallish dose of statistics and a little knowledge of computing with a PC.
For the purposes of the DBS the following assumptions are made:
[check] In BL (Business Law) lectures are based on Australian Law but this has much in common with British Law and, in turn US and international law.
[check] There is no management accounting (MA) subject. An introduction to accounting is given in BL and BF and for most users simple spreadsheet packages should serve their needs. For the nuances of taxation law, however, specialist advice is recommended.
[check] For the purpose of the word science I take mathematics to be a subset of science. The word art I then take to mean application. Then, for example, applied science I take to mean technology. Then engineering and its allied disciplines are a subset of applied science.
Some of the sources of material upon which the DBS is based are given in the reference lists at the end of each subject's chapter, but the author's work underpins the course, as might be hoped, just a couple of examples of the many possible being: Mohr GA, Milner HR, A Microcomputer Introduction to the Finite Element Method, Pitman (1986), Heinemann (1987).
Mohr GA, Finite Elements for Solids, Fluids, and Optimization. OUP, Oxford (1992).
Mohr GA, The Pretentious Persuaders, Horizon, Sydney (2012, 2014).
Mohr GA, Elementary Thinking for the 21st Century, Xlibris, Sydney (2014).
Mohr GA, The History and Psychology of Human Conflict, Horizon, Sydney (2014).
Mohr GA, Richard Sinclair & Edwin Fear, The Evolving Universe, Xlibris, Sydney (2015).
Mohr GA & Edwin Fear, The Brainwashed, Inspiring Publishers, Canberra (2016).
Mohr GA, Richard Sinclair & Edwin Fear, Human Intelligence, Learning & Behaviour, Inspiring Publishers, Canberra (2017).
BP2 Elements of Business Policy
Perhaps the three basic considerations of business policy formulation are objectives, means and constraints. With each of these there are both qualitative and quantitative matters to consider. Briefly considering each of these in turn:
Objectives.
Qualitative objectives might include good corporate image, customer loyalty (see MR), product quality and personnel loyalty (see MP).
Quantitative objectives might include maximum sales (see MR) and maximum profit (see ME).
In this context the term management by objectives (MBO) is worth note and decision theory (see BP4) is an example of this.
Means.
Qualitative means towards one's aims might include corporate strategy and tactics, a company structure and/or role model (see BP5).
Quantitative means might include available finance (see BF), material and human resources.
Constraints.
Qualitative constraints will include legal restrictions (see BL) as well, of course, as human limitations.
Quantitative constraints will include finance limits, worker limitations and resistance (see MP), material and human resource limits and market size (see MR).
Note that there are internal constraints (work force size) and external constraints (laws etc.) and one should have both short term and long term plans. In following chapters these and many other pertinent subjects are considered in detail.
Finally, in speaking of objectives here, we are at the outset of any business enterprise originally involved in the question of ideas that might be said to be the 'top line' in our endeavours.
Business ideas
Not to be taken too seriously, here are a few ideas that I have collected over a fairly short time. Some are not all that good but perhaps one or two might be of interest?
* AV equipment: as a lecturer I have never had access to an 'opaque projector' whereas 'overhead projectors' always abound. Opaque projectors are simple mirror affairs and are much too expensive (and RGB projectors more so).
* Beverages: tea, coffee etc. are big business for some. So are Milo etc. Here I find half to a third as much very cheap 'home brand' cocoa + sugar OK instead!
* Booze: your own pub, let alone brewery or distillery, can be a license to print money. Technically speaking brewing is pretty simple. There are very few home brew shops around, I notice, and this could be a growth business.
* Calendars: Calendars can be reused every few years (e.g. 1993 & 1999 were the same) so why not sell a calendars on that basis?
* Cars: Clive Sinclair's electric car cost a small fraction of the cost of an ICE monster but I fear GM etc. will make the electric car dear(er).
* Clothes: Did you realize that the simple tie comes from the Romans who had it ready as an emergency binding for wounds. Do we really need it or the other ridiculous junk we are expected to wear? By the way - the Romans did wear undies!
* Computers: I see a market now for simple and cheaper PCs reminiscent of the early ones with free software etc. and believe the Indians are producing such a thing for education purposes.
* Confectionery: Things like Russian (vanilla) fudge, peppermint nougat bars and chocolates to order from a home made shop I distantly remember in my childhood. I also wonder why well known local sweets have never been exported (desirably including ideas from such home made shops). After all, Mars bars began that way.
* Cosmetics: A business where you multiply the cost of common ingredients by a large number. Some slightly necessary products like Clearasil are pretty dear as a result of monopoly. Likewise with Listerine.
* Cures: The snake oil salesman is surely not dead at all. Surely I could promise to prevent baldness using brushes, shampoos, hormones, prayer, etc.
* Diet: Various big selling books and high profile organizations make this big business. Myself a pocket book of calorie/cholesterol/fat/salt etc. tables I bought second hand for 10 cents finally did the trick for me! (But to be honest you do need to study at least a couple of other books to see what ideas etc. are extant.). A small pocket counter to check your calorie intake through the day would be a good idea too.
* Disposable: Baron Biche gave us the disposable biro, shaver and lighter. Now we have disposable watches etc. What next I wonder?
* Exercise: Home exercise gear is now a big business. A package with a booklet of exercises and a couple of small hand and leg weights might be worthwhile product.
* Export: Something most of us neglect somewhat. Local confectionery, booze, fast food etc. products should be exportable at least within one's world region to begin with. You can take on Coke/McDonald's etc. later on.
* Fast food: I would not mind a fast food chain that sold a variety of things such as pies, fish fillets, chicken nuggets or fillets, 'bread burgers,' sandwiches (various breads or fillings), small fruit pies and even just plain fruit juice and milk at more like cost price. I also see a market for health FF shops with vegetarian etc. stuff.
* Food: I can see a market for more high fibre, low calorie foods for diet conscious people trying to loose weight or keep it down.
* Furniture: A few old fashioned items like the bulky traditional couch could surely be improved on with a little thought and IKEA etc. try this.
* Import: From booze and restaurants to cars is it always more posh/clever to buy foreign? Surely advertisers could overcome this! On the other hand, becoming an importer yourself, as long as a bank backs you, can be very lucrative.
* Packaging: I used to buy cardboard milk cartons which had to be opened by making a spout with scissors. I gave up and pay a little more for a better package.
* Shops: Thinking just what kind of shop I would start just down the road is just about the toughest question I know (if my money is at risk!). I mention home brew shops under booze above but the trouble is that the most hard up people probably cannott afford the small set up cost and might not even have a roof over their head. I also see a greater market for 'game shops' that might sell cheap computer games, board games and other paraphernalia associated with games.
* Soft drinks: Why the Coke vs Pepsi war consumes the world I do not know. I am happy with, indeed, prefer, 'home brand' floavoured mineral water from the super market when it's boiling hot weather. Generally my drinks of preference are decaf., tea and cocoa in that order as the day progresses, plus a little booze in the evening.
* Toothpaste: Why not add a little antiseptic (as in Listerine) to this? Not a bad idea to use 'tooth string' as my mother used to call it daily. Find the right cotton and cut to suit and this will save you a lot on 'dental floss' and the same applies to countless other things. It will also save a lot at the dentist.
* Vegetables: With mad cow disease etc. why eat 'mystery bags' (sausages), chicken nuggets complete with ground up beaks etc. You can buy fresh potatoes, carrots and beans cheaply by the kilo and keep them in the fridge and microwave them to get a quick, healthy and cheap dinner (+ fish fillets or just gravy on the spuds to simulate meat!).
I get better ideas daily but don't record them. Sometimes it might be helpful to start by considering categories of basic need such as food, cooking, heating, clothing, shelter, health and so on.
But that's all folks! Just which one of the above would I start up down the road? It depends what road etc. and, anyway, I should want a partner and would want to talk it all over with he or she first. If we could not agree then it might be best not to start at all.
BP3 Business meetings
In business, as in politics, meetings are an important part of the process. As in parliament, standard procedures should be followed in calling, running and reporting meetings.
To publicize an impending meeting an agenda paper is distributed, for example:
BULLDUST ASSOCIATION OF VICTORIA
Annual General Meeting to be held at 1, Spring St at 8:00 p.m. on Thursday 10/8/99.
BUSINESS
1. President's opening remarks.
2. Apologies.
3. Minutes of the AGM held on 12/8/98.
4. Business arising out of the minutes.
5. Correspondence.
6. Business arising out of the correspondence.
7. President's report (AGM only).
8. Treasurer's report.
9. Election of new members.
10. Subcommittee reports/Reports from delegates.
11. Election of office bearers:
President
Vice-presidents (2)
Secretary
Treasurer
Committee (5)
12. Election of auditor.
13. Guest speaker: Mr J.C. Smith, former Prime Minister, on "Politics Today."
14. Motions on notice:
a. Mr Jones to move, "That the secretary be granted an honorarium of ten dollars ($10)."
b. Mrs Brown to move, "That the Government be requested to reduce the sales tax on bulldust."
15. General business.
16. Notice of motions.
17. Date of next meeting.
18. Close.
During such a meeting the secretary will keep notes and these are used to prepare the minutes of the meeting, copies of which are sent to members and other interested parties prior to the next meeting.
These should cover such items as: Present; Apologies; 1. Minutes of previous meeting; 2. Financial report; 3. Issue A: report on discussion, suggestions, resolutions etc.; 4. Issue B: report on; 5. General business, discussion etc.; 6. Next meeting date/time. "The meeting then closed." Signed. ... Chairman.
In the matter of meetings of businesses and associations the following additional subjects are worth consideration:
Chairperson. The chairperson's duties are simply to ensure that the agenda is followed and to deal with motions.
