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The Complete Idiot's Guide to MBA Basics, 3rd Edition by Tom Gorman

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The Six Business Principles Every Manager Must Know

The following six concepts are central to business and are the reasons business needs managers:
• Value for customers
• Organization
• Competitive advantage
• Control
• Profitability
• Ethical practices
I describe each concept in more detail over the following pages.

Value: What Customers Pay For

A business exists to create value of some kind. It takes raw materials or activities and increases their value in some way, transforming them into products or services that customers will buy. Value is what customers pay for—customers buy things that they value.
 
For example, McDonald’s creates value by setting up places where people can eat inexpensively away from home. The company builds restaurants, ...

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