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UNIT 1: MANAGEMENT
KEY TERMS
Management: The process used to accomplish organizational goals through planning, organizing,
leading and controlling people and other organizational resources.
Manager: An individual who is in charge of a certain group of tasks, or a certain area or a department
of a business.
Chief Executive Officer (CEO): The most senior manager responsible for the overall performance
and success of a company.
Planning: A management function that includes anticipating trends and determining the best strategies
and tactics to achieve organizational goals and objectives.
Organizing: A management function that includes designing the structure of the organization and
creating conditions and systems in which everyone and everything work together to achieve the
organization’s goals and objectives.
Leading: Creating a vision for the organization and guiding, training, coaching and motivating others
to work effectively to achieve the organization’s goals and objectives.
Controlling: A management function that involves establishing clear standards to determine whether
or not an organization is progressing toward its goals and objectives, rewarding people for doing a
good job, and taking corrective action if they are not.
KEY TERMS
Motivation: factors that influence the behavior of workers towards achieving business goals.
Motivation can be increased by:
1. Monetary rewards
2. Non-monetary rewards
3. Introducing ways to give job satisfaction
Job satisfaction: the enjoyment a worker gets from feeling that they have done a good job. There are
three ways to motivate workers to be more committed to their job and work more effectively.
1. Job rotation ( swapping workers round and only doing a specific task for a limited time before
swapping round again ).
2. Job enlargement ( extra tasks are added to the job to make it more interesting )
3. Job enrichment ( adding tasks that require more skill and/or responsibility )
Theory X: The average person does not like work. Workers must be constantly supervised so they will
work. Motivation is from external factors, e.g. pay schemes where the workers are paid more for
increased input.
Theory Y: The average person is motivated by internal factors. To motivate workers you need to find
ways to help workers take an interest in their work, e.g. give rewards, incentives.
Maslow’s hierarchy of needs: A theory of motivation which states that five categories of human
needs dictate an individual’s behavior. Those needs are physiological needs, safety needs, love and
belonging needs, esteem needs and self-actualization needs.
Frederick Herberg’s motivation theory: Humans have two sets of needs: one is for the basic needs,
which he called hygiene factors or needs and the second is for a human being to be able to grow
psychologically, which he called motivational needs or motivators.
Hygiene factors: The factors that must be present in the workplace to prevent job dissatisfaction.
Theory X Theory Y
It assumes that most people are incapable of It assumes that most people have a psychological
taking responsibility for themselves and have to need to work, and given the right conditions - job
be looked after or threatened, for example with security, financial rewards - they will be creative,
losing their job and rewarded with incentives, ambitious and self-motivated by the satisfaction
probably monetary ones such as a pay rise or of doing a good job.
bonuses.
It has traditionally applied, for example, by It is probably more applicable to skilled
managers of factory workers in large-scale professionals called “knowledge workers” -
manufacturing. managers, specialists, programmers, scientists,
engineers - than people in unskilled jobs.
It relates to the basic, lower order needs at the It relates to higher order needs such as esteem
bottom of the hierarchy, such as financial ( achievement, status and responsibility) and
security. self-actualization (personal growth and
fulfillment) that can be pursued if basic needs are
needed.
Satisfiers Motivators
It include things like good labor relations, good It includes things such as having a challenging
working conditions, job security, good wages, and interesting job, recognition and
benefits such as sick pay paid holidays and a responsibility, promotion and so on.
pension
KEY TERMS
Organizational structure: The levels of management and division of responsibilities within an
organization.
- A disadvantage of functional organization is that people are often more concerned with the success of
their own department than that of the company as a whole, so there are permanent conflicts.
-Factors leading companies to flatten the hierarchies: the modern tendency and advanced IT systems.
Many companies have also been forced to cut back and eliminate jobs in recessions.
-The owners of small firms want to keep as much control over their business as possible, whereas
managers in larger businesses who want to motivate their staff often delegate decision making and
responsibilities to other people.
-Matrix management: in which people report to more than one supervisor.
-Teams are not always very good at decision making, and usually require a strong leader.
KEY TERMS
Glocalization: is a combination of the words “globalization” and “localization”. The term is used to
describe a product or service that is developed and distributed globally but is also adjusted to
accommodate the user or consumer in a local market.
Culture: is defined as the complex system of values, traits, morals, and customs shared by a society.
Context: refers to the stimuli, environment, or ambience surrounding an event.
The Lewis Model: was developed by linguist and leading cross-cultural specialist Richard D.Lewis.
The model divides humans into 3 clear categories, based not on nationality or religion but on
BEHAVIOR, namely, Linear-active, Multi-active and Reactive.
High-context culture: is a culture by which rules of communication are primarily and dominantly
transmitted through the use of contextual elements. These include specific forms of body language, the
social or familial status of an individual, and the tone of voice employed during speech. High-context
cultures usually do not have rules that are explicitly written or stated.
UNIT 5: RECRUITMENT
KEY TERMS
Recruitment: the process from identifying that business needs to employ someone up to the point at
which applications have arrived at the business.
Employee selection: the process of evaluating candidates for a specific job and selecting an individual
for employment based on needs of the organization.
A job analysis: identifies and records the responsibilities and tasks relating to a job.
A job description: outlines the responsibilities and duties to be carried out by someone employed to do
a specific job.
A job specification: a document which outlines requirements, qualifications, expertise, physical
characteristics, etc for a specified job.
Internal recruitment: when a vacancy is filled by someone who is an existing employee of the
business.
External recruitment: when a vacancy is filled by someone who is not an existing employee and will
be new to the business.
Induction training: an introduction given to a new employee, explaining the business’s activities,
customs and procedures and introducing them to their fellow workers.
On-the-job training: occurs by watching a more experienced worker doing the job.
Off-the-job training: involves being trained away from the workplace, usually by specialist trainers.
Advantages of internal recruitment
-It is quicker and cheaper than external recruitment, which may involve expensive advertising.
–The person is already known to the business and their reliability, ability and potential are known.
KEY TERMS
The primary sector of industry extracts and uses the natural resources of Earth to produce raw
materials used by other businesses.
The secondary sector of industry manufactures goods using the raw materials provided by the primary
sector.
The tertiary sector of industry provides services to consumers and other sectors of industry.
A mixed economy has both a private sector and a public state sector.
Public sector: the sector of the economy in which organizations are owned and controlled by the state
(government)
KEY TERMS
Production: the process of converting inputs such as land, labor and capital into saleable goods, for
example shoes and cell phones.
Inventories: the stock of raw materials, work-in-progress and finished goods held by a business.
Lean production: the production of goods and services with the minimum waste of resources.
Job production: the production of items one at a time.
Batch production: the production of goods in batches. Each batch passes through one stage of
production before moving onto the next page.
Flow production: the production of every large quantity of identical goods using a continuously
moving process.
Just-in-time (JIT): is a production method that involves reducing or virtually eliminating the need to
hold inventories of raw materials or unsold inventories of the finished product.
What are the benefits and limitations of different production methods?
KEY TERMS
Logistics: the marketing activity that involves planning, implementing, and controlling the physical
flow of materials, final goods, and related information from points of origin to points of consumption to
meet customer requirements at a profit.
Inbound logistics: the area of logistics that involves bringing raw materials, packing, other goods and
services, and information from suppliers to producers.
Materials handling: the movement of goods within a warehouse, from warehouses to the factory
floor, and from the factory floor to various workstations.
Outbound logistics: the area of logistics that involves managing the flow of finished products and
information to business buyers and ultimate consumers.
Reverse logistics: the area of logistics that involves bringing goods back to the manufacturers because
of defects or for recycling.
Supply chain: A network of facilities that performs the function of procurement of materials,
transformation of these materials into finished products, and the distribution of these products to
customers.
Logistic management: That part of supply chain management, which plans, implements, and controls
the flow and storage of goods between the point of origin and the point of consumption.
UNIT 9: QUALITY
KEY TERMS
Quality: to produce a good or a service which meets customers expectations.
KEY TERMS
Market: the set of all actual and potential buyers of a good service; the place where people buy and
sell; the people who trade in a particular good; to make goods available to buyers and to encourage
them to buy them.
Market leader: the company with the largest market share.
Market niche: a small company that concentrates on one or more particular niches or small market
segments.
Market research (GB) or marketing research (US): the collection, analysis and reporting of data
relevant to a pacific marketing situation (e.g proposed new product).
Market segment: part of a market, a group of customers with specific needs, defined in terms of
geography, age, sex, income, occupation, life-styles etc.
Market segmentation: the act of dividing a market into distinct groups of buyers who have different
requirements or buying habits.
Market share: the sales of a company (or brand or product) expressed as a percentage of total sales in
marketing-the process of identifying and satisfying customers’ needs and desires.
Marketing channel: the set of intermediates a company uses to get its goods to their users.
Marketing mix: the set of all the various elements in a marketing programme, and the way a company
integrates them.
Marketing strategy: a plan or principle designed to achieve marketing objectives.
Product life cycle: the standard pattern of sales of a product over the period that it is marketed.
Marketing begins with “the four Ps”: product, place, promotion and price.
KEY TERMS
Advertorial: A paid-for advertisement which includes editorial content; normally identified in a print
magazine with two word “Advertisement” printed as a head across the top of the page to distinguish
it from genuine (in theory unbiased) editorial content.
Advertising agency: The organization that takes care of advertising for clients.
Advertising campaign: A time-limited set of ads- campaigns may run across different media, and
for one month or ten years, but can be categorized together as the are execution of an central idea.
Demographics: Describing an audience by age, gender, ethnicity, or location- i.e the facts about them.
Focus Groups: Small, select groups representing a target audience who are paid to answer questions
at the behest of a market research organization.
Product Placement: The practice of paying for a branded product to be used by a character in a movie
- e.g Jame Bond driving a BMW Z3.
Product Positioning: Establishing the market niche of a product- which may not be as brand leader-
and advertising to the appropriate segment of the audience.
USP: Unique Selling Proposition/ Point - a highlighted benefit of a product which makes it stand out
from all rival brands.
Two functions of advertising: To inform customers about products and services and to persuade them
to buy them.
Disadvantages of traditional advertising: it is expensive and it does not always reach the target
customers and it is not always welcome as it interrupts customers when they are trying to do something
else.
Role of advertising agencies: To create advertisements and develop a media plan
3 different methods of determining ads spending? Spending a fixed percentage of current sales
revenue/ spending as much as competitors/ increasing current spending in order to increase sales
Ways of using Internet to advertise? Blogs, online forums, commenting on blogs, podcasts, viral
video.
1. What do you think makes an advertisement memorable?
KEY TERMS
Deposit: To place money in a bank; or money placed in a bank.
Liquidity: Available cash, and how easily other assets can be turned into cash.
Collateral: Anything that acts as a security or guarantee for a loan.
A mortgage: A type of loan used to purchase or maintain a home, land, or other types of real estate.
The borrower agrees to pay the lender over time, typically in a series of regular payments that are
divided into principal and interest. The property then serves as collateral to secure the loan.
Overdraft: Something that occurs when you purchase with your debit card or write a check for an
amount that exceeds your checking account’s available balance. Many bank accounts offer overdraft
protection to help avoid overdraft fees. Some banks don't charge overdraft fees at all.
A current account: An account at a bank against which checks can be drawn by the account
depositors; a checking account.
A savings account: A deposit account that generally earns higher interest than an interest-bearing
checking account. Savings accounts limit the number of certain types of transfers or withdrawals you
can make from the account each monthly statement cycle.
A deposit account: A bank account maintained by a financial institution in which a customer can
deposit and withdraw money.
Solvency: When banks have enough money to cover potential losses. Banks are expected to maintain a
sufficient level of capital to remain solvent and avoid failure. The FDIC (Federal Deposit Insurance
Corporation) and other federal regulators work with banks to maintain standards for solvency.
Maturity date: This is the date of expiration for the contractual obligation of a financial instrument.
For example, certificates of deposit have a maturity date that depends on the length of the CD term.
When the CD matures, you have the option to withdraw the money. Some banks and credit unions also
allow you to roll it into a new CD or enable the CD to renew automatically.
Wealthy individuals can also use private banks, which provide them with banking and investment
services, and hedge funds, which are private investment funds for wealthy (both individuals and
institutions) that use a wider variety of (risky) investing strategies than traditional investment funds, in
order to achieve higher returns.
1. Which of the banking facilities do you use?
- *7 Internet banking facility :- it can help by transfer money to another account by online
facility.
- 24*7 mobile banking apps :- easy to use and secure more through banking channel.
Government subsidy :- All subsidy are given in your bank account to eliminate the middlemen.
The Major uses of banking in these area by government.
KEY TERMS
Cost accounting: Calculating all the expenses involved in producing something, including materials,
labor, and all other expenses.
KEY TERMS
Business cycle model: a model showing the increases and decreases in a nation’s real GDP over time;
this model typically demonstrates an increase in real GDP over the long run, combined with short-run
fluctuations in output.
Expansion: the phase of the business cycle during which output is increasing.
Recession: the phase of the business cycle during which output is falling.
Depression: a deep and prolonged recession.
Peak: the turning point in the business cycle between an expansion and a contraction; during a peak in
the business cycle, output has stopped increasing and begins to decrease.
Trough: the turning point in the business cycle between a recession and an expansion; during a trough
in the business cycle, output that had been falling during the recession stage of the business cycle
bottoms out and begins to increase again.
Recovery: when GDP begins to increase following a contraction and a trough in the business cycle; an
economy is considered in recovery until real GDP returns to its long-run potential level.
Potential output: The level of output an economy can achieve when it is producing at full
employment; when an economy is producing at its potential output, it experiences only its natural rate
of unemployment, no more and no less.
Growth trend: The straight line in the business cycle model, which is usually upward-sloping and
shows the long-run pattern of change in real GDP over time.
Positive output gap: The difference between actual output and potential output when an economy is
producing more than full employment output; when there is a positive output gap, the rate of
unemployment is less than the natural rate of the unemployment and an economy is operating outside
of its PPC (Production Possibilities Curve).
Negative output gap: The difference between actual output and potential output when an economy is
producing less than full employment output; when there is a negative output gap, the rate of
unemployment is greater than the natural rate of the unemployment and an economy is operating inside
of its PPC (Production Possibilities Curve).
Difference between recession and depression: A downturn that lasts more than six months is called
a recession; one that lasts for a year or two is generally called a depression or a slump.
External (or exogenous) theory which looks for causes outside economic activity, such as
scientific advances, natural disaster, elections or political shocks, demographic changes and so on.
1. What is management’s responsibility for the financial statements?
An acceptable financial reporting framework should be used by the management in the
preparation and presentation of the financial statements. Management should also identify financial
reporting framework which is used in preparation and presentation of financial statements. Financial
statement should be prepared for general purpose and it should also fulfill the requirement of local laws
and regulations.
2. What are the limitations of the balance sheet?
KEY TERMS
Ethical standard: A rule for moral behavior in a particular time.
Ethical behavior: Doing things that are morally right.
Ethical lapse: Temporary failure to act in the correct way.
Ethical dilemma: A choice between two actions that might both be morally wrong.
Ethical stance: A stated opinion about the right thing to do in a particular situation.
Ethical issue: An area where moral behavior is important.
Business Ethics: Standards of business behavior that promote human welfare and “the good”.
Corporate Social Responsibility (CSR): A company’s commitment to improving or enhancing
community well-being through discretionary contributions of corporate resources. There are five
dimensions of CSR: Environment, Social, Economic, Stakeholder, and Volunteerism.
1. What is corporate responsibility?
Corporate responsibility (CR), also known as corporate social responsibility (CSR) or business
sustainability, is about the ethics which drive an organisation’s activities and how it operates so that
it’s viable over the long term. These two factors are intrinsically linked because a business that
damages the systems on which it depends will ultimately be unsustainable.
2. What do companies need to do to show they exercise good corporate responsibility?
- Volunteer
- Invest in social and environmental initiatives
- Practice ethical labor
- Promote philanthropy
- Be environmentally conscious
3. Do you think making huge profits means companies can never be responsible?
It varies from company to company and totally dependent on the culture. Some companies strive
to make huge profits by hook or crook and a few concentrate on customer experience.
4. Can a company survive if it show no corporate responsibility?
KEY TERMS
Job insecurity: The fear that you might lose your job.
Employability: The extent to which a person has skills that employers want.
Downsizing: Decreasing the number of permanent employees.
Core: The central part of something (e.g. a company’s workforce)
Efficiency: a situation in which a person, company, factory,etc. Uses resources such as time,
materials, or labor well, without wasting any.
Rationalization: to make a company, way of working, etc.more effective, usually by combining or
stopping particular activities, or by employing fewer people.
Redundancy package: All the payments and advantages that a company gives to workers who have
lost their jobs because they are no longer needed.
Restructuring: To organize a company, business, or system in a new way to make it operate more
effectively.
Delocalization: To move the location of an enterprise.
1. Do you think restructuring can help a business become more efficient?
Restructuring business could help to increase its efficiency by enabling shut down un-profitable
areas of business and focus on enhancing profits in other areas.
2. What is delocalization?
Moving some of a business’s activities(accounting, production,...) to another place or country.
3. How can you interpret the term “business efficiency”?
Business efficiency refers to how much a company or organization can produce as it relates to
the amount of time, money and resources needed. In other words, a business's efficiency measures how
well it can transform things like materials, labor and capital into services and products that produce
revenue.
4. What is the purpose of the rationalization?
To reduce costs and improve efficiency and effectiveness.
5. What does “redundancy package” mean?
All the payments and advantages that a company gives to workers who have lost their jobs
because they are no longer needed.
6. What notable cases of restructuring or downsizing or delocalizing have there been in
the news recently? What was the reaction?
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