UNIT 1 – MANAGEMENT
A good manager should:
follow the company’s goals
help subordinates to accomplish their own goals and objectives
help young colleagues to develop
know how to lead people
know how to motivate people
make a maximum profit for the owners (the shareholders)
meet the targets they have been set
succesfully execute plans and strategies
Manager’s tasks:
planning (setting objectives, deciding how to achieve tchem – developing strategies, plans, precise tactics, allocating resources of people/money)
organizing (analyse and classify the activites of the organization and relations among tchem; divide work into activities, select people to perform tasks)
integrating (practise the social skills of motivation/communacition; make people form teams; make decisions about pay/promotion, organize and supervise the work of subordinates)
measuring performance
developing people
Others: consider the future, change the objectives when necessary, introduce innovations.
UNIT 2 – WORK AND MOTIVATION
THEORY X (McGregor)
pessimistic approach to workers
people dislike work and avoid it if they can, they are lazy
people avoid responsibility and would rather be told what to do
people are motivated by fear of losing their job
they should be closely supervised and controlled
applied by managers of factory workers in large-scale manufacturing
relates to the basic needs at the bottom of Maslow’s hierarchy
THEORY Y
worki s necessary to people’s psychological well-being
people are motivated mainly by money
most people are far more creative, ambitious, self-motivated than their employer realize
people want to be interested in their work and, given the right conditions, they will enjoy it
under the right conditions (job security, financial rewards), most people will accept responsibility and will want to realize their own potential
relevant to skilled professionals – managers, specialists, programmers, scientists, engineers
relates to higher needs of maslow’s hierarchy
HIERARCHY OF NEEDS (A. Maslow)
physiological needs – air, food, drink, clothing, shelter, warmth etc.
Safety needs – security, protection, stability
Love and belonging needs – family, friendships, relationships, work groups etc.
Esteem needs – achievement, status, recognition, reputation etc.
Self-actualization needs – personal growth and fulfilment
SATISFIERS & MOTIVATORS (F. Herzberg)
Satisfiers – workers take them for granted – good labour relations, good working conditions, job security, good wages, benefits such as sick pay, paid holidays and a pension
Motivators – challenging and interesting job, recognition and responsibility, promotion etc.
UNIT 3 – COMPANY STRUCTURE
Wikinomics – collaborating whit people outside the traditional company structure, letting people around the world cooperate to improve an operation or solve a problem, and paying tchem for their ideas.
COMPANY STRUCTURES:
The chain of command=line structure – traditional structure, hierarchical, pyramidal, with one person or a group of people at the top, and an increasing numer of people below at each level; every people know their line managers/subordinates
Functional structure – complicated activities – for large companies; specializes departments – production, finance, marketing, sales, HR; they have to consult each other; disadvantage – conflicts over what the objectives are
Flattening hierarchies and delegating responsibility – take out layers of management, make organisation flatter, small firms, more controll
Matrix management – people report to more than one superior, quite complex, several departments
Teams – wholly autonomous, temporary groups responsible for an entire project and are split up after that, require strong leader
UNIT 4 – MANAGING ACROSS CULTURES
Glocalization – conflict between globalization/localization
Linear-active – Britain, the USA, Germany – organized, rational, try to act logically rahthet than emotionally, plan in advance, like to do one thing at a time, respecting rules, regulations, contracts, universalist-rules apply to everybody, individualist
Multi-active – Southern Europe, Latin America, Africa – feelings are more important, emotions, intuition, relationship, connections, people like to do many things at the same time, they are flexible, good at changing plans, happy to improvise; believe in social or company hierarchy, respect status; particularist- believe, that relationships should be more important than rules/regulations, collectivist
Reactive – Asia – prefer to listen and then react to it, avoid confrontation, rarely interrupt speakers, avoid eye contact, formulate approaches which suit both parties
UNIT 5 – RECRUITMENT
Filling a vacancy:
Discover why the person has resigned
Prepare job description to see needs
Decide to replace/not replace person
Consider, whether there i san internal candidate
When no, hire an employment agency/advertise the vacancy
Follow up the referencesof candidates and invite short-listed candidates for an interview
Final selection
Write to all other candidates to inform tchem that they have been unseccesfull
Documents: CV, covering letter
Interview:
Research the company
Be confedential/ enthusiastic
Be prepared to talk about strengths/weaknesses
Problems you have sold/ difficult situations you have faced
Hobbies – sth memorable, interesting
UNIT 6 – WOMEN IN BUSINESS
Propotion of women in business/ compulsory quotas
Glass ceiling - the unseen, yet unbreakable barrier that keeps women from rising to the upper rungs of the corporate ladder, regardless of their qualifications or achievements
UNIT 7 – SECTORS OF THE ECONOMY
The primary sector – agriculture, axtraction of the raw materials from the earth
The secondary sector – manufacturing industry, in which raw materials are turned into finished products
Tertiary/service sector – the commercial services that help industry produce and distribute goods to their final consumer, as well as activities such as education, healthcare, leisure, tourism and so on
Quaternary sector – consists of information services such as computing, ICT, consultancy and R&D
UNIT 8 – PRODUCTION
Supply chain – a network of organizations involved in producing and delivering goods or a service
The advantages of large facilities/inventory:
Long lead time may allow competitors to enter the market
Economies of scale
Lead time increases -> customers go to other suppliers
Lost sales/market share
More flexible in product scheduling
Can meet variation in product demand
Protection against variation in raw material deliveries
Take advantage of quantity discounts in purchasing
The disadvantages of large facilities/inventory:
Finding enough workers/coordinating materisl flows can become more difficult
Costs of storage, handling, insurance, depreciation, the opportunity cost of capital
Risk of obsolescence, theft, breakage
Friedman’s argument – conflict prevention:
No two countries that are both part of a major global supply chain will ever fight a war against each other as long as they are both part of the same global supply chain
UNIT 9 – LOGISTICS
Pull strategy – company manufactures according to current demand; small inventory; when pieces are removed from stock, replacements are automatically ordered from suppliers(replenishment strategy), they do not planning ahead, outsourcing, small subcontractors
Just-in-time – kanban – pull strategy – lean production, continous flow manufacture, agile manufacturing, nothing is bought until it is needed
Push strategy – (MRP) Manufacturing Resources Planning – production is based on estimates of future demand, begins according to the planned production lead time; supplies are scheduled to meet expected demand, often incorporate safety stocks, safety lead Times
UNIT 10 – QUALITY
TQM – Total Quality Management – developed by American – W. Edwards; in the 1940s = quality management; attitude and a corporate culture that are dedicated to providing customers with products and services that satisfy their needs; no defects, perfect service; eliminate waste; continously improving quality in all business activities; workers can stop production to solve problems – quality is more important than maximing output/reducing costs
2 kinds:
Taken-for-granted quality - reliability, work properly
Enchanting quality – sense of beauty, elegance
UNIT 11 – PRODUCTS
Product – anything that can be offered to a market that might satisfy a want or need – services, people, places, organizations
Brand – a name/symbol/logo that distinguishes products and services from competing offerings and makes consumer remember the company, product, service… they can present consumer’s attitude
Corporate branding – name in all products – phillips, yamaha
Individual branding – give each product its own brand – procter&gamble (greater market share)
UNIT 12 – MARKETING
Marketing – a proces of developing, pricing, distributing and promoting the goods or services that satisfy needs.
Marketing – market research, new product development, distribution, advertising, product improvement.
Market segmentation – dividing a market into submarkets or segments according to customers’ requirements or buying habits.
Marketers have to:
Identify or anticipate consumer need
Develop a product or service that eets that need better than any competing products/services
Persuade target customers to try the product or service
In long term, modify if to satisfy changes in consumer needs or market conditions
Marketing mix – 4P’s:
Product – quality, features, style, brand name, size, packaging, services, guarantee
Price – list price, discounts, the length of payment period, Possible credit terms
Promotion – advertising, publicity, sales promotion, personal selling
Place – distribution channels, coverage of the market, locations of points of sale, inventory size
Product life cycle:
Introduction stage:
The sales volume is low and customers have to be persuaded to try the product
Costs are high
The company can choose between high skim pricing to recover development costs, or low penetration pricing to buil market share rapidly, if there are already competitors
Promotion is aimed at educating potential consumers (innovators, early adopters) about the product, building product awareness
Growth stage:
Public awareness about the product increases and sales volume rises significantly
Costs are reduced due to economies of scale, profitability increases
Price can remain unchanged because demand is increasing but competitors aren’t usually yet well established
Promotion is aimed at much broader audience (the majority of product’s users)
Maturity stage:
Sales volume peaks
The product’s features may have to be changed so that it differs from competing brands, which involves new costs
Prices may have to be reduced because competitors are established in the market, but companies try to defend their market share while also maximizing profits
Promotion emphasizes product differentiation
Decline stage:
Sales volume begins to go down
Costs are too high compared to sales-product is discontinued or company is reducing costs to minimum – company continues to offer the product to loyal customers
The price is maintained or greatly reduced to liquidate stocks if product is abandon
No promotion
Sales-driven companies – focused on changing customer’s mind to fit the product
Customer-driven – change their products to fit customers’ requests
Market-driven – adapting their products to fit their customers’ strategies
UNIT 13 – ADVERTISING
Advertising:
Inform about the existence and benefits of products/services
Persuade people to buy tchem
Spending:
A fixed percentage of current sales revenue
As much as their competitors (the comparative-parity method)
Word-of-mouth advertising – people telling their friends about products/services
Viral marketing – companies getting people to spread commercial messages via Internet, P2P (blogs, forums, commenting, social networking websites, videos on YouTube)
UNIT 14 – BANKING
Services:
A current account
A savings or deposit account
Cashpoints/ ATMs
Chequebook
credit/debit card
loan/mortgage/overdraft
internet banking
investment advice
buying-selling foreign currency
standing orders/direct debits – ways od paying regular bills at regular intervals
Retail banks (commercial) – receive deposits from, and make loans to, individuals and small companies
Investment banks – work with big companies, give financial advice, raising capotal by issuing stocks or bonds, arranging mergers and takeover bids; offer stockbroking, portfolio management services
Private banks – for wealthy individuals, hedge funds- private investment funds, risky strategies to achieve higher returns
Islamic banks – offer interest-free banking
Non-bank financial intermediaries- car manufacturers, food retailers, department stores
Subprime crisis/credit crunch:
Lenders granted mortgages to ‘subprime’ borrowers.
The mortgage lenders sold mortgage-backed securities to financial institutions.
American house prices fell and many borrowers stopped repaying.
The value of MBSs fell to almost zero and many banks lost billions of dollars.
Some went bankrupt, and others had to be rescued by governments.
There was a credit crisis as there was little capital left for lending and borrowing.
Microfinance – distribute very small loans to poor people often without collateral or it can be social collateral – group of people help each other to repay the loan
UNIT 15 – VENTURE CAPITAL
Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc.
UNIT 16 – BONDS
Raising capital:
Issue new shares – equity finance
Borrow money – debt finance
Bondholders get back:
Principal – their original investment
Coupon – interest payments
Bonds:
Safer than stocks (bankrupt company sells it assets – bondholders are among the creditors who might get some of their money back) BUT stocks pay a higher return
Bond interest is tax deductible (deduct from the profit before paying tax), dividends from already taxed profits
Bond interest has to be paid
Are saleable, can be traded on he secondary bond market
If interest rates rise, existing bonds lose value
COMPANIES
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- raise capital - bond interst is tax deductible -cheaper than credits - don’t lose ownership |
- bond interest and principal has to be paid - fixed interest |
3 types: government bonds, corporate bonds, high-yield bonds
UNIT 17 – STOCKS AND SHARES
Companies issue stocks to expand their operations. They go public – offer these stocks for sale to financial institutions. Selling stocks for the first time is called IPO. Companies use an investment bank to find buyers, underwrite stock issue. They can be traded on secondary market at the stock exchange on which company is listed. Stock prices rise and fall depending on supply and demand. The nominal value of a share – the price written on it 0 is rarely the same as its market price. Companies can distribute part of their profits to shareholders as an annual dividend or keep the profits in the company, which causes the value of the stocks to rise.
Bull market – most stocks are raisning
Bear market – most stocks fall in value
Hedge funds – private investment short-term funds for wealthy investors that trade in securities and derivatives and try to get higher returns whether markets move up or down.
UNIT 18 – DERIVATIVES
Derivatives – finanial instruments whose prices are dependent upon or derived from underlying assets such as stocks, bonds, commodities, curriencies, interest rates and market indices.
Future – contract agreement to buy or to sell a security, commodity of financial instrument at a predetermined price, at a predetermined point in the future
Option – offers the buyer the right (not obligation) to buy (call option) or sell (put opion) an asset at an agreed-upon price during specific period of time or on a specific date
Commodities – raw materials, primary products, such as metals, cereals, coffee, they are traded on special markets
Hedging – making contracts to buy/sell commodities/financial assets in the future to protect against price changes
Speculation – buying assets in the hope of making capital gain by selling tchem later at higher price
Interest rate swap – agreement to exchange future interest payments with another company, f. r. floating rate loan for a fixed interest loan
Currency swap – agreement between 2 parties who exchange principan and fixed rate interest payments on a loan in one currency for principal and fixed rate interest payments on an equal loan in another currency
UNIT 19 – ACCOUNTING
Liabilities – debts, taxes, interest payments
Double-entry bookkeeping – records the dual effect of every transaction – payments made on debit/credit
Historical cost accounting – record assets at their original purchase price minus accumulated depreciation
Current cost accounting – values assets at the price that would have to be paid to replace tchem today
Financial statements:
Balance sheet – shows the value of a business’s assets, liabilitiesd, its capital on a particular date
Cash flow statement – gives details of money coming into and leaving the business, divided into day-to-day operations, investing, financing
Income statement – shows the difference between the revenues and expenses of a period
UNIT 20 – MARKET STRUCTURE/ COMPETITION
Maket leader – with the biggest market share
Market challenger – the second-biggest company in the industry
Market follower – a lot of small companies
USP = unique selling proposition – sth that makes product different from any ohther product
Cluster – a group of similar things/companies situated close together
Perfect competition – rare situation in which all producers in a market are too small to affect the price
Monopoly – market with only one producer who can fix an artificial price
Natural monopolies – such as water, gas, electicity distribution, prices regulated by governments
Oligopoly – only a few sellers
Cartel/trust – where companies in the same industry collaborate by coordinating prices, limiting production and distribution, sharing out markets, preventing new competitors entering the market
Individuals, partnership:
Unlimited liability for debts
Limited company has legal entity (os. Prawna)
Liable for the amount of capital that has been invested in it
Private limited company (sp. z o. o.)
Owners put up capital themselves
Write Certificate of Incorporation – company’s name, purpose, registered office, capital
Bylaws – duties of directors, rights of stockholders
Public limited company (s. a.):
Company which apply to a stock exchange
Right issue – existing shareholders can buy new shares
Bonus issue – company issue new shares instead of paying dividend
Annual General Meeting
UNIT 21 - TAKEOVERS
Horizontal integration – acquiring a competitor in the same field of activity -> larger market share, reduce competition
Vertical integration – acquiring businesses involved in other parts of their supply chain -> cost savings:
Backward integration – suppliers of raw materials/components
Forward integration – buying dustributors/retail outlets
Raid – buying as many of company’s stocks as possible on the stock market; unlikely to result in the acquisition of controlling interest
Takeover bid – public offer to a company’s stockholders to buy their stocks at a certain price – above the current market price – during a limited period of time
If board of company agrees – friendly bid, if not – hostile bid
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*getting larger market share *reducing competition *diversifying production *optimizing the use of factories/equipment *economies of scale *synergy effect *R&D |
*grassroots lay-offs *unique products disappear *capital flows abroad *damage of interesr of the shareholders of acquiring company |
Leveraged buyouts – company is undervalued – close and sell assets; raiders borrow money to buy the companies, usually by issuing bonds
Management buyout – company’s own manager buy its stocks
They sell subsidiaries, pay back the bondholders (junk bonds) -> it’s asset-stripping
UNIT 22 – GOVERNMENT/TAXATION
Functions: raise revenue to finance government expenditure, dissuade people from skoking, drinking alcohol; encourage capital investment, redistribute wealth.
Excise duty, wealth tax, value-added tax, income tax, capital transfer tax, capital gains tax, inheritance tax
Progressive, flat, regressive
Direct, indirect
Tax avoidance-legal, highly-paid perks, tax evasion
Tax havens, loophole, tax shelter – we can postpone tax – life insurance policies, pension plans.
UNIT 23 – BUSINESS CYCLE
GDP alternately grows and contracts.
Upturn – part of economies expand, worka t full capacity, production, employment, investments, profits, prices, interest rates tend to rise; a lond perios – boom
Downturn – economy start to contract after it heats a peak, the demand is declining, economy worka t below its potential; investment, outpu, employment, profits, commodity, share prices, interest rates fall; more than 6 months – recession, year or 2 – depression, slump
Reasons: (internal)
Spending/consumption decisions,based on demand
Savings
People’s expectations – confident about the future will spend
Investment – linked to consumption-demand
(exteral)
Scientific advances
Natural disasters
Elections, political shocks
Demographic changes
Fiscal policy – government actions concerning taxation and public expenditure
Monetary policy – government or central bank actions concerning the rate of growth og the money in circulation
Keynese :
market forces could produce a durable equilibrium with high unemployment, fewer goods being produced, fewer people employed, reduced rates of income and investment
recommend governmental internention in the economy to counteract the business cycle:
during an inflationary boom they should increase taxation or decrease spending
during a recession they should increase expenditure, decrease taxation, increase money supply, reduce interest rates
Friedman – classical theory:
in the long term excess savings ould cause interest rates to fall, investment to increase again
money is neutral – in the long run, increasing the money supply will only change the price level – lead to inflation and have no effect on employment/output
government should abandon managing the level of demand in the economy, because:
they can’t forsee a coming recession more quickly than companies that make up the economy
their fiscal measures Begin to take effect to late, when the economy is recovering, it can make next swing in the business cycle even greater
UNIT 24 – CSR
Stockholder model:
Milton friedman – business is to make profits
Only people can have responsibilities, not companies
Social expenditures are unbusinesslike:
Spending stockholers’ money
Raise the price to customers
Lower wages of some employees
Its undemocratic – those should be governmental tasks – solving social problems; if the government don’t do it – voters din’t want it
Stakeholder model:
Stockholders might prefer to receive lower dividends but live in a socjety with less pollution, unemployment, fewer social problems
Managers have responsibilities to all the groups of people with a stake in or an interest in or a claim on the firm (employees, suppliers, customers, local community, stockholders)
All of these groups should be represented ona company’s board of directors
CSR problems:
Bribing – to win orders
Industrial espionage – spying on competitors R&D
Built-in obsolescence
Lobbying – trying to persuade politicians to pass favourable laws
Whistle blowing – revealing confidential information to the police that company is breaking health/safety regulations
Telling only half the truh in ads
UNIT 25 – EFFICIENCY & EMPLOYMENT
Downsizing – decreasing the numer of permanent employees
Outsourcing – using other businesses as subcontractors
Job sharing – employing 2 people on a part-time job instead of 1 person at full time
Relocation – moving some of business’s activities to another place
Delayering – removing unproductive parts of the management
Rationalization/ restructuring – reorganizing the company to reduce costs/ improve efficiency
Contract work – temporary employment to do a project
Casual work – not regular
Rightsizing – downsizing or increasing the size of an organization
UNIT 26 – EXCHANGE RATES
Exchange rate – the price at which one currency can be exchanged for another
Currency fixed against dolar/gold=gold convertability
System of floating exchange rates = determined by supply and demand=friedman
Purchasing power parity – PPP – the cost of goods should be the same in every country= if price level increases because of inflation, its currency should depreciate – its exchange rate should go down It doesn’t happend because of speculation.
Central banks – sell their currency to lower it
UNIT 27 – INTERNATIONAL TRADE
Free trade – imports and exports of goods and services without any government restrictions.
Protectionism – restricting imports by way of trade barriers such as tariffs and quotas.
Trade barriers – government policies or regulations taht restrict international trade
Tariff – tax charged on imports
Quota – maximum quantity of goods of a specific kind hat can be imported into a country
Absolute advantage – country’s ability to produce goods at a lower cost than any other country
Comparative advantage – country’s ability to produce particular goods more efficiently (fewer resources, lower costs) than some other countries
Infant industry – in a early stage of development and which can’t survive competition from foreign companies
Strategic industry – particularly important to a country’s economy
FREE TRADE
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Against |
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Lead to peace and stability Guarantees the largest possible foreign markets for producers and exporters Guarantees consumers the lowest possible prices Breaks down barriers between peoples and nations Lead to economic growth and development Ensure secure supplies and a greater choice of components and raw materials for producers, and of products and services for customers |
Protect infant industry Underdeveloped countries can’t produce drugs, medicines Do not promote internationally labour, but go where is cheapest Protect of human rights Damages local production |