Business Introduction

INTRODUCTION TO BUSINESS

Anum Shah Roll No#3367

WHAT IS BUSINESS?

WHAT IS BUSINESS

“An institution organized and operated to provide goods and services to the society under the incentive of private gain” (Wheeler)

WHAT IS BUSINESS

“A business embraces all those functions involved in the making, buying and transportation of goods” (Thomas Evelyn)

PROCESS OF ANY BUSINESS INPUT PROCESS OUTPUT

Factors Of Production

Land

Labor

Capital

Entrepreneurship

Information Resources

Distribution

Production

Inventory

Purchasing

Finance - Accounting

Marketing - Sales

Realization of Profits

Demand Satisfaction

Need Fulfillment

INPUT

All the factors of productions are the input of any business

Land Labor Capital Entrepreneurship

LAND:

“Stands for all natural resources which yield an income or which has exchange value .It represents those natural resources which are useful and scarce, actually or potentially”.

LABOR:

“Any exertion of mind or body undergone partly or wholly with a view to some good other than the

pleasure derived directly from the word is called labor”

:

DIVISION OF LABOR

Simple division of labor: division of society into major occupations e.g. carpenters, blacksmith, weavers, etc .it may be also called functional divisional of labor

Complex Division of Labor: split up into a number of processes and sub-processes and is carried out by a separate group of people

Territorial Division Of Labor

Kinds Of Labor

Physical Labor: Intellectual Labor: Presentation:

CAPITAL

“Capital refers to that part of a man’s wealth which is used in producing further

wealth or which yields an income”

CAPITAL

It is raised from the sole proprietor, partners or shareholders.

Shapes of Capital: plant , machinery ,tools , and accessories , stocks of raw material ,goods in process and fuel

ENTREPRENEURS

Entrepreneur is the innovator An entrepreneur is an individual who accepts

financial risks and undertakes new financial ventures.

INFORMATION

Information resource plays a vital role

ECONOMIC SYSTEM

ECONOMIC SYSTEM

All businesses work under certain economic system . The basic element s around which the business revolves is capital which is the pivotal factor in determining the type of economic system. every system is basically meant to provide, goods and services to the people at the right price. It allows to establish business organizations so that they produce goods and services demanded and needed by the consumers.

KINDS OF ECONOMIC SYSTEM

Capitalism Socialism Islamic Mixed economy

CAPITALISM

“The economic system allowing private ownership of all or most of the means of

productions and distribution(land, industrial, railways) with the main motivation of profit”

CAPITALISM

The economic system in which capital flows freely in the society and finds its way to production and distribution in the private sector with the minimum interference of the government

SOCIALISM

“socialism is an economic organization of society in which the material means of production are

owned by the whole community and operated by the organs representatives of, and responsible to, the community according to a general plan, all members of the community being entitled to

benefits from the results of such socialized planned production on the basis of equal rights”

(Dickenson)

MIXED ECONOMIC SYSTEM

“Mixed economic system is a system comprising of both capitalism and socialism

pattern” “In other words an economic system in which

few characteristics of capitalism and few of socialism are found is called mixed economy”

ISLAMIC ECONOMIC SYSTEM

“It is the system free from exploitation . It allows every person to earn his or her livelihood from legitimate sources and

discourages concentration of wealth and extravagance”

MARKET BASED ECONOMY

MARKET“Originally”, Says Jevons, “a market was a public place

in a town where provisions and other objects were exposed to sales”

“Economists understand by the term market not any

particular market place in which things are bought and sold but the whole of any region in which buyers

and sellers are in such free intercourse with one another that the price of the same goods tends to

equality easily and quickly”(Cournat French economist)

ESSENTIALS OF MARKET

A commodity which is dealt with The existence of buyer and seller A place, may be a certain region, a country Such intercourse between buyers and sellers

that one price should prevail for the same commodity at the same time

WHAT IS DEMAND?

“The various quantities of a given commodity or service which consumers would buy in one

market in a given period of time at various places, or at various incomes, or at various

prices of related goods”(Bober)

QUANTITY DEMANDEDPrice(thousand)

Quantity Demanded (kg)

10 5000

20 4000

30 3000

40 2000

50 1000

QUANTITY SUPPLIEDPrice(thousand)

Quantity supplied KG

10 1000

20 2000

30 3000

40 4000

50 5000

0

1000

2000

3000

4000

5000

6000

1 2 3 4 5

price

quantity demanded

PRICE DETERMINEDPrice(thousand)Quantity Demanded (kg)

Quantity supplied KG

10 5000 100020 4000 200030 3000 300040 2000 400050 1000 5000

0

1000

2000

3000

4000

5000

6000

1 2 3 4 5

Price(thousand)

QuantityDemanded (kg)

Quantitysupplied KG

MARKET BASED ECONOMY HISTORY

HISTORY

The Industrial Revolution Laissez-Faire and the Entrepreneurial Era The Production Era The Marketing Era The Global Era The Internet Era

THE FACTORY SYSTEM AND THE INDUSTRIAL REVOLUTION

The result of many fundamental, interrelated changes that transformed agricultural economies into industrial onesWidespread replacement of manual laborProductivity and technical efficiency grew dramaticallyEfficiency was also enhanced

LAISSEZ-FAIRE AND THE ENTREPRENEURIAL ERA

the government should not interfere in the economy business function without regulation according to its own “natural” laws

THE PRODUCTION ERA

Productivity emphasisMass productionCar manufaturing

THE MARKETING ERA

business must focus on identifying satisfying consumer wants in order to be profitable

THE GLOBAL ERA

Technological growth Global market Globally consumption Global production

THE INTERNET ERAHow does the growth of the Internet affect business?

1. The Internet will give a dramatic boost to trade in all sectors of the economy, especially services.

2. The Internet will serve to level the playing field, at least to some extent, between larger and smaller enterprises regardless of what products or services they sell.

3. The Internet also holds considerable potential as an effective and efficient networking mechanism among businesses.

INFLATION

INFLATION

“inflation is the pervasive and sustained rise in the aggregate level of prices measured by an index of the cost of various goods and services. Repetitive price increases erode the purchasing power of money and other financial assets with fixed values, creating serious economic distortions and uncertainty. ”

INFLATION

“The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling” “Inflation is a key indicator of a country and provides important insight on the state of the

economy and the sound macroeconomic policies that govern it”

A Bundle of MarksAfter World War I (1914-

1918), inflation in Germany was so high that millions of marks were required to buy even the most basic item. As a result, German money frequently had more value as kindling than as legal tender. Shown here, a German woman prepares to light her stove with a bundle of paper currency.

CAUSES OF INFLATION

Demand-pull inflation when aggregate demand exceeds existing

supplies forcing price increases and pulling up

wages, materials, and operating and financing costs

CAUSES OF INFLATION

Cost-push inflation when prices rise to cover total expenses

and preserve profit margins

EVALUATING ECONOMIES


Economic growth“Economic growth occurs whenever people take resources and rearrange them in ways

that make them more valuable. “


Full Employmentthe economic condition when everyone who wishes to work at the going wage-rate for their type of labor is employed

UNEMPLOYMENT“AN ECONOMIC CONDITION MARKED BY THE FACT THAT INDIVIDUALS ACTIVELY SEEKING JOBS REMAIN UN HIRED”

GROSS DOMESTIC PRODUCT

“The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and

government spending, plus the value of exports, minus the value

of imports”

GDP PER CAPITA An approximation of the value of goods produced per person in

the country, equal to the country's GDP divided by the total number of people in the country.

GDP of a country to which income from abroad remittances of nationals living outside and income

from foreign subsidiaries of local firms has

been added.


budget deficit occurs when an entity spends more money than it takes in.

The balance of trade is the difference between the monetary value of exports and imports in an economy over a certain period of time.

TYPES OF BUSINESS ORGANIZATION

TYPES OF BUSINESS ORGANIZATIONS

SoleProprietorship

SoleProprietorship

PartnershipPartnershipCorporationCorporation

SOLE PROPRIETORSHIP

SOLE PROPRIETORSHIP

“It is the business which is owned by a single owner who

is referred to as sole proprietor and enjoys benefits which other ownership cannot”

SOLE PROPRIETORSHIPAdvantages:› Freedom

› Privacy

› Succeed or fail alone

› Simple to form

› Low start-up costs

Disadvantages:› Unlimited liability

› Dissolves when owner dies

› Depends on resources of single individual

Unlimited LiabilityLegal principle holding owners responsible for paying off all debts of a business

PARTNERSHIPPARTNERSHIP

A General Partnership is constituted between individuals if they agree to enter into a general or particular business, to share the profits and losses together without fixing any limitations or conditions.

.

A Special or Limited Partnership is an agreement entered into to allow a special partner, whose name does not appear in that of the firm, to put in a limited amount of capital and to receive a corresponding share of the profits, and be held correspondingly responsible for the contracts of the firm, but only to the extent of the capital contributed by him, and no special partner can interfere in or transact firm business

PARTNERSHIPAdvantages:› New talent & money

stimulate growth

› Easier to borrow money

› Resources of more than one individual

› Relatively easy to form

› Partners are taxed as individuals

Disadvantages:› Partners share

unlimited liability

› Must file specific info about business & partners

› Dissolves when partner leaves or dies

› Difficult to transfer ownership

› Internal conflict

ALTERNATIVES TO GENERAL PARTNERSHIP

Limited Partnership

Type of partnership consisting of limited partners and an active or managing partner

Limited PartnerPartner who does not share in a firm’s management and is liable for its debts only to the limit of his or her investment

General Partner(Active Partner)

Partner who actively manages a firm and who has unlimited liability for its debts

“PARTNERSHIP LIABILITY”GENERAL PARTNERSHIPGENERAL PARTNERSHIP

Claims of CreditorsClaims of Creditors

General Partner’s General Partner’s Personal AssetsPersonal Assets


Partnership’s AssetsPartnership’s Assets

“PARTNERSHIP LIABILITY”LIMITED PARTNERSHIPLIMITED PARTNERSHIP

Claims of CreditorsClaims of Creditors


Partnership’s AssetsPartnership’s Assets Limited Partner’s Limited Partner’s Personal AssetsPersonal Assets

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CORPORATIONCORPORATION

Business that is legally considered an entity separate from its owners and is liable for its own debts; owners’ liability extends to the limits of their investments

CORPORATION

Corporations may: Sue & be sued Buy, hold, & sell property Make & sell products to customers Commit crimes & be tried & punished for them

CORPORATION

Advantages: Limited liability Continuity Easy to transfer

ownership Easy to raise

money

Disadvantages: Tender offer High start-up costs Charter required Double-taxation

TYPES OF CORPORATIONSClosely Held (Private) Corporation

Corporation whose stock is held by only a few people and is not available for sale to the general public

Publicly Held (Public) Corporation

Corporation whose stock is widely held and available for sale to the general public

S Corporation

Hybrid of a closely held corporation and a partnership; organized and operated like a corporation, but treated as a partnership for tax purposes

TYPES OF CORPORATIONSLimited Liability Corporation (LLC)

Hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability

Professional Corporation

Form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability

Multinational or Transnational Corporation

Form of corporation spanning national boundaries

CREATING AND MANAGING A CORPORATION

Creating a Corporation

Corporate Governance

Special Issues in Corporate Ownership

CREATING A CORPORATION

Three basic steps: Consult an attorney Select a state in which to incorporate. File articles of incorporation and corporate

bylaws

CREATING A CORPORATIONArticles of Incorporation

Document detailing the corporate governance of a company, including its name and address, its purpose, and the amount of stock it intends to issue

Bylaws

Document detailing corporate rules and regulations, including election and responsibilities of directors and procedures for issuing new stock

CORPORATE GOVERNANCECorporate Governance

Roles of shareholders, directors, and other managers in corporate decision making

Stockholder (or Shareholder)

Owner of shares of stock in a corporation

Stock

Share of ownership in a corporation

STOCK OWNERSHIP & STOCKHOLDERS’ RIGHTS

Initial Public Offering ( IPO)First offer of shares in a closely held corporation to outside investors

Preferred StockGuarantees holders fixed dividends and priority claims over assets but no corporate voting rights

Common StockPays dividends and guarantees corporate voting rights, but offers last claims over assets

ProxyAuthorization granted by a shareholder for someone else to vote his or her shares

“CORPORATE GOVERNANCE HIERARCHY”

OfficersOfficers

Board of DirectorsBoard of Directors

StockholdersStockholders

Responsible for corporation’s overall performance

Set major policies, report to shareholders, legally responsible for corporate actions

Purchase ownership shares, and own the corporation

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STRATEGIC ALLIANCE

An agreement between two or more individuals or entities stating that the involved parties will act in a certain way in order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths.

JOINT VENTUREJOINT VENTURE

A contractual agreement joining together two or more parties for the purpose

of executing a particular business undertaking. All parties agree

to share in the profits and losses of the enterprise.

SPECIAL ISSUES IN CORPORATE GOVERNANCE

Employee Stock Ownership Plan (ESOP)Arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control its voting rights

Institutional InvestorsLarge investors, such as mutual funds and pension funds, that purchase large blocks of corporate stock

CORPORATE OWNERSHIP

MERGERSMergers are business combination transactions

involving the combination of two or more companies into a single entity. Most state

laws require that mergers be approved by at least a majority of a company's shareholders if the merger will have a significant impact on either the acquiring or target company.

MERGERSHorizontal Merger

Merger involving firms in the same industryVertical Merger

Merger between firms that are customers and/or suppliers to one another

Conglomerate Merger Merger between firms in unrelated businesses

Takeover TacticsA takeover is considered friendly when the acquired company

DIVESTITURES & SPIN-OFFSDivestiture

Strategy whereby a firm sells one or more of its business units

Spin-OffStrategy of setting up one or more corporate units as new, independent corporations

SMALL BUSINESS AND ENTREPRENEURSHIP

Advantages of new ventures New blood New ideas Flexibility in the tenure

ENTREPRENEUR AND ITS CHARACTERISTICS

An entrepreneur is an individual who accepts financial risks and undertakes new financial

ventures.

CHARACTERISTICS:

Spontaneous creativity The ability and willingness to make decisions A generally risk-taking personality Courageous Hardworking Strong leadership

THREATS TO NEW SMALL BUSINESS

No expertise Lack of experience Lack of financial resources Less tenure of operating the business

LAUNCHING OPTIONS

Start up Buying an existing business franchising

START UP

Advantages: You are the boss You are not answerable to others

START UP

Disadvantages: Burden of work Less resources of credit Difficult to create an image

BUYING AN EXISTING BUSINESS

Buying a business that is currently running Steps and processes Personal priority Business opportunity Reviewing potential target Arrangement of financing Conduct due diligence

FRANCHISING

“Any arrangement in which the owner of trademark, trade name or copyright has licensed others to

use it and sell its goods or services “

ADVANTAGES OF FRANCHISING

Training and guidance Brand name appeal Proven track record Financial assistance

DISADVANTAGES OF FRANCHISING

Franchise fee Franchisor control Unfulfilled promise

IMPACT OF NEW BUSINESS ON THE ECONOMY

New employment opportunities New ideas New innovations

INTRAPRENEURS

“Individual within an organization who is allowed to operate as an entrepreneur.

Intrapreneurs can be senior managers in companies that have decided to introduce

internal competition where areas of the business are run as profit centers”

MINIPRENEURS

Are the individuals launching super small scale enterprises. Include micro business

HUMAN RESOURCE MANAGEMENT

“Set of organizational activities directed at attracting, developing, and maintaining an

effective workforce”

“Activities undertaken to attract ,develop and maintain an effective workforce within an

organization”

HRM CHALLENGES: MAJOR HURDLES Age factors

Environment factors Cultural factors

HUMAN RESOURCE PLANNING

assess future recruitment needs anticipate and possibly avoid redundancies formulate training programmes develop a promotion and career development

policy including succession planning keep staff costs to a minimum while

permitting salaries to be competitive assess future premises requirements.


“The forecasting of human resources needs and thr projected matching of individuals with the expected job vacancies”


JOB ANALYSISJob analysis may be defined as a methodical

process of collecting information on the functionally relevant aspects of a job. Job analysis tells the human resources personnel the time it

takes to complete relevant tasks

JOB ANALYSIS the tasks that are grouped together under a

single job position the ways to design or structure a job for

maximizing employee performance

the employee behavioral pattern associated with performance of the job

the traits and attributes of a proper candidate for the job

the ways the data can be used to develop human resource management

JOB DESCRIPTION

Job description: A job description gives an account of the work and duties associated with a particular job. It describes the way the job is performed currently. Most job descriptions contain the following information:the job name

summary description of the job a list of duties for the job a list of organizational responsibilities related

to the job

JOB SPECIFICATIONS

Job specifications define the characteristics of the activities associated with the job and

given in the job description. They describe the skill sets and qualifications that a candidate for the job should possess.

INTERNAL RECRUITING

Advantages of internal recruiting: Recruiting costs Motivation Familiarity

INTERNAL RECRUITING

Disadvantages of internal recruiting: Inbreeding EEO Criteria More training

INTERNAL RECRUITING

Potential Advantages easier to assess candidates since more

information is available less costly and quicker than an external

search promoted employee is already familiar with

organization policies, culture, etc.

signals to employees that career opportunities exist in organization

improve employee morale and organization loyalty

INTERNAL RECRUITING

Potential Disadvantages narrowing of thinking and stale ideas

(inbreeding) possible discontent of rejected applicants boss / subordinate relations can be

problematic

ripple effect difficult to do with rapid growth affirmative action goals may be more

difficult to achieve

EXTERNAL RECRUITING

Potential Advantages provides new ideas / fresh perspectives initiate a turnaround reduce expensive training by hiring

experienced employee

may be less upsetting to present organizational hierarchy

allows rapid growth increase diversity

RESOURCES OF EXTERNAL RECRUITMENT

Employment websites Govt and federal agencies Personal references Job fairs Trade associations

EXTERNAL RECRUITING

Potential Disadvantages takes longer and costs more little information about candidate’s ability to

fit with rest of organization destroys incentive of present employees to

strive for promotion

outsider takes time to become familiar with current systems

current organization members may fight new ideas

SELECTION: MAKING THE RIGHT CHOICE

APPLICATION

An application form is an effective method of gathering info about the applicant

INTERVIEW

Serves as a two way communication process that allows both the organization and

applicant to collect info that would otherwise be difficult to obtain

TYPES OF INTERVIEW

Structured interviewQuestions are written in advance UnstructuredNo prior questions are made

TESTS

“A written test desired to measure a particular attribute such as intelligence”

REFERENCES AND BACKGROUND

Reference and background are checked

ORIENTATION

orientation course: a course introducing a new situation or environment

Introduction to the employee is given

TRAINING

It is a learning process that involves the acquisition of knowledge, sharpening of

skills, concepts, rules, or changing of attitudes and behaviors to enhance the

performance of employees.

ON-THE-JOB TRAINING

On-the-job training (OJT) is one of the best training methods because it is planned,

organized, and conducted at the employee's worksite.

OFF-THE-JOB TRAINING

Employee training at a site away from the actual work environment. It often utilizes

lectures, case studies, role playing, simulation, etc. See also on the job

training.

COMPENSATION

something (such as money) given or received as payment or reparation (as for a service or

loss or injury)

SEPARATION: BREAKING UP IS HARD TO DO As termination or retirement of the emplyees

take place

MARKETING

“The process of planning and executing the conception, pricing, promotion and

distribution of ideas ,goods, services to create exchanges that satisfy individual and

organizational objective”

MARKETING OBJECTIVE

Marketing objectives are set out for the organization’s marketing program.

MARKETING MIX

The major marketing management decisions can be classified in one of the following four categories:

Product Price Place (distribution) Promotion

SUMMARY OF MARKETING MIX DECISIONS

Product Price Place Promotion

FunctionalityAppearanceQualityPackagingBrandWarrantyService/Support

List priceDiscountsAllowancesFinancingLeasing options

Channel membersChannel motivationMarket coverageLocationsLogisticsService levels

AdvertisingPersonal sellingPublic relationsMessageMediaBudget

PRODUCT LIFE CYCLE

A new product progresses through a sequence of stages from introduction to growth,

maturity, and decline. This sequence is known as the product life cycle and is

associated with changes in the marketing situation, thus impacting the marketing

strategy and the marketing mix.

PRODUCT LIFE CYCLE DIAGRAM

PRODUCT

Consumer goods Industry goods

CONSUMER GOODS

Convenience goods Shopping Specialty unsought

INDUSTRY GOODS

Purchase of merchandise Fixed asset purchase

PRICING

Through this a company receives reward against its product

More than the cost price Maximizing profit Minimizing loss

PROMOTION

“Communication techniques aimed at informing, persuading a customer to buy a particular product”

DISTRIBUTION

After promotion distribution of that product takes place proper channels are used for example wholesaler or retailer

MARKETING ENVIRONMENT

Cultural Social Legal political

MARKET SEGMENTATION

The division of a market into different homogeneous groups of consumers is known as market segmentation

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate.

Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status.

Psychographic segmentation is based on variables such as values, attitudes, and lifestyle.

Behavioral segmentation is based on variables such as usage rate and patterns, price sensitivity, brand loyalty, and benefits sought.

TARGET MARKET

A certain group of people who have a same taste of products and services

FACTORS INVOLVES IN TARGETING MARKET

Social Cultural Political Environmental

MARKETING RESEARCH

Managers need information in order to introduce products and services that create value in the mind of the customer. But the perception of value is a subjective one, and what customers value this year may be quite different from what they value next year. As such, the attributes that create value cannot simply be deduced from common knowledge.

Marketing Research vs. Market Research These terms often are used interchangeably,

but technically there is a difference.Market research deals specifically with the

gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing problems

MARKETING PLAN OUTLINE

I. Executive Summary A high-level summary of the marketing plan. II. The Challenge Brief description of product to be marketed

and associated goals, such as sales figures and strategic goals.

III. Situation Analysis Company Analysis Goals Focus Culture Strengths Weaknesses Market share

Customer Analysis Number Type Value drivers Decision process Concentration of customer base for particular products Competitor Analysis Market position Strengths Weaknesses Market shares

Collaborators Subsidiaries, joint ventures, and distributors, etc. Climate Macro-environmental PEST analysis : Political and legal environment Economic environment Social and cultural environment Technological environment

IV. Market Segmentation Present a description of the market

segmentatiOnV. Alternative Marketing Strategies List and discuss the alternatives that were

considered before arriving at the recommended strategy. Alternatives might include discontinuing a product, re-branding, positioning as a premium or value product, etc

VI. Selected Marketing Strategy Discuss why the strategy was selected, then

the marketing mix decisions (4 P's) of product, price, place (distribution), and promotion

VII. Short & Long-Term Projections The selected strategy's immediate effects,

expected long-term results, and any special actions required to achieve them. This section may include forecasts of revenues and expenses as well as the results of a break-even analysis

VIII. Conclusion Summarize all of the above

CONSUMER BEHAVIOR

The action that a person takes in Purchasing and using product and services The mental and social processes that

proceed and follow these actions

INFLUENCES ON CONSUMER BEHAVIOR

Social Personal Psychological

MOTIVATIONMotivation is a desire to achieve a goal,

combined with the energy to work towards that goal. Students who are motivated have a desire to undertake their study and complete the requirements of their course.

THEORY X AND THEORY Y

Theory X Assumptions: People inherently dislike work People must be coerced or controlled to

do work to achieve objectives People prefer to be directed

Theory Y Assumptions: People view work as being as natural as

play and rest People will exercise self-direction and -

control towards achieving objectives they are committed to

People learn to accept and seek responsibility

TWO FACTOR THEORYMotivator factors increase job satisfaction: Achievement

Recognition

Work itself

Responsibility

Advancement

Growth

Hygiene factors are those whose absence can create job dissatisfaction:

Supervision

Company policy

Working conditions

Salary

Peer relationship

Security

EQUITY THEORY Specific goals increase performance, and

difficult goals, when accepted, result in higher performance than easy goals.

An employee compares her/his job's inputs-outcomes ratio with that of referents.

If the employee perceives inequity, she/he will act to correct the inequity:

Lower productivity Reduced quality Increased absenteeism Voluntary resignation.

LEADERSHIP

Leadership is one of the most salient aspects of the organizational context.“The ability to influence people towards the

attainment of organizational goals”“Leadership is the ability to secure desirable actions from a group of followers voluntarily ,

with out use of coercion””

THEORIES

Trait thoery“Traits are the distinguished personal

characteristics of a leader , such as intelligence, value and appearance”

Behavioural theory

Situational Theories:• Focus on leadership in situations:different situations need differentkinds of leadership.• Leaders direct and a support.• Group competence and commitmentdetermines necessary skill mix.

Contingency Theories• Right leader’s style needs to be

matchedto the right setting.• Two major styles – Task motivated andrelationship motivated.• Three situation variables:– Leader-member relations– Task structure– Position power

Great Man Theories Based on the belief that leaders are exceptional people, born with innate qualities, destined to lead. The use of the term 'man' was intentional since until the latter part of the twentieth century leadership was thought of as a concept which is primarily male, military and Western. This led to the next school of Trait Theories

Situational Leadership This approach sees leadership as specific to the situation in which it is being exercised. For example, whilst some situations may require an autocratic style, others may need a more participative approach. It also proposes that there may be differences in required leadership styles at different levels in the same organisation

Transformational Theory The central concept here is change and the role of leadership in envisioning and implementing the transformation of organisational performance

Transactional Theory This approach emphasises the importance of the relationship between leader and followers, focusing on the mutual benefits derived from a form of 'contract' through which the leader delivers such things as rewards or recognition in return for the commitment or loyalty of the followers

Contingency Theory This is a refinement of the situational viewpoint and focuses on identifying the situational variables which best predict the most appropriate or effective leadership style to fit the particular circumstances

GLOBALIZATION

Name for the process of increasing the connectivity and interdependence of the

world's markets and businesses.

TRADING BLOCKS AND COUNTRY GROUPS

EUROPEAN UNIONAustria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, United Kingdomhttp://www.europa.eu.int/index_en.htm


OPEC MEMBER COUNTRIESAustria, Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, New Zealand, Netherlands, Norway, Poland, Portugal, Republic of Korea, Slovak Republic, Sweden, Switzerland, Turkey, United Kingdom, United States of Americahttp://www.opec.org/


SAARC MEMBER COUNTRIESBhutan, India, Maldives, Nepal, Pakistan, Sri Lanka http://www.saarc-sec.org/


NATO MEMBER COUNTRIESBelgium, Bulgaria, Czech Republic, Canada, Denmark, Estonia, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, uxembourg, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Turkey, United Kingdom, United States of America http://www.nato.int/


NAFTA MEMBER COUNTRIESCanada, Mexico, United States of Americahttp://www-tech.mit.edu/Bulletins/nafta.html


COMMONWEALTH OF INDEPENDENT STATES Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan http://www.cisstat.com/eng/index.htm


APEC MEMBER COUNTRIESAustralia, Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong, China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, United States of America, Vietnamhttp://www.apecsec.org.sg/

FDI

Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country. It is the establishment of an enterprise by a foreigner..Its definition can be extended to include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor.

BARRIERS TO INTERNATIONAL TRADE

A trade barrier is a general term that describes any government policy or regulation that restricts international trade. The barriers can take many forms, including the following terms that include many restrictions in international trade within multiple countries that import and export any items of trade.

BARRIERS TO INTERNATIONAL TRADE

Import duty Import licenses Export licenses Import quotas Tariffs Subsidies Non-tariff barriers to trade Voluntary Export Restraints Local Content Requirements Embargo

EMBARGO

In international commerce and politics, an embargo is the prohibition of commerce (division of trade) and trade with a certain country, in order to isolate it and to put its government into a difficult internal situation, given that the effects of the embargo are often able to make its economy suffer from the initiative.

TAX, TARIFF AND TRADE

The tax, tariff and trade laws of a political region, state or trade bloc determine which form of consumption and production tend to be encouraged or discouraged. All three are often changed by a trade pact.

SUBSIDY

Financial aid given by the government to individuals or groups.

CARTEL

A cartel is a counterfeit agreement among industries. It is an informal organization of producers that agree to coordinate prices and production. Cartels usually occur in

an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products.

Business Introduction

Documents

intellectual labor

certain economic system

type of economic system

division of society

business organizations

capital flows

shapes of capital

natural resources