A

1. Aspects of Entrepreneurial Process:

Identify & Evaluate Opportunity Develop Business Plan

Identify Resources Required Mgt of the resulting enterprise

2. (a) Business Plan, (b) Opportunity Assessment Plan (c) Brain Storming, is a method
of developing or generating new ideas to develop a new product for the company.

3. (a) Inventor, (b) Entrepreneur, (c) Intrapreneur, (d) all of them, is an individual who
creates something for the first time and is highly driven with his new ideas and own work.

4. (a) Partnership, (b) Single Proprietorship, (c) Corporation, (d) none of these has
distinct legal entity, a function of state law, who files own income tax.

5. (a) Job description, (b) Job analysis, (c) Job evaluation, (d) None of these, specify the
details of the work that is to be performed and any special conditions, or skills involved in
performing the job.

6. (a) Management Style, (b) Ability to Participate, (c) Employee Communications (d) all
of the these, considered to be among the factors affecting the impact of employee
compensation packages.

7. (a) Flexible, (b) Stable, (c) none of these, means able to respond quickly to competitive
threats.

8. (a) Radical, (b) Changing, (c) Line extensions, (d) all of these, considered to be types
of innovation.
9. (a) Joint Venture, (b) Strategic Alliances, (c) Partnership, (d) Mergers, considered to be
a hybrid organization which when formed has an immediate size and form.

10. Intrapreneurship = COC2 which means C= Creativity O= Ownership, C= Change & C =

Culture.

11. Problems of going public: (a) potential loss of control (b) less resources, (c) all of
these, (d) either a or b.

12. Ways of Financing the business: (a) Going Public, (b) Venture Capital, (c) all of these,
(d) either a or b.

13. Ways to define Niche Market: (a) Price, (b) Level of Quality, (c) Geographic, (d) none of
these, (e) all of these.

14. Business Valuation can be done thru: (a) Shareholder’s value only, (b) Customer’s
value, (c) none of these, (d) a and b.

15. Approaches to Business Valuation (a) Asset Base, (b) Discounted Cash Flow, (c)
Multiple of Profits, (d) all of these, (e) None of these
B.

1. Identify the Basic Functions of Management and discuss each one fully. An
example for each functions can help clarify it.

Management refers to the process of governing and controlling the

activities of the organization, to develop a business environment where the
employees can work cooperatively and achieve the business objectives. There
are 5 functions of Management,these are P O S D Con

PLANNING

Planning is the preliminary function of management which involves

deciding in advance what is to be done in the future, when is the right time to
do it, how we can do it and who will do it.

ORGANIZING

Organizing means systematically arranging, grouping, synchronizing

and ` coordinating the activities and resources (human, material and
financial) of the company so as to achieve the business objectives.

Organizing as a process involves:

1. Identification of activities.
2. Classification of grouping of activities.
3. Assignment of duties.
4. Delegation of authority and creation of responsibility.
5. Coordinating authority and responsibility relationships.

STAFFING

Is all about placing the right person at the right job. It involves having
and retaining an eligible and competent workforce to fill the vacancies in the
organization:

Manpower Planning (estimating man power in terms of searching,

choose the person and giving the right place).

1. Recruitment, Selection & Placement.

2. Training & Development.
3. Remuneration.
4. Performance Appraisal.
5. Promotions & Transfer.
 DIRECTING

Directing refers to the process of inspiring, motivating, counseling,

guiding, leading, supervising and monitoring the subordinates so that, they
can perform the assigned task in an efficient way.

Direction has following elements:

1. Supervision
2. Motivation
3. Leadership
4. Communication

CONTROLLING

Controlling is a backward looking process that helps in keeps a check

on the activities of the organization, to identify the errors and omissions in
the activities and take corrective actions in order to overcome the deviations
from its goal/

Therefore controlling has following steps:

1. Establishment of standard performance.

2. Measurement of actual performance.
3. Comparison of actual performance with the standards and finding out
deviation if any.
4. Corrective action.

1. In your own words, describe a Business Plan, and its importance

to business.

Whether you’re starting a small business or exploring ways to expand an

existing one, a business plan is an important tool to help guide your decisions. Think
of it as a road map to success, providing greater clarity on all aspects of your
business, from marketing and finance to operations and product/service details.

While some owners may be tempted to jump directly into start up mode,
writing a business plan is a crucial first step for budding entrepreneurs to check the
viability of a business before investing too much time or money. The purpose of a
business plan is to help articulate a strategy for starting your business. It also
provides insight on steps to be taken, resources required for achieving your business
goals and a timeline of anticipated results.
 For existing small businesses, a business plan should be updated annually as
a way to guide growth and navigate the expansion into new markets. Your plan
should include explicit objectives for hiring new employees, market analysis, financial
projections, and potential investors. The objectives should indicate how they’ll help
your business prosper and grow.

2. In establishing a business of your own if given a chance, would

you acquire an existing one? Support your answer.

When most people think of starting a business, they think of beginning from scratch
—developing your own idea and building the company from the ground up. But
starting from scratch presents some distinct disadvantages, including the difficulty of
building a customer base, marketing the new business, hiring employees and
establishing cash flow ... all without a track record or reputation to go on.

If you're worried about the difficulties involved in starting a business from the
ground up, you might decide that buying an existing business is a better fit for you.
When you buy a business, you take over an operation that’s already generating cash
flow and profits. You have an established customer base and reputation as well as
employees who are familiar with all aspects of the business. And you don't have to
reinvent the wheel—setting up new procedures, systems, and policies—since a
successful formula for running the business has already been put in place.

On the downside, buying a business is often more costly than starting from
scratch. However, it’s often easier to get financing to buy an existing business than
to start a new one. Bankers and investors generally feel more comfortable dealing
with a business that already has a proven track record. In addition, buying a
business may give you valuable legal rights, such as patents or copyrights, which
can prove very profitable.

Of course, there’s no such thing as a sure thing—and buying an existing

business is no exception. If you’re not careful, you could get stuck with obsolete
inventory, uncooperative employees or outdated distribution methods.

Buying the perfect business starts with choosing the right type of business for
you. The best place to start is by looking in an industry you're familiar with and
understand. Think long and hard about the types of businesses you are interested in
and which are the best matches with your skills and experience. Also consider the
size of business you're looking for, in terms of employees, number of locations and
sales.
1. What are the methods to measure and improve productivity? Explain in
detail.

Productivity is a measure of the efficiency of a machine, factory or person in

converting inputs into useful outputs. To calculate productivity,
you divide the average output per period by the costs incurred or the resources,
such as personnel, consumed in that period.

A. Monitoring employee progress

Various productivity measurement strategies involve monitoring employee

progress regularly. These approaches allow you to stay on top of the work being
done and make changes or set new goals when necessary.

One method is the daily check-in or team meeting. This involves meeting with
your team daily to discuss workflow, issues that may have come up or new
developments to your working procedures. By comparing how much work employees
have completed during a day or a week, you will a general idea of how productive
they are.

B. Customer satisfaction

A popular way of measuring productivity in a company offering services to

customers is to use customer feedback. For instance, customers who call a service
center may be asked once the call is over to complete a brief satisfaction survey. In
it, they will explain whether the employee answered their query and whether they felt
they were treated courteously.

The data obtained from customer surveys may then be combined with the
number of customers the service center has handled over a fixed period. This
approach enables you to get a more accurate sense of how productive the work you
and your colleagues are doing.

2. Discuss about international buying and import purchasing procedures in

terms of need, procedures and problems.
international purchasing when those purchasing activities are carried out
in international markets to support the firm's operations and ensure a reliable source
of supply. Global Sourcing is done as part of the buying process for getting
materials and products from other countries outside the home country for availing
special benefits. This is due to the fact that different countries have a different price
for the same products and services due to the extent of development. Another factor
that contributes to the lower price will be the availability of raw materials in the
specific country in abundant quantity. 
The following are the major reasons for doing global sourcing as part of international
business:

Accessibility of Raw Materials

If the raw material available for the manufacturing is available in other
countries it is good to depend on global sourcing for the supply. Possibilities for
economical factors also need to be considered while contacting global sources for
the requirement of the materials.

Availability of Cheap Wages

Certain tasks that are cheaper in other countries can be outsourced for
economical reasons. However, the quality of the service offered must be checked for
meeting the standards while choosing global supplies of labor. It should also be
ensured that the latest technology is being used for the manufacturing of goods is
being used by the employees in

Reciprocation of Services the other country.

In certain cases, global sourcing can be done for mutually agreeable terms. If
the products being manufactured by your company is being sold to another country
which has the required raw material then both import and export can be done in
that country. Better bargaining power can be utilized in such cases and mutually
agreeable terms can be reached.

Import trade refers to the purchase of goods from a foreign country.

The procedure for import trade differs from country to country depending
upon the import policy, statutory requirements and customs policies of different
countries. In almost all countries of the world import trade is controlled by the
government. The objectives of these controls are proper use of foreign exchange
restrictions, protection of indigenous industries etc. The imports of goods have to
follow a procedure. 

3. Explain the resource leveling and resource allocation procedure in

project management with example and explain the functions of project
planning, scheduling and control.

Resource Allocation

Resource allocation, also called resource loading, commits certain resources

to project plan activities. More than one resource and type of resource can be
allocated to each activity. Some project phases and activities require fewer
resources than others, and these requirements can vary during the length on the
work. For example, roles committed to a software development project might
include a team leader, change facilitator, business analyst, process owner, process
specialist, process modeler, solution architect, solution designer, programmer,
training specialist, technical writer and end user. However, the training specialist
and technical writer might not be required to join the team until the deployment
phase of the project. Therefore, these two resources are allocated to the
deployment phase of the project only.

Resource Leveling

After using the resource allocation process to define project resource

requirements, resource leveling is used to relate the requirements to available
resources. This leveling process ensures that resource demand does not exceed
available resources during a particular time frame, and in light of individual activity
inter dependencies. During resource leveling, resource requirements are
expressed in terms of the hours and days during which the resource is required.
For example, assume that during the resource allocation process, a programmer is
allocated for eight hours each day to a project. However, the original plan assigns
three different eight-hour tasks to the programmer on the same day. Using
resource leveling, the three tasks are rescheduled to occur on three different days.
As a result, the problem of the over allocation of the resource is resolved.

Resource Leveling Approaches

One of three resource leveling techniques are typically used to correlate

resource requirements to available resources: critical path, fast tracking and
crashing. Using the critical path method, required project activities are specified,
the time required to complete each activity is stated, and activity dependence is
identified. In turn, fast tracking enables tasks to be run simultaneously, and
crashing is used to assign additional resources to a project stage or activity. Each
technique is used to ensure particular project objectives are accomplished on time.

Benefits of Resource Allocation and Resource Leveling

Resource allocation and leveling support the proper allocation of business

resources during a project's life cycle. The appropriate allocation of resources
attempts to ensure that delays in the completion of tasks will be avoided. As a
result, the on-time completion of project tasks is more likely. Such completion of
tasks avoids conflicts in team member assignments, which can lead to budget
overruns. Through the avoidance of over- and under-allocation of resources, it is
more likely that a project is completed on time and within the budget.

4. Write a short note on:

JIT - Just in Time - Just-in-time also known as JIT is an inventory
management method whereby labour, material and goods (to be used in
manufacturing) are re-filled or scheduled to arrive exactly when needed in the
manufacturing process.

MMIS - Materials Management Information System - is a software

suite packaged as an integrated offering to meet materials management, human-
resources and back-office needs. At a minimum, MMISs should be designed to
interface readily with other mission-critical information systems in the enterprise.

QUEUING - The process of lining up items to be processed. Queuing may

refer to packets in a network that are waiting to be transmitted to the next node as
well as to telephone callers sitting in a "hold queue" waiting to be answered.
Depending on assigned priorities, items may leave the queue in a different order than
when they arrived.

5. Mention situations in (I) banking (ii) advertising, (iii)agriculture, (iv) hoteliering

where production and operations management is involved.
 Describe the inputs, outputs, processes, utilities used in these organization.

Banking: The usual inputs under the inter-mediation approach are

labour, materials, and deposits whereas the outputs are loans and
other income generating activities

Advertising:
Agriculture: The important inputs are seeds, fertilizers, machinery and
labour. The outputs from the system include crops, wool, dairy and
poultry products. Some of the operations involved are ploughing,
sowing, irrigation, weeding and harvesting.

Hoteliering:
 What are the different types of production and operation systems? Where would
each one of them be applicable? Give practical examples.


6. The following businesses are considering locating in your areas:

 Korean restaurant
 A sporting good store

6.1 Describe the positive and negative location factors for each of these
businesses.

6.2 Indicate the various types of layout and also give their advantages
and limitations.

Q1. Mention situations in (a) banking, (b) advertising, (c) agriculture, and (d)
hotellering where production and operations management is involved. Describe the
inputs, outputs, processes and utilities.

Q2. What are the hurdles in the globalization of services? Mention the managerial,
social and political issues. Are services, generally more difficult to globalize? What
are the implications in the Indian context of the newly liberalized economy?

Q3. Typical Linear Programming has one objective function. But, in many
practical situations, there could be more than one objective. How can one
take care of such a situation? Explain by means of an example.
Q4. How would different Queuing Disciplines affect waiting line
characteristics? Explain by giving examples.
The queuing discipline also affects the latency experienced by a packet, by
determining how long a packet waits to be transmitted. Examples of the common
queuing disciplines are First-in-first-out (FIFO) queuing, priority queuing (PQ), and
weighted-fair queuing (WFQ)

Q5. How would you control quality in a job-shop situation (where one
customer’s order may be different from another).

Q6. As a management discipline, does maintenance management differ

from production management? If yes, in what way?
Maintenance management involves keeping track of assets and parts. The
purpose is to ensure that the production proceeds efficiently and the minimum
amount of resources are wasted. On the other hand, the Production management
focuses on the production of goods and services, and is responsible for producing
parts at a required quantity, quality, cost and price.

Q7. Describe the use of information technology in supply chains.

The use of information technology in supply chain management provides
improved visibility and accountability. The use of technology can bring the
necessary transparency into the whole process. It allows the manufacturing
companies to have better control over product flow and information across the
supply chain. The benefits or contributions obtained in the supply chain
management are the following: 1) cost reduction; 2) operational efficiency and
process improvement; 3) quality, reliability and accuracy of information; 4)
integration and collaboration, 5) differentiation of products/services.

Q8. Inventory is a part of manufacturing strategy.’ Do you agree with this

statement? If so, explain why it should be only a part of the total
manufacturing strategy?
Inventory management is one of the most critical aspects of any
organization. Warehouse managers face many challenges which can benefit from it,
including reducing inventory-carrying costs and ensuring that enough inventory is on
to finish the jobs on tome, effective inventory management process are key to
streamlined business operations. It is important in manufacturing aspect as holding
excess inventory ties up your cash on hand. It is very difficult to maintain an
healthy balance between supply and demand. Inventory management, when done
well, saves time and money in this area. It also eliminates the risk of overproduction
and stocks-outs.

Q9. Can the Plant layout principles be applied to forming a layout of an

office? What criteria would you use in designing such a layout?

Q10. Would the LOB (Line Of Balance) technique be more useful to the
General Manager (Production) or to a Plant Superintendent?

Five Factors That Influence The Success

Of Your New Business Location

In order to be more competitive, a business must take into account the

elements that impact the immediate business landscape. Regardless if the plan
involves territory expansion or simply reinforcing strategy, every business should
overlay demographic profiles, competitor density, overheads, transport availability
and the potential workforce that is immediately available in order to decide on long
term strategies.

Read more about these factors below.

Demographics

Where you base your business is dictated by the type of people who will be
your nearest potential customers. There’s no point opening the world’s greatest
mobility scooter store in the heart of a student village or a nightclub in a quiet town
full of retirees. Seeing the relevant demographic data on a map makes it easier to
spot a place with favourable demographics that still meets your other logistical
needs.

Competitors

Basing your business near competitors can work both ways; on the one hand
there is the danger that you’ll lose customers to your rivals, especially if they
undercut you on price or have other benefits. On the other hand, you might benefit
from customers looking to visit multiple outlets easily – think of all the jeweller in
London’s Hatton Garden. Either way, competitor location data helps you find the hot
spots.

Overheads

Overheads vary widely, depending on location. Beyond the price of buying or

paying commercial rents for facilities and premises, you need to take into account
business rates set by local authorities and factor in variations in running costs, such
as commercial cleaning or alarm monitoring. Visual location data works particularly
well when taking into account multiple factors to find the perfect place.

Transport availability

Transport accessibility virtually affects any business. Naturally, manufacturers

need to consider the ease of accessing major roads, railways or airports for
distributing goods. But even retailers still need to take into account the ease of
receiving stocks and supplies. Not to mention customers: if you sell bulky items, you
need to be readily accessible by car. Look for time-based location analytic that will
warn you if what seems to be a great location for vehicle access is a no-go during
peak hours.

Workforce

It is good to be based where suitable staff can easily get to work. Assessing
this can range from crude categorization (younger staff for local bars) to more
sophisticated categories, such as academic background and subject expertise among
a skilled workforce. Data visualization will help location planning by showing where
your talent pool is deepest.

Conclusion

Businesses can analyse these factors individually or by comparison.

Individually, a business might see that the area demographics are in tune with their
ideal customer profile, the density of competing businesses around their location,
the transport accessibility and if an area has the potential to provide future skilled
employees.

By grouping some of the factors with competitors, businesses can gain

competitive insight. For example, profiling the nearby competitors might give
strategists a glimpse of how the businesses are performing locally in relation to area
demographics. Depending on the rival’s success and the associated overheads,
strategists could understand if their competitors are struggling to maintain their
territory.

Regardless of the business objectives, location analytic proves to be

invaluable in analyzing these factors.
 MARKETING MANGEMENT

1. Create your own products / Services by following the format below:

I. EXECUTIVE SUMMARY
1.1 Vision / Mission
1.2 Objectives
1.3 Mantra / Tagline
II. SITUATIONAL ANALYSIS
2.1 Products / Services
2.2 Best practices
2.3 Challenges
2.4 Competitor Analysis

III. TARGET MARKET

IV. PROCING STRATEGY
V. DISTRIBUTION PLAN
VI. PROMOTIONAL PLAN
VII. BUDGETING
VIII. CONCLUSION
 FINANCIAL MANAGEMENT

CASE 1
Types of Investments

Think of the various types of investments as tools that can help you achieve your
financial goals. Each broad investment type -- from bank products to stock and
bonds - has its own general set of features, risk factors and ways in which they can
be used by investors. The following are the most common types:
1. Stocks
2. Bonds
3. Investment Funds
4. Bank Products
5. Options
6. Annuities
7. Retirement
8. Cryptocurrencies
9. Insurance

Tasks:
1. Briefly describe each type of investment.
2. Give 2 pros and cons for each type of investment.
3. Elaborate more on the risks and rewards involves for each type of investment.
4. Give a short conclusion.

INVESTMENT TYPES:
1. STOCKS - a share which entitles the holder to a fixed dividend, whose payment
takes priority over that of common-stock dividend.

Pros and Cons: Advantage is, there is capital gain, if you invest wisely, your stocks
may significantly increase in value. That’s why some people regard the stock market
as the best way to build wealth. However, there's capital losses, any investment is a
gamble. That means you can lose money – even all your money. No matter how
safe a stock looks, the price could go backwards and the company could even
collapse.

Risks and Rewards: The most common type of risk is that your investment will lose
money. You can make investments that guarantee you won’t lose money, but will
give up most of the opportunity to earn a decent return in exchange.

2. BOND - A popular way to offset some risk from investing in stocks is to keep
some money invested in bonds. When you purchase bonds, you're essentially
lending money to a corporation, municipality, or other government entity.

Pros and Cons: A company’s bondholders may lose much or all their money if the
company goes bankrupt. There is no guarantee of how much money will remain to
repay bondholders.

Risks and Rewards: Some bonds are callable. This creates reinvestment risk,
meaning the investor is forced to find a new place for his money. As a consequence,
the investor might not be able to find as good a deal, especially because this usually
happens when interest rates are falling.

3. INVESTMENT FUND - is a supply of capital belonging to numerous investors

used to collectively purchase securities while each investor retains ownership and
control of his own shares. Types of investment funds include mutual funds,
exchange-traded funds, money market funds, and hedge funds.

Pros and Cons: The advantage of investment fund is diversification: Perhaps the
most positive aspect of a stock fund is that you can invest in a single stock fund and
have money invested in hundreds of individual stocks. However, the disadvantage of
this is, there is cost, costs involved with investing in a mutual fund that are passed
on to the investor. If you buy individual stocks, you'll pay to buy the stock, but you
shouldn't pay another fee until you sell the stock.

Risks and Rewards: One of the factors that let a mutual fund stands out from the
clutter is its ability to diversify the investments across a wide range of equity and
debt instruments. While the equity instruments appreciate the growth of the money,
the debt counterparts ensure regular income for the investors.

4. BANK PRODUCTS - means any of the following bank services: (a) commercial
credit cards, (b) stored value cards, and (c) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network services).

Pros and Cons: An extremely important benefit of any bank is its deep and wide
reach through the branch banking system and the benefits of large scale operations.
The wider the bank can reach, the better services it can provide. On the other hand,
this also increases the expenses that banks have to incur to safeguard their systems,
which are eventually charged from the customers.

Risks and Rewards: banks provide services of deposits and loans. In addition to
these, commercial banks provide many other services such as – credit cards, net
banking, investment instruments, purchase and sale of gold coins, and sometimes
insurance as well.
5. OPTIONS- are financial derivatives that give buyers the right, but not the
obligation, to buy or sell an underlying asset at an agreed-upon price and date.

Pros and Cons: Can avoid paying off bond debt, as well as reducing interest
payments and improving the debt/equity ratio. But the disadvantage of this is, it
reduces the earnings per share and weakens the control of current shareholders, but
only if conversion to shares occurs

Risks and Rewards: Traders can use options to protect against portfolio losses, snag
a stock for less than it sells on the open market (or sell it for more), increase the
return on an existing or new position, and lower the risk on speculative bets in all
sorts of market conditions.

6. ANNUITIES - is a financial product that pays out a fixed stream of payments to

an individual, and these financial products are primarily used as an income stream
for retirees.

Pros and Cons: Some people look to annuities to “insure” their retirement and to
receive periodic payments once they no longer receive a salary.

Risks and Rewards: If you’re thinking about buying an income annuity as part of
your retirement plan, you are likely looking forward to a lifelong guaranteed stream
of income and, of course, peace of mind. These advantages are very real, and may
make an annuity a good choice for you. The disadvantage of annuities can be pricey
- Variable annuities can get very expensive. Any time you consider one, you need to
understand all the fees that come with it to be sure that you pick the best option for
your goals and situation.

7.RETIREMENT- refers to financial strategies of saving, investment, and ultimately

the distribution of money meant to sustain one's self during retirement.

Pros and Cons: The advantage of retirement is the opportunity to invest in family
and personal relationships. but the con to this is the opportunity of cost of benefits
packages, that the earlier you access benefits packages the less benefit you’ll
receive.
Risks and Rewards: A retirement income plan may help to ensure that your client’s
assets last as long as their retirement. When thinking about how long they might
need income, many people tend to think in terms of life expectancy.

8.CRYPTOCURRENCIES is a digital or virtual currency that is secured by

cryptography, which makes it nearly impossible to counterfeit or double-spend.

Pros and Cons: Potential for high returns and Potential diversification are some the
advantages of cryptocurrencies. However, the disadvantages for this tool is high
volatility.

Risks and Rewards: This is where high risk gets to equal high reward. The
opportunities are vast in potential scope and we are only just at the beginning.
Cryptocurrency is just the tip of the spear.

9.INSURANCE - Insurance is a contract, represented by a policy, in which an

individual or entity receives financial protection or reimbursement against losses
from an insurance company.

Pros and Cons: The most obvious advantage of life insurance is also its functional
purpose. Life insurance is the exchange of a relatively small payment each month for
a very large amount of money if you die, a death benefit.

Risks and Rewards: Insurance can be compared to a backroom support system for
the economy or a play in the backyard, never attracting the limelight but chugging
along in the background with monotonous regularity, not quite associated with the
glamour of financial services, so to say in a very direct way.

CONCLUSION: Every investment is inherently connected with risk. Its existence

and diversity among various types of investments is one of the driving forces behind
the development of the capital market. The risk has also caused emergence and
development of alternative investments. Flourishment of this segment of the market
has also been influenced by periodical financial crises, which have been the driving
force behind the search for investments that would allow investment portfolio
diversification and would provide opportunities for profiting, even during price
declines on the market. Alternative investments constitute an effective tool for risk
diversification, however, they are not suitable for all investors.

CASE 2

If you’re looking to invest P1,000,000 you have a lot of options --- but some are
probably better than others. If you’re putting the money in the deposit account may
make the most sense. You could also invest in real estate, or put some of the
money into a diverse basket of stocks on the market. No matter what you do, you
always want to make sure you’re being smart and considering all of your options.
The question is simple -- Where should I invest your P1,000,000 right now? Discuss
fully why you choose some investments over others and show us the breakdown of
your investments.

If I have Php1,000,000 now, I will invest the Php500,000 and buy share of
stocks to big companies like Globe Telecom. Globe is established company and your
money will be secured and the great returns will be guaranteed. Globe is selling
P1,825 per share. With the present situation of our country due to pandemic,
internet and communication lines are very much in demand and these guarantee
that your investment will prosper. I will consider this as my passive income. The
250,000 will invested to PAG-IBIG mutual fund's MP2, as it offers high interest rate
at 8.11% per annum, one can truly be sure that their hard-earned money will
continue to be in bigger amounts as the savings under the MP2 program can only be
withdrawn after 5 years but, if a member wishes to still continue after 5 years,
renewal of the MP2 is always open. The remaining Php250,000 will be invested with
business thru partnership with friends or colleagues.

CASE 3

As the competition between digital banks and traditional banks intensifies,

financially-savvy people and personal finance junkies, at some point, will have to
deal with decisions related to where they should put their hard-earned money.
Digital banks vs. Traditional Banks, which is better? Discuss fully.
 Digital banks and traditional banks are both are licensed, covered by the PDIC
up to P500k per depositor, and both must have a license from the Bangko Sentral ng
Pilipinas. By knowing these information, we can safely say that a certain bank is
legit. A traditional bank has different branches located across the country where it
operates. You have to go to the nearest bank to make a deposit and withdraw
money. These traditional banks also have their own ATMs where their clients can
withdraw money instantly. They also offer online and phone banking. As to digital
banks, they have no physical branches since they are purely online. Anything you
need can be done at the comfort of your home. That includes opening an account
and depositing a check. Having a savings account in a traditional bank requires you
to have a specific maintaining balance. Now if you aren’t careful, they may charge
you a ‘below maintaining balance’ fee.

While with digital banks, you will not be required for a maintaining balance.
You can open an account without a single penny. Your entire account balance can
be withdrawn whenever you want without ever thinking of incurring withdrawal fees.
Digital banks are purely online, making them more susceptible to cybersecurity
issues. But let’s not fret. I’m pretty sure the back-end employees have provided
sufficient security in their servers to prevent financial catastrophes or total loss of
data. Unlike traditional banks, they have physical documents as a back-up in case of
security issues. Just so you know, the weakness of these digital banks is the internet
connectivity. If you happen to not to have any connection in case of emergencies
well yeah, that might be a problem. The best solution is to don’t put your eggs in
one basket. Have some cash at home and in a traditional bank. Or better yet, avail
of your digital bank’s physical debit card for faster withdrawals.

1. Give 2 examples how a business enterprise can cope with the

possible adverse effects of the global financial crises and
recent natural calamities. Discuss each fully.
Unplanned events can have a devastating effect on business enterprises.
Crises such as fire, damage to stock, illness of key staff or IT system failure could
make it difficult or even impossible to carry out your normal day to day activities. At
worst, this could see you losing important customers - and even going out of
business altogether.
But with good planning you can take steps to minimize the potential impact of
a disaster - and ideally prevent it from happening in the first place

A financial crisis occurs when a business loses value in its assets and the
company can't afford to pay off its debt. Typically, this is caused by a significant
drop in demand for the product or service.
 In these cases, the company must move funds around to cover immediate
short-term costs. Then, they'll need to reanalyze their revenue sources to look for
new ways to generate long-term income as well as increase their margins.

Example is Gold’s Gym: In the wake of all the closures and movement
restrictions in 2020, fitness giant Gold’s Gym filed for bankruptcy and permanently
closed around 30 gyms. It recovered from this crisis after RSG Group acquired them
in July of 2020.

Natural Crisis - If an earthquake destroys your office, you might call that a
crisis. While it may be rare, natural disasters like hurricanes, earthquakes, and
tornados can make a significant impact on your business. If your company is located
in an area that's exposed to extreme weather, you'll need to prepare an emergency
response in the unfortunate event that you're affected.

The best way to handle natural crises is to be proactive. Build your office in a
structure that's resilient to weather in your area and prepare an evacuation plan in
the event of an emergency. It will also help to prepare a contingency plan for
business operations in case your offices become unavailable.

Examples of a Natural Crisis

COVID-19: The COVID-19 pandemic impacted not only businesses but

organizations and families alike. While it took the world by surprise, many
businesses built remote work and/or health protocols into their operating
model to keep employees and customers as safe as possible.

2. How can a Finance Manager manage efficiently

a. ACCOUNTS RECEIVABLE
Accounts Receivable Management: From Chaos to Cash
In the end, billing and invoicing might be a pain or a challenge
for many small businesses and entrepreneurs, but it doesn’t have to
be. By making invoicing a priority, setting up a cyclical system,
getting organized and simply being polite, you will be amazed at
how quickly you get paid so you can spend less time on billing and
invoicing and more time on doing what you do best: growing your
business.
Here are seven easy tips for solid accounts receivable
management:
 1. Prioritize Billing and Invoicing.

Again, although billing is not the most enjoyable part of running and
managing a business, it should be made a priority. Cash flow is a very
important part of any business, so it’s important to get into the habit of
invoicing as soon as the work is finished. Additionally, the sooner you send an
invoice for a job that was recently completed, the more likely the
customer will pay in a timely manner while the job is still fresh in his or her
mind.

2. Build a System.
It can be easy to lose track of invoices, bills, and customers if you
don’t have a numbering system or if you are disorganized. Once you establish
a numbering or invoicing system, consistency is key for organization and to
ensure timely payments and a healthy accounts receivable rate.

3. Make it Easy for Customers to Pay.

In addition to building an internal invoicing system to ensure proper
accounts receivable management and timely payments, making it easy for
customers to pay invoices will also increase the likelihood of on-time
payments.
For example, consider setting up electronic payment methods, such
as an accounting or bookkeeping system with electronic payment method
options and capabilities for customers. Some systems include accounting or
bookkeeping systems, such as FreshBooks or QuickBooks or even PayPal.
The easier you make it for customers to pay their invoices, the faster
they will be paid.

4. Send Reminders.

We all get busy in life. It’s important to remember that

your customers are people, too, and they might forget about paying
your invoices. Therefore, it doesn’t hurt to send out reminders
periodically to help light the “polite” proverbial fire beneath your
customers. In fact, taking the time to send out reminders or follow
ups has a higher accounts receivable turnover rate than sending an
invoice and then never following up.

5. Be Clear About Payment Deadlines

 Many businesses set payment terms when sending
invoices to clients. For example, the most common is
“Net 30”, which means the business gives its client at least 30
days to make a payment. Payment terms can vary
depending on the amount of the invoice.

For example, invoices that are over $500 might have

payment terms of “Net 30” whereas invoices that are under
$500 might be “due on receipt”. All in all, regardless of your
payment terms, make sure they are clearly noted on each
invoice so that your customers immediately know when their
payments are due.

6. Review Your Pricing Model

Many businesses are inconsistent in what they charge
their clients. Of course, every client’s budget is different and
your business may offer different deals or discounts at
different times of the year or as part of a referral program.
Therefore, every client might be charged differently.

However, it may be time to review your pricing model.

Are you charging enough for your products and/ or services?
Are you selling your products and/ or services based on
value? If you are unsure of what to charge or if you are worried
about overcharging, then analyze what your competitors are
charging versus the value customers receive from working
with your business compared with a competitor.

If your customers believe they are getting a good value

by working with your company, then they are likely to pay
your invoices on time.

7. Don’t Forget Your Manners!

Last but certainly not least, don’t forget your manners
when invoicing your clients. Having a strong relationship with your
clients is one of the best ways to keep your accounts receivables
flowing.

Businesses that use polite language when delivering and/

or following up on their invoices, such as “please” and “thank you”
go a long way in getting paid in a timely fashion.
 b. INVENTORY – Here you'll find the 10 essential tips to effectively
manage your inventory for increased profitability and cash flow
management.

1. Prioritize your inventory.

Categorizing your inventory into priority groups can help you
understand which items you need to order more of and
more frequently, and which are important to your business but may
cost more and move more slowly. Experts typically suggest
segregating your inventory into A, B and C groups. Items in the A
group are higher-ticket items that you need fewer of. Items in the C
category are lower-cost items that turn over quickly. The B group is
what's in between: items that are moderately priced and move out the
door more slowly than C items but more quickly than A items.
2. Track all product information.
Make sure to keep records of the product information for items
in your inventory. This information should include SKUs, barcode data,
suppliers, countries of origin and lot numbers. You might also
consider tracking the cost of each item over time so you're aware
of factors that may change the cost, like scarcity and seasonality.
3. Audit your inventory.
Some businesses do a comprehensive count once a year. Others
do monthly, weekly or even daily spot checks of their hottest
items. Many do all of the above. Regardless of how often you do
it, make it a point to physically count your inventory regularly to
ensure it matches up with what you think you have.
4. Analyze supplier performance.
An unreliable supplier can cause problems for your inventory. If
you have a supplier that is habitually late with deliveries or
frequently shorts an order, it's time to take action. Discuss the
issues with your supplier and find out what the problem is. Be
prepared to switch partners, or deal with uncertain stock levels
and the possibility of running out of inventory as a result.
5. Practice the 80/20 inventory rule.
As a general rule, 80% of your profits come from 20% of your
stock. Prioritize inventory management of this 20% of items.
You should understand the complete sales life cycle of these
items, including how many you sell in a week or a month, and
closely monitor them. These are the items that make you the
most money; don't fall short in managing them.
6. Be consistent in how you receive stock.
It may seem like common sense to make sure incoming
inventory is processed, but do you have a standard process that
everyone follows, or does each employee receiving and
processing incoming stock do it differently? Small discrepancies
in how new stock is taken in could leave you scratching your
head at the end of the month or year, wondering why your
numbers don't align with your purchase orders. Make sure all
staff that receives stock does it the same way, and that all
boxes are verified, received and unpacked together, accurately
counted, and checked for accuracy.
7. Track sales.
Again, this seems like a no-brainer, but it goes beyond simply
adding up sales at the end of the day. You should understand,
on a daily basis, what items you sold and how many, and
update your inventory totals. But beyond that, you'll need to
analyze this data. Do you know when certain items sell faster or
drop off? Is it seasonal? Is there a specific day of the
week when you sell certain items? Do some items almost always
sell together? Understanding not just your sales totals but the
broader picture of how items sell is important to keeping your
inventory under control.
8.Order restocks yourself.
Some vendors offer to do inventory reorders for you. On the
surface, this seems like a good thing – you save on staff and
time by letting someone else manage the process for at least a
few of your items. But remember that your vendors don't have
the same priorities you do. They are looking to move their
items, while you're looking to stock the items that are most
profitable for your business. Take the time to check inventory
and order restocks of all your items yourself.
9. Invest in inventory management technology.
If you're a small enough business, managing the first eight
things on this list manually, with spreadsheets and notebooks, is
doable. But as your business grows, you'll spend more time on
inventory than you do on your business, or risk your stock
getting out of control. Good inventory management software
makes all these tasks easier. Before you choose a software
 solution, make sure you understand what you need, that it
provides the analytic important to your business and that it's
easy to use.
10. Use technology that integrates well.
Inventory management software isn't the only technology that
can help you manage stock. Things like mobile scanners and
POS systems can help you stay on track. When investing in
technology, prioritize systems that work together. Having a
POS system that can't communicate with your inventory
management software isn't the end of the world, but it might
cost you extra time to transfer the data from one system to
another, making it easy to end up with inaccurate inventory
counts.
c. FIXED ASSETS –
Integrate fixed assets with general ledger. This system typically
is overlooked during a review to modernize financial operations
because it has little impact on a company's day-to-day operations.
Fixed assets demand corporate accounts that track information for
tax purposes, the financial statements and depreciation. Typically,
when capital expenditure projects are finished, they are capitalized
as fixed assets that immediately begin to generate depreciation
expense. Says Waugaman, "If a software package integrates those
data subsystems with accounts payable and the general ledger,
then fixed asset subsystem updates automatically appear in the
general ledger. This ensures that finished capital projects become
fixed assets in a timely manner and won't get lost." Such
integration also eliminates one more task from the monthly closings
list.
 MANAGERIAL ACCOUNTING AND CONTROLS

1. Responsibility center is an object for which cost/revenue/capital expenditures are

specifically collected and analyzed. Each responsibility center is usually managed
and controlled by a separate manager. The entity is often internally split into
various types of responsibility centers for the purposes of smooth management,
controlling, and planning (budgeting).
Identify the different types of centers in responsibility accounting and give SPECIFIC
examples of transactions that are UNIQUE to the particular center and fully discuss
(25 pts).

 RESPONSIBILITY CENTERS are segments in which supervisors or managers

have responsibility for the performance of the center and the authority to make
decisions that affect the center. The following are the different types of centers:

COST CENTER
Organizational segment in which a manager is held responsible only for
costs. In these types of responsibility centers, there is a direct link between
the costs incurred and the product or services produced. This link must be
recognized by managers and properly structured within the responsibility
accounting framework.

An example of a cost center is the custodial department of a

department store called Apparel World. On one hand, since the custodial
department is structured as a cost center, the goal of the custodial
department manager is to keep costs as low as possible, since this is the
basis by which the manager will be evaluated by upper-level management. 

DISCRETIONARY COST CENTER

 A discretionary cost center is an organizational segment in which a
manager is held responsible for controllable costs when there is not a well-
defined relationship between the center’s costs and its services or products.
Examples include human resources and accounting departments. Human
resources departments often establish policies that affect the entire
organization. For instance, while a policy requiring all workers to have annual
safety training for fires, injuries, and tornadoes is beneficial to the entire
company, it is difficult to evaluate the human resources department
manager’s performance in relation to impacting the products or services the
company provides. As you might expect, reviewing the financial performance
of a discretionary cost center is similar to that of the review of a cost center.

INVESTMENT CENTER
Organizational segment in which a manager is accountable for profits
(revenues minus expenses) and the invested capital used by the Segment. It
is important for managers to continually invest in the business. Managers
must choose investments that improve the value of the business by improving
the customer experience, increasing customer loyalty, and, ultimately,
increasing the value of the organization. A limitation of the centers explored
so far—cost center, discretionary cost center, revenue center, and profit
center—is that these structures do not account for the investments made by
the various responsibility center managers. The final responsibility center—
investment centers—takes into account and evaluates the investments made
by the responsibility center managers. The goal of the investment center
structure is to ensure that segment managers choose investments that add
value and help the organization achieve its strategic goals.

PROFIT CENTER
A profit center is an organizational segment in which a manager is
responsible for both revenues and costs (such as a Starbucks store location).
Of the responsibility centers explored so far, a profit center structure is the
most complex because a manager must be well-versed in techniques to
increase revenues, decrease expenses, and thereby increase profits while also
meeting the strategic goals of the organization.

REVENUE CENTER
Part of an organization in which management is evaluated based on
the ability to generate revenues; the manager’s primary control is only
revenues

Return On Investment (ROI)

Measure of the percentage of income generated by profits that were
invested in capital assets

Key Concepts and Summary

 A responsibility accounting structure helps management evaluate the

financial performance of the segments in the organization.
 Responsibility centers are segments within a responsibility accounting
structure.
 Five types of responsibility centers include cost centers, discretionary
cost centers, revenue centers, profit centers, and investment centers.
 Cost centers are responsibility centers that focus only on expenses.
  Discretionary cost centers are responsibility centers that focus only
on controllable expenses.
 Revenue centers are responsibility centers that focus on revenues.
 Profit centers are responsibility centers that focus on revenues and
expenses.
 Investment centers are responsibility centers that consider the
investments made by the responsibility center.
 Return on investment is a particular type of investment center structure
that calculates a responsibility center’s profit percentage relative to the
center’s investment.
 Residual income is a particular type of investment center structure that
evaluates investments using a common cost of capital rate among all
responsibility centers.

2. Managerial Accounting is often referred to as management accounting. The

institute of Management Accountants describes management accounting as “a
profession that involves partnering in Management decision-making, devising
planning and performance management systems, providing expertise in financial
reporting and control to assist management in the formulation and implementation
of an organization strategy. “In short, managerial accounting supports the decision
making process through planning and controlling operations.” Planning primarily
occurs in the budgeting process. Controlling occurs when managers compare actual
performance with budgeted amounts to identify differences and then act upon any
differences that appear to be significant.

Write a descriptive and exploratory analysis on the significance of managerial

accounting and the role that it plays on the growth of the tourism industry of
Southern Leyte in general and Limasawa in particular. (25 pts.)

The island of Limasawa is famous as it is believed to be the site of the first

mass in Philippine soil, officiated on Easter Sunday of March 31, 1521 Father Pedro
de VAlderrama under the fleet of Ferdinand Magellan. Now, it reached to 500 years
after the first exploration and the island seems to be so slow. If tourism will be left
unattended by authorities, the economic potential thereof could not be tapped for
the enefir of everybody. To address this dilemma, a local agency should be created
to concentrate on developing the tourism potential of the historic Limasawa Island in
Southern Leyte. Focus on tourism, a core group must implement a development
program for the island of Limasawa. If the local government could not make it
possible to handle the said project, they must assist the provate entities who are
willing to undertake the tourism project; this private entity may tackle to handle the
development of tourism attractions and recommend agreement for tourist plans and
facilities.
Through proper management and strict financial guidance that will be
imposed by private entities in coordination with the Local Government Unit, the
program will be successfully implemented with the guidance of brilliant minds of
managers who be task to handle the financial and marketing aspects for tourism

Managerial Accounting

MAKE OR BUY CASE

Introduction:
ABC Ltd. is a manufacturing company engaged in the manufacturing of
valves. The Management is skeptical whether to purchase valves from other
suppliers or manufacture on their own, to be ale to sustain the current demand of
the said product.

Background information:
ABC Ltd started their business initially with sales of 10,000 valves per month
and now they have grown the volume to about 50,000 valves per month. They have
been buying all the raw material for the valve and were doing all the manufacturing
in house. Now they have established themselves in the market and are planning to
expand and produce different varieties of valves. They have their plant in the main
city and the total area of the plant is 50,000 sq. ft. Now if they want to expand and
continue doing all the activities of manufacturing of all the varieties in house, they
would need another 50,000 sq.ft. of the area. In the recent times, the land prices in
the area have more than doubled in the last 3 years and still land is available with
great difficulty. Mr. Mohan is the production head of ABC Ltd. and has been
successful with the production and the level is continuously increasing. But in recent
times, he is facing the problem of quality complaints which have gone up from
average 0.2 % in previous 2 years to 0.5 % this year. Also, he is finding that there is
a high level of dissatisfaction among the workers regarding workload as well as
salary levels. The workers are regularly complaining about the over work.

Alternatives:
Two alternatives are being considered, whether to expand the business using
in house manufacturing or to buy from outsource. The marketing manager has
expressed very bullish prospect about the company’s growth and said that the
company should take advantage of growing economy and established brand image
of the company and definitely go for expansion. The finance manger also expressed
that this will result in economy of scale for the products and will further increase the
profitability of the products.

The Marketing manager asked the Production manager about the option of
outsourcing. Mr. Mohan is skeptical about the outsourcing option as he felt that the
outside agency will always charge more as he will try to make his profit as well and
also is worried about the possible problems of deliveries. Mr. Naresh, the Purchase
manager said that since the suppliers would also be interested in doing the business,
they would not like to delay as with delay they also incur loss. The Finance manager
said that we can look at cost comparison for buying against in house manufacturing.

Solution:
The table below gives the comparison of in house and outsourcing cost
Recommendations:

After a thorough analysis considering the comparison between manufacturing

and procurement costs, it is very clear that we should go for buying the product
from outside. Even if the cost would have been same for both manufacturing in
house as well as cost for procurement, we would have still gone for purchasing the
product from the supplier. In case cost is higher for procurement little bit as
compared to manufacturing in house, it is better still to go for buying from outside
as it gives better flexibility and risk is less even if the forecast is wrong and the
ultimate demand turns out to be lower than forecast demand.
_____

Questions -

1. Based on this data, is it economical for ABC Ltd.to go for buying the
product from market or manufacturing in house.

Considering the costs as per table above it is very clear that we should go for
buying the product from outside.
2. What other factors should ABC Ltd. look at for making this decision?

Generally, whether we should go for in house manufacturing or outsourcing,

we have to consider following factors. The following factors generally influence
make-or-buy decisions:
a. Relative economics
b. In-house capacity currently available
c. The need for control or secrecy
d. Advantages of access to supplier knowledge and skill
e. An opportunity to maintenance a robust supplier
f. The relative risks involved
g. Capital investment versus expense for tax purposes
h. Degree of scope definition available
i. Affects uncertainty and risk
j. Overall degree of technical, cost and schedule risk
k. Type or complexity of the requirements
l. Confidentiality of the process
m. What will be the contractor's entire responsibility?
n. Urgency of the deliverable
o. Contractors' capacity to perform
p. And/or extent of subcontracting
q. How long have we got for execution?
r. Affects the pace of the work
s. Extent of price competition
t. Contractors' accounting systems

Careful evaluation of these factors is required to arrive at final decision.

 Managerial Accounting

LOGISTICS OPERATIONS

Introduction:

ABC Ltd. is the country’s largest manufacturer of spun yarn with well-established market.
ABC Ltd. has good reputation for quality and service. Their marketing department identified
that the potential for global market is expanding rapidly and hence the company undertook
exercise for expansion of the capacity for export market. After extensive study, the team
came up with a report on global logistics and submitted that global logistics is essentially
same as domestic

Background information:

The company had very economical and reliable transportation system in existence.
For exports as well they decided to evaluate capabilities of their existing transporter and
entrusted them with the job of transport till port. For customs formalities they engaged a good
CHA after proper cost evaluation and entered into contract for freight with shipping company
agent. The feedback on the quality and price were good but the customers were very upset on
the logistic services due to delayed shipments, frequent changes in shipping schedules,
improper documentation, improper identifications, package sizes, losses due to transit
damages etc. The export manager checked the dispatch schedules and found that production
and ex-works schedules were all proper. Then he studied the logistics systems and found that
the logistics cost was very high and all the logistics people were demotivated due to
overwork and were complaining of total lack of co-ordination and the system had become
totally disorganized.

Alternatives:
 Outsourcing logistics, first and foremost, helps a business preserve valuable time.
By freeing up resources in the organization, more time can be allocated to focusing on core
competencies. It is also important to note that having the required resources available does
not guarantee success.
Solution:

The solution for this problem is appointment of 3rd or 4th Party Logistics service provider
(3PL or 4PL)is a firm that provides outsourced or "third party" logistics services to
companies for part or sometimes all of their supply chain management function. Third party
logistics providers typically specialize in integrated warehousing and transportation services
that can be scaled and customized to customer’s needs based on market conditions and the
demands and delivery service requirements for their products and materials.

Recommendations:

_____

Questions -

1. Explain the problems experienced by ABC Ltd. What is the main cause of these
problems?

Here in this case, the company has faced problem of dissatisfied customers.
The company has faced this problem due to improper handling of their logistics
operations. The employees of the company are feeling the pressure of overwork as
well as are demotivated due to the inefficiency in their logistics. The problem has
been faced by the company due to their inadequate understanding of international
logistics. Although their analysis of similarities between domestic and global logistics
is correct but they have overlooked the fact that there are basic operational
differences between global and domestic logistics operations.

2. What logistics model should the company go for to ensure proper operations of the
Company?

The solution for this problem is appointment of 3PL / 4PL service provider. A
third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or
"third party" logistics services to companies for part or sometimes all of their supply
chain management function. Third party logistics providers typically specialize in
integrated warehousing and transportation services that can be scaled and
customized to customer’s needs based on market conditions and the demands and
delivery service requirements for their products and materials. There are numerous
reasons why using 3PL can help to run a business more efficiently. Outsourcing
logistics, first and foremost, helps a business preserve valuable time.
 === HUMAN BEHAVIOR IN ORGANIZATION ===

1. Explain the following theories of motivation

a. Vroom Expectancy model

Vroom’s expectancy theory assumes that behavior results from
conscious choices among alternatives whose purpose it is to maximize
pleasure and to minimize pain. Vroom realized that an employee’s performance
is based on individual factors such as personality, skills, knowledge, experience
and abilities. He stated that effort, performance and motivation are linked in a
person’s motivation. He uses the variables Expectancy, Instrumentality and
Valence to account for this.

Expectancy is the belief that increased effort will lead to increased

performance i.e. if I work harder then this will be better. This is affected by such
things as:

- Having the right resources available (e.g. raw materials, time)

-Having the right skills to do the job

-Having the necessary support to get the job done (e.g. supervisor
support, or correct information on the job)

Instrumentality is the belief that if you perform well that a valued outcome
will be received. The degree to which a first level outcome will lead to the second
level outcome. i.e. if I do a good job, there is something in it for me. This is
affected by such things as:

. Clear understanding of the relationship between performance and outcomes –

e.g. the rules of the reward ‘game’

-Trust in the people who will take the decisions on who gets what
outcome

-Transparency of the process that decides who gets what outcome

Valence is the importance that the individual places upon the expected
outcome. For the valence to be positive, the person must prefer attaining the
outcome to not attaining it. For example, if someone is mainly motivated by
money, he or she might not value offers of additional time off.
 b. McGregor’s Theory of Motivation
Theory X is based on assumptions regarding the typical
worker. This management style assumes that the typical worker has little
ambition, avoids responsibility, and is individual-goal oriented. In general,
Theory X style managers believe their employees are less intelligent, lazier,
and work solely for a sustainable income. Management believes employees'
work is based on their own self-interest. Managers who believe employees
operate in this manner are more likely to use rewards or punishments as
motivation. Due to these assumptions, Theory X concludes the
typical workforce operates more efficiently under a hands-on approach to
management. Theory X managers believe all actions should be traceable to
the individual responsible. This allows the individual to receive either a
direct reward or a reprimand, depending on the outcome's positive or
negative nature. This managerial style is more effective when used in a
workforce that is not essentially motivated to perform.

Theory Y managers assume employees are internally motivated,

enjoy their job, and work to better themselves without a direct reward in
return. These managers view their employees as one of the most valuable
assets to the company, driving the internal workings of the
corporation. Employees additionally tend to take full responsibility for their
work and do not need close supervision to create a quality product. It is
important to note, however, that before an employee carries out their task,
they must first obtain the manager's approval. This ensures work stays
efficient, productive, and in-line with company standards.

Maslow’s Heirarchy of Needs

Maslow's hierarchy of needs is a motivational theory in psychology

comprising a five-tier model of human needs, often depicted as hierarchical
levels within a pyramid.

From the bottom of the hierarchy upwards, the needs are: physiological
(food and clothing), safety (job security), love and belonging needs
(friendship), esteem, and self-actualization.
Needs lower down in the hierarchy must be satisfied before individuals
can attend to needs higher up.
\

Herzberg Theory -
Frederick Herzberg theorized that employee satisfaction has
“hygiene” and motivation.
two dimensions:
Hygiene issues, such as salary and supervision, decrease employees'
dissatisfaction with the work environment.
Motivations, such as recognition and achievement,
make workers more productive, creative and committed.
 2. Compare and contrast job centered leadership style from
employee centered style. Which do you think is effective in this
leadership style? Dicuss fully.

Job-centred leaders closely supervise subordinates to

make sure they perform their tasks following the specified
procedures. This type of leader relies on reward, punishment, and
legitimate power to influence the behaviour of followers.

An employee-centered workplace is one in which all

individuals, programs, processes, and systems are focused on
helping employees become fully successful. Individuals who feel
valued will provide excellent products and service, which will result
in the achievement of organizational goals.

3. Read and analyze the case. THE NEW SALES PROCEDURES.

Answer only the questions at the end of the case.

THE NEW SALES PROCEDURE

The Marin Company had more than 100 field sales representatives who sold a
line of complex industrial products. Sales of these products required close work with
buyers to determine their product needs; so nearly all sales representatives were
college graduates in engineering and science. Other product lines of Marin
Company, such as consumer products were sold separate by a separate sales group.
Recently, the firm established a new company wide control and report system
using a larger computer. The system has doubled the amount of time the industrial
sales representative spend filling out the forms and supplying information that can
be fed into the computer. They estimate that they now spend as much as two hours
daily processing records, and they start complaining that they have less time for
sales effort. A field sales manager commented, “Morale has declined as a result of
these new controls and report. Sales are a rewarding, gratifying profession that is
based on individual effort. Sales representatives are happy when they are making
sales, since this directly affects their income and recognition. The more time
they spend with reports, the less time they have to make sales. As a result, they
can see their income and recognition declining and thus they find themselves
resulting changes.
QUESTIONS:
1. Comment on Sales manager’s analysis.
2. What alternative approaches to this situation do you recommend? Give
reasons.
 === MANAGERIAL ECONOMICS ===

1. Differentiate NEEDS from WANTS.

A NEED is something you have to have to survive or complete a task. A
WANT is simply the desire for something, in many cases something to satisfy a
need. You need food to survive.
A need is something needed to survive. In economics, the idea of survival is
real, meaning someone would die without their needs being met. This includes
things like food, water, and shelter. A want, in economics, is one step up in the
order from needs and is simply something that people desire to have, that they may,
or may not, be able to obtain. Again, with those two simple definitions, it doesn't
seem like there should be much to talk about, but there is. Economics deals with
how we allocate scarce resources, and those scarce resources may be needed to
meet someone people's needs and other people's wants. So, we do need to talk
about wants and needs.
A need is generally referred to, in economics, as something that is extremely
necessary for a person to survive. If a need is not met, it would lead to the onset of
disease, the inability to function effectively and efficiently in society, and even death.
Needs are categorized into two groups. There are the objective or physical needs,
and the subjective needs. Objective needs are those that are met through tangible
things, or things that could be measured. Examples of these include food, water,
shelter and even air. On the other hand, subjective needs are those that are often
seen to ensure our mental health.
 2. Discuss the importance of Public-Private Partnership (PPP)
Approach of the Government towards development.
Public-private partnerships allow large-scale government projects, such as
roads, bridges, or hospitals, to be completed with private funding. Economists note
that these partnerships work well when private sector technology and innovation
combine with public sector incentives to complete work on time and within budget.
Partnerships between private companies and the government provide
advantages to both parties. Private-sector technology and innovation, for example,
can help provide better public services through improved operational efficiency. The
public sector, for its part, provides incentives for the private sector to deliver
projects on time and within budget. In addition, creating economic diversification
makes the country more competitive in facilitating its infrastructure base and
boosting associated construction, equipment, support services, and other
businesses.

3. Discuss the business importance of Advertising.

Businesses use advertising to accomplish varied goals, and companies place
those ads in diverse media. Besides advertising products in traditional venues such
as newspapers and general interest magazines, businesses advertise in media that
reach specific markets. For example, a portable communications device is advertised
on a social media site that reaches younger customers.
The primary objective of advertising is to get the word out that you have
something exciting to offer, says George Felton, author of "Advertising: Concept and
Copy." It can be anything from an upcoming entertainment event you're promoting,
a new product line you're selling, a political campaign you're managing, the
expansion of an existing platform of services or officially hanging out a shingle for
your first business. Whether your promotion takes the form of print ads,
commercials, billboards or handbills, the content adheres to the rules of journalism
by identifying who, what, when, where and why.

4. Explain at least three (3) factors to consider in choosing a business

location.

A. Proximity to the Market

The closer you are to your customers, the greater the chance that they
will buy from you again. Who is your customer and where are they
located? Are there other manufacturing companies? Or, are they an end
consumer? You must have answers to these questions, before choosing a
business location!
 B. Analyze the Demographics
Demographics are without a doubt, one of the most significant factors
to consider when choosing a business location. It relates to the structure
of population. It’s important to be near your target customer group. For
example, you don’t want to sell gaming consoles in an area populated with
older generations. The sells will be higher in an area dense with your
target market.

C. Infrastructure and Accessibility

Good infrastructure is beneficial to any kind of business. Power and
water supply, good road connections are just a few factors to consider
when choosing your business location. Lack of enough parking spaces for
your employees, or accessibility for people with disabilities, can be an
issue in some locations. A good location for business, is usually not in a
busy city area exclusions apply. Nobody wants their employees to spend
hours getting to work. Therefore, choose a location that won’t cause any
problems with daily routines and tasks.

5. Explain the effect of Competition in Economics.

When firms compete with each other, consumers get the best possible
prices, quantity, and quality of goods and services. Antitrust laws encourage
companies to compete so that both consumers and businesses benefit. One
important benefit of competition is a boost to innovation.

 markets characterized by more competition, with more players,

more dynamic entry and exit, and more intense rivalry for
customers tend to deliver better market outcomes.

 these outcomes include lower prices and better access to

services for consumers, including other businesses that rely on
these products as inputs for their own enterprises.

 yet it is important to ensure that domestic production is

internationally competitive, and can, therefore, generate
increased exports, foreign exchange, jobs and industrial growth.

 competition authorities have an important role to play in

monitoring and tackling behaviors such as market dominance
and anti-competitive practices.
  the state can influence competition through various forms:
regulation, state ownership and privatization, price controls or
subsidization, and other policy mechanisms such as import
protection or industrial policy.

6. Discuss the economics of

a. Productivity – Productivity, in economics, measures output per unit of

input, such as labor, capital or any other resource – and is typically
calculated for the economy as a whole, as a ratio of gross domestic
product (GDP) to hours worked. It is the value of output obtained with
one unit of input.

b. Competition – It is a condition where different economic firms seek to

obtain a share of a limited good by varying the elements of the marketing
mix: price, product, promotion and place. Competition in economics
happens when a market has a sufficient number of buyers and sellers so
that prices remain low. When there are a large number of sellers,
consumers have many options, which means companies have to compete
to offer the best prices, value and service.

c. Advertising – Advertising reveals the features of the goods, on which the

latter will be compared with other competing products. It usually points to
a "unique selling proposition", a key wedge against all other competitors.

In this way, advertising educates the consumer to pay attention to

certain features or performances. In particular, advertising tries to shift
consumers' attention from weak to strong sides of the product and
modify the weights that consumer attributes to their importance.

Advertising plays a strong role in the economy: It provides useful

information to consumers that tells them about product and service
choices, as well as comparing features, benefits, and prices. With more
complete information, consumers and businesses often choose to
purchase additional products and services.

d. Pricing - Economic price theory asserts that in a free market economy the
market price reflects interaction between supply and demand: the price is
set so as to equate the quantity being supplied and that being demanded.
 In turn these quantities are determined by the marginal utility of the asset
to different buyers and to different sellers. Supply and demand, and hence
price, may be influenced by other factors, such as government subsidy or
manipulation through industry collusion.

7. Give 3 specific, practical suggestions on how we can improve our

Philippine economy. Discuss each fully.

a) Changing the mentality and the attitude of the Filipino people is

just one simple yet a very good way to start with the battle of
improving the economy. Somehow, Filipinos must start to think how to
improve his means of living first and that includes not being satisfied with
three square meals each day. Filipinos must realize that there is more to
life than having food on the table each meal. A Filipino father must put
into consideration that his duty to his children is not only to give them a
little food, some clothing and a place to stay. He must also think that he
has a duty to secure for his family some amount of quality living which
means the provision of good food, clean clothing and a decent and safe
home. This also extends to giving his children adequate education and
training so that they will become productive members of the society as
well.

b) Projects that showcase Philippine innovation and ingenuity—be it

in skills, materials, services, or products—should be given a special
imprimatur, a program that can unify our country’s brand, as it may be.
This is why I am actively pushing for a nationwide “Tatak Pinoy [Made in
the Philippines]” initiative, which will be applied to all productive sectors,
to encourage inclusive growth across the whole country. By creating the
Tatak Pinoy brand, we make not only a name for ourselves in the global
stage, but also a promise to ourselves to continue striving to make our
products and services even better. Our standards, after all, should be on a
par with international ones—and indeed, we should aspire to produce
products and services whose quality are even better than most.

c) More Negosyo Centers, too, will be established, as these can help

MSMEs get set up faster. This can be done through mentoring and
advisory services, as well as assistance with credit, financing, market
information, supplies and buyers. One Town, One Product (OTOP Next
Gen program, which is meant to level up products and services through
innovation in quality, standards, marketability, and other aspects of
product and brand development.
8. Explain the implication of a change in the value of Philippine peso
against the U.S dollar from the viewpoint of:

a. An import business - A weak peso means a strong dollar and this makes
all our imports in dollars more expensive in peso terms. This tends to
reduce imports or restrains its growth.

b. An export business - A weak peso, however, makes our export products

cheaper to foreign buyers. This encourage them to import more from us.
With declining imports and increasing exports, our net exports expands.

c. Consumers - The rise in prices or inflation, especially for products with

high import contents, usually comes with a falling peso. This is not good.
It hurts the consumers. Among others, another consequence of the falling
value of the peso is the increase in the cost of servicing our foreign debts.
When our foreign debts are denominated in dollars, a weak peso means
that we now have to allocate more from our budget to pay for annual
interests and amortization. This is not good. Less of our budget will now
be left for government programs and projects.
Cite concrete examples.