UNIT 1: MANAGEMENT

1. What is management? Management is the process of planning, organizing, leading

and controlling people and other resources to achieve goals.
2. What is a manager? A manager is a person who is responsible for a part of a
business.
3. What is a CEO? A CEO (Chief Executive Officer) is the most senior manager
responsible for the overall performance and success of a company.
4. What is a leader? A leader is the one in the charge, the person who convinces other
people to follow.
5. Explain the five functions of management
- Planning is setting aims and targets for the organization.
- Organizing is managing people and resources effectively towards achieving the
aims of the organization.
- Controlling is checking that the original aims are being met and appraising
workers/staff.
- Coordinating is bringing people and departments together so that they work
towards common aims.
- Commanding is guiding, leading and supervising people.
6. What can a manager do with the subordinates when considering their
performance, and behaviors? A manager has authority and power to hire, promote,
discipline and fire employees based on those behaviors and performance.
7. Why is it possible for anyone to become a leader? Any individual can become a
leader because the basis of leadership is on the personal qualities of the leader.
8. How is a manager different from a leader?
- A manager has subordinates while a leader has followers.
- A manager has authority and power to hire, promote, discipline and fire employees
while a leader has the ability to motivate and inspire followership.

UNIT 2: WORK AND MOTIVATION

1. What is motivation? Motivation is the factor that influences the behavior of workers
towards achieving business goals.
2. What are the most common ways to increase a worker’s motivation? Give
examples of monetary and nonmonetary rewards.
- The most common ways to increase motivation are:
+ Monetary rewards: A salary increase is a common form of monetary reward
+ Non-monetary rewards: flexible working
+ Introducing ways to give job satisfaction
3. What is job satisfaction and how can it be achieved?
- Job satisfaction is the enjoyment a worker gets from feeling that they have done a
good job.
- There are 3 ways to motivate workers to be more committed to their job and work
more effectively:
+ Job rotation (swapping workers round and only doing a specific task for a
limited time before swapping round again).
+ Job enlargement (extra tasks are added to the job to make it more
interesting).
+ Job enrichment (adding tasks that require more skill and responsibility).
4. Distinguish Theory X and Theory Y?
- Theory X is the person who does not like to work and must be constantly
supervised so they will work
- Theory Y is the person who is motivated by internal factors
5. What are hygiene factors ?
- Hygiene factors are the factors that must be present in the workplace to prevent
job dissatisfaction.
6. What is Frederick Herzberg’s motivation theory?
- Humans have two sets of needs: one is for the basic needs, which he called
hygiene factors or needs, and the second is for a human being to be able to grow
psychologically, which he called motivational needs or motivators.
7. What is Maslow’s hierarchy of needs and its implications for managers?
- Maslow’s hierarchy is a theory of motivation which states that five categories of
human needs dictate an individual's behavior. Those needs are physiological
needs, safety needs, love and belonging needs, esteem needs and self-actualization
needs.
- Implications of Maslow’s Hierarchy of Needs Theory for Managers:
+ Physiological needs: the managers should give employees appropriate
salaries to purchase the basic necessities of life. Breaks and eating
opportunities should be given to employees.
+ Safety needs: the managers should provide the employees job security, safe
and hygienic work environment, and retirement benefits so as to retain
them.
+ Social needs: the management should encourage teamwork and organize
social events.
+ Esteem needs: the managers can appreciate and reward employees on
accomplishing and exceeding their targets. The management can give the
deserved employee higher job rank/position in the organization.
+ Self-actualization needs: the managers can give the employees
challenging jobs in which the employees’ skills and competencies are fully
utilized. Moreover, growth opportunities can be given to them so that they
can reach the peak.
UNIT 3: COMPANY STRUCTURE
1. What is the main advantage of a chain of command? Everyone knows what
decisions they are able to make, and who they can give instructions to.
2. Why is it not usually possible to organize a large organization in a single
hierarchy? Their activities are too complicated.
3. In what ways can dividing a business functionally cause problems? People may be
more concerned about the success of their department than that of the company.
4. What factors might lead companies to flatten their hierarchies? The desire to save
money and make decision making easier; the use of IT systems; and the need to reduce
costs during a recession.
5. According to the text, what kind of managers might not want to delegate decision
making? The owners of small businesses, because they want to control as much as
possible
6. What is the potential disadvantage of matrix management systems? They can
become quite complex, making decisions difficult.
7. Under what circumstances might teams not be effective? If they do not have a
strong leader, and need to make a lot of decisions.
8. What is functional structure and advantages and disadvantages of functional
structure?
- A functional structure is a business organization that is based on the knowledge
and skills of each team member as well as the functions they play within the
company. Marketing, finance, production and human resources are the most
common departments in a business.
- Advantage of functional structure:
+ staff is managed by a person with experience in the same specially
+ opportunity to move up within their functional areas
+ encourages employees to become specialists so that they can be more
productivity and effective
- Disadvantage of functional structure:
+ there might be competition between departments, for example, conflicts
between finance and marketing or marketing and production over what the
objectives are. This may affect the success of the company.
9. Compare pyramid structure and functional structure.
- The key difference between these two management structures is that a functional
structure breaks up into multiple smaller pyramids based on the needs of the
company.
10. Matrix structure
- This approach to organizing businesses aims to eliminate many of the problems
associated with the hierarchical structure. The matrix structure cuts across the
departmental lines of a hierarchical chart and creates project teams made up of
people from all departments or divisions.
- Advantages
• It allows good communication between all members of the team.
• It cuts across traditional boundaries between departments in a hierarchy.
• There is less chance of people focusing on just what is good for their department
as the aim is to focus on the project and the business as a whole.
- Disadvantages
• There is less direct control from senior managers as the teams may be
empowered to undertake and complete a project.
• Passing down of authority to more junior employees can be difficult for some
senior managers to accept.
• Reduced bureaucratic control may be resisted by some senior managers.
11. Teams
- A team organizational structure is meant to disrupt the traditional hierarchy,
focusing more on problem-solving, cooperation, and giving employees more
control.
- Advantages
• Increases productivity, performance, and transparency by breaking down silo
mentality
• Promotes a growth mindset
• Changes the traditional career models by getting people to move laterally
• Values experience rather than seniority
- Disadvantages
• Goes against many companies’ natural inclination of a purely hierarchical
structure
• Might make promotional paths less clear for employees
12. A horizontal or flat organizational structure
- fits companies with few levels between upper management and staff level
employees. Many start-up businesses use a horizontal org structure before
they grow large enough to build out different departments, but some
organizations maintain this structure since it encourages less supervision
and more involvement from all employees.
- Advantages
 • Gives employees more responsibility
• Fosters more open communication
• Improves coordination and speed of implementing new ideas
- Disadvantages
• Can create confusion since employees do not have a clear supervisor to
report to
• Can produce employees with more generalized skills and knowledge
• Can be difficult to maintain once the company grows beyond start-up
status

Unit 4: MANAGING A CROSS CULTURE

1. Why is it important for companies to be aware of local cultures?
- Because local cultural habits, beliefs and principles can easily affect the
performance of their business in each country.
2. What are linear-active cultures? (The Lewis Model)
- They are generally organized and rational, try to act logically rather than
emotionally, plan in advance, and like to do one thing at a time; believe in
respecting rules, regulations and contracts
- Germans and Swiss are in this group.
3. What are multi-active cultures? (The Lewis Model)
- They attach more importance to feelings, emotions and intuition, and relationships
and connections; they like to do many things at the same time; they are flexible,
good at changing plans and happy to improvise; they believe in social or company
hierarchy, and respect status.
- Italians, Latin Americans and Arabs are members of this group.
4. What are reactive cultures? (The Lewis Model)
- They prefer to listen to and establish the other's position, and then react to it; try to
avoid confrontation, and don't want to 'lose face' or cause someone else to; rarely
interrupt speakers and often avoid eye contact; try to formulate approaches which
suit both parties.
- Chinese, Japanese and Finns are in this group.
*Describe the Lewis Model
The Lewis Model was developed in the 1990s and articulated in Richard Lewis’s
blockbuster, When Cultures Collide (1996), which won the US Book of the Month
Award in 1997. Lewis, after visiting 135 countries and working in more than 20 of them,
came to the conclusion that humans can be divided into 3 clear categories, based not on
nationality or religion but on BEHAVIOUR. He named his typologies Linearactive,
Multi-active and Reactive.

5. According to The Lewis Model, what kind of culture do Vietnamese belong to?
Explain.
- Listens most of the time; Reacts to partner’s action; Looks at general principles;
Polite, indirect; Never confronts.
- Very people-oriented; Statements are promises; Harmony oriented; Often asks for
“repeats”; Face-to-face contact important; Subtle body language
6. What is culture? What factors are likely to be governed by cultures?
- The complex system of values, traits, morals, and customs shared by a society.
Culture is a powerful operating force that molds the way we think, behave, and
communicate.
7. What is high and low context culture?
- A high-context culture is a culture or society that communicates dominantly
through the use of contextual elements, such as specific forms of body language,
the status of an individual, and the tone of voice employed during speech. Rules
are not directly or explicitly written or stated.
- A low-context culture enjoys communications that take place most often through
written or spoken (verbal) speech and rules are directly and explicitly stated. High-
context cultures include close - knit groups of people, while low - context cultures
are generally more diverse.
8. What is an example of high context communication?
- High-context communications typically take place in a collectivist setting, or
within a large group of people who share similar goals, values, or norms
(ingroups). Family gatherings, religious congregations, and other social outings
with a close-knit group of people are forms of high-context communications that
take place regularly in most cultures.
9. What countries are the best examples of high context culture?
- Japan and China are some of the best examples of high-context cultures, in
addition to Brazil, Argentina, Spain, and many nations throughout Africa and the
Middle East. In comparison, the United States is perhaps the best example of a
diverse and low-context culture. It is important to note that while a nation or
society may be widely considered a high context or low-context culture, certain
events occur in the opposite context regularly (such as family gatherings in the
United States).
10. According to Hall’s model, Vietnamese communicators are in high-context
culture. Explain why and provide some examples.
- High-context communication relies on a high degree of commonality between the
individuals.
+ Collectivistic: High-context cultures are generally collectivist cultures -
they place a higher value on the good of an entire group of people than on
any one individual. This sort of collective (and contextual) understanding
undergirds the ability to communicate so much about a thought, opinion, or
feeling you might have without ever directly stating it.
+ Homogenous: For a culture to be high context, it’s helpful for there to be a
great degree of homogeneity among its population. For instance, in Japan,
more than ninety-eight percent of the population is Japanese. This leads to a
shared language, regional upbringing, and other significant commonalities
for the vast majority of the citizenry. It becomes easier to rely on subtlety in
communication given the high level of shared understanding.
+ Implicit: High-context cultures rely on shared cultural dimensions and more
intimate personal relationships to communicate far more subtly than their
low-context counterparts. For example, there’s less of a need to be direct
when you can assume people will invariably get the gist of what you’re
saying even if you sugarcoat or dance around it for the sake of politeness.
+ Reliant on nonverbal cues: People rely more on nonverbal communication
and body language in a high context culture. Things like eye movement and
facial expressions carry far more weight, as they subtly convey the more
direct meaning of what one individual wants to get across to another.
11. What does the Power Distance Index measure?
- It measures how people in different societies cope with inequality- in other words,
how they relate to more powerful individuals
12. How do subordinates in low-context cultures and high-context cultures treat
their supervisors?
- In high - power - distance countries, subordinates expect formal hierarchies and
embrace relatively authoritarian, paternalistic power relationships. In low - power
- distance cultures, however, subordinates consider themselves as equals of their
supervisors.
13. What is the disadvantage and advantage of top - down management structure?
- A strict top-down management structure allows for faster decision making, but it
also prevents subordinates from speaking up due to fear or resignation.
Unit 5: RECRUITMENT
1. What is internal recruitment? What are the advantages and disadvantages of
internal recruitment?
- Internal recruitment is the process of hiring people from within the organization.
- Advantages
+ It is quicker and cheaper than external recruitment, which may involve
expensive advertising.
+ The person is already known to the business and their reliability, ability and
potential are known.
+ The person also knows how the organization works, its structure and what
is expected from its employees.
- Disadvantages
+ No new ideas or experience come into the business.
+ There may be rivalry among existing employees and jealousy towards the
worker who gains promotion.
+ The quality of internal candidates might be low.
2. What is external recruitment? What are the advantages and limitations of
external recruitment?
- External recruitment is the process of hiring personnel from outside the
organization.
- The benefits of external recruitment include:
+ External applicants might bring new ideas and this can improve the
effectiveness and efficiency of the business.
+ There will be a wider choice of applicants with different skills and
experience.
+ It avoids the risk of upsetting workers when someone who is internal is
promoted.
- The limitations of external recruitment include:
+ It takes longer to fill the vacancy.
+ It is more expensive than internal recruitment because of advertising costs
and the time spent interviewing candidates
3. How important is training? What are introduction training, on-the-job training
and off-the-job training?
- Training is to achieve one or more of the following:
• To increase skills.
• To increase knowledge.
 • To improve employees’ attitudes to encourage them to accept change and raise
awareness, for example, a need to improve customer service
- Introduction training is given at the place of work by watching another, more
experienced employee doing the job.
+ Advantages:
- helps new employees to settle into their job quickly
- may be a legal requirement to give health and safety training at the start of
a job
- means workers are less likely to make mistakes.
+ Disadvantages:
- time-consuming
- means wages are paid but no work is being done by the worker
- delays the start of the employee commencing their job.
- On-the-job training is given at the place of work by watching another, more
experienced employee doing the job.
+ Advantages:
- it ensures there is some production from the worker while they are
training
- it usually costs less than off-the-job training
- it is training tailored to the specific needs of the business.
+ Disadvantages:
- the trainer will not be as productive as usual because they are showing the
trainee what to do instead of getting on with their job
- the trainer may have bad habits and they may pass these on to the trainee
- it may not lead to training qualifications recognised outside the business.
- Off-the-job training is given away from the place of work itself; can be at a
different place such as a college or could be at the business's site, but in a different
building.
+ Advantages:
- a broad range of skills can be taught using these techniques
- the business will only need to pay for the course and it will not also lose
the output of the employee
- it often uses expert trainers who have up-to-date knowledge of business
practices.
+ Disadvantages:
- costs are high
- it means wages are paid but no work is being done by the worker
 - the additional qualifications mean it is easier for the employee to leave
and find another job.
4. Job description and Job Specification
- Job description: The tasks, duties and responsibilities someone will need to carry
out as part of a specific job.
+ Usefulness: offers ample information about the job which helps the
management in evaluating the job performance and defining the training
needs of an employee
+ Benefit: helps the organization to be clear about 'Who should do what'
- Job specification: The required qualifications, skills, personal qualities, etc. for a
specific job.
+ Usefulness: helps the candidates who are applying for a job to analyze
whether they are eligible for a particular job or not
+ Benefit: helps the management to make decisions regarding promotion,
bonuses, internal transfers, and salary increases

Unit 6: CLASSIFICATION OF BUSINESS

1.

Unit 7: PRODUCTION
1. What is Job Production, Batch Production, Flow Production? Advantages and
disadvantages?
- Job production: the production of items one at a time.
+ Advantages:
• It is most suitable for personal services or 'one-off' products.
• The product meets the exact requirements of the customer.
• The workers often have more varied jobs (they don't carry out just one
task).
+ Disadvantages:
• Skilled labor is often used.
• The costs are higher because it is often labor intensive.
• Production often takes a long time
- Batch production: the production of goods in batches. Each batch passes through
one stage of production before moving onto the next stage.
+ Advantages:
• It is a flexible way of working and production can easily be changed from
one product to another.
 • It still gives some variety to workers' jobs.
• Production may not be affected to any great extent if machinery breaks
down.
+ Disadvantages:
• It can be expensive as semi-finished or finished products will need
moving about.
• Machines have to be reset between production batches which means there
is a delay in production and output is lost.
- Flow production: the production of very large quantities of identical goods using
a continuously moving process
+ Advantages:
• There is a high output of a standardized product.
• Costs are kept low and therefore prices are also lower.
• It is easy for capital-intensive production methods to be used - reducing
labour costs and increasing efficiency.
+ Disadvantages:
• It is a very boring system for the workers, so there is little job satisfaction,
leading to a lack of motivation for employees.
• The capital costs of setting up the production line can be very high.
• If one machine breaks down the whole production line will have to be
halted.
2. What do you think the objectives of a production department usually are?
- It involves planning, executing, and directing operations to convert raw materials
into finished goods and services.
- Maximizing profit is the primary goal of the production department.
3. What particular skills do you think production and operations managers require?
- The most important skill is communication. Other required skills are relationship
management, active listening and critical thinking as well.
- To perform their duty effectively, they should have planning skill,decision-making
ability and problem solving skill.

Unit 9: QUALITY
1. What does quality mean to you, brainstorm as many ideas as possible?
- To me, quality means the standard of something as measured against other things
of a similar kind; the degree of excellence of something. It also means a
characteristic or feature of someone or something.
- There are many benefits to a business from producing quality products:
 • helps create customer loyalty
• reduces costs of customer complaints: paying compensation, replacing defective
products and loss of consumer goodwill
• helps prolong product life cycles
• reduces the cost of advertising, as the brand will establish a quality image
through the performance of its products
• raises the prices that can be charged for quality goods and services.
2. What are quality control and quality assurance? Advantages and disadvantages
of QC and QA?
- Quality control is the checking for quality at the end of the production process,
whether it is the production of a product or service.
+ Advantages:
• tries to eliminate faults or errors before the customer receives the product
or service
• less training required for the workers.
+ Drawbacks:
• expensive as employees need to be paid to check the product or service
• identifies the fault but doesn't find why the fault has occurred and
therefore is difficult to remove the problem
• increased costs if products have to be scrapped or reworked or service
repeated
- Quality assurance is the checking for quality standards throughout the production
process, whether it is the production of product or service.
+ Advantages:
• tries to eliminate faults or errors before the customer receives the product
or service
• fewer customer complaints
• reduced costs if products do not have to be scrapped or reworked or
service repeated.
+ Drawbacks:
• expensive to train employees to check the product or service
• relies on employees following instructions of standards set.
3. What is TQM? Advantages and disadvantages of TQM?
- Total quality management (TQM) is a philosophy that was very popular in the
1980s and 90s. It aims to put an awareness of quality at the heart of all
organizational processes and not just production. It puts an emphasis on a
 continual increase in customer satisfaction combined with lowering costs by
eliminating waste.
- Advantages:
• quality is built into every part of the production of a product or service and
becomes central to the ethos of all employees
• no customer complaints and so brand image is improved - leading to higher sales
• reduced costs as products do not have to be scrapped or reworked or service
repeated
• waste is removed and efficiency increases.
- Drawbacks:
• expensive to train employees to check the product or service
• relies on employees following TQM ideology.
4. How does TQM affect business?
- TQM often involves a significant change in the culture of an organization.
Employees can no longer think that quality is someone else's responsibility. The
search for quality must affect the attitudes and actions of every employee.

Unit 10: MARKETING

1. What is marketing?
- Marketing is the management process responsible for identifying, anticipating and
satisfying customer requirements profitably.
2. Advantages and disadvantages of market segmentation?
- Advantages:
• It enables identification of gaps in the market and groups of consumers that are
not currently being targeted, which might then be successfully exploited.
• Price discrimination between consumer groups can be used to increase revenue
and profits.
- Disadvantages:
• Research and development and production costs might be high as a result of
needing to make and market different product variations.
• Production and inventory holding costs will be higher than for producing and
selling just one undifferentiated product.
• Extensive market research is needed to identify market segments and their needs
3. Differentiate market segmentation and market segment.
- The difference between market segmentation and market segment is that the
former is the process, whereas the latter is the result. In order to create market
segments, the business needs to go through the process of market segmentation.
 - Market segmentation is the process of categorizing the market into different
groups, according to demographic, geographic, behavioral and psychographic
traits. The target market is the market segment that the business is focusing on for
a specific product or marketing campaign.
4. What are four stages of a product life cycle?
- Introduction: This is when the product has just been launched after development
and testing. Sales are often quite low to begin with and may increase only quite
slowly. But there are exceptions, such as a newly launched music download by a
global rock star.
- Growth: If the product is effectively promoted and well received by customers,
then sales should grow. This stage cannot last forever. Eventually, sales growth
will begin to slow. The slowing down of sales growth may take days, weeks or
even years. This leads the product into the next stage. The reasons for growth
slowing or sales falling include increasing competition, technological changes
making the product less appealing, changes in consumer tastes and saturation of
the market.
- Maturity or saturation: At this stage, sales fail to grow, but they do not decline
significantly either. This stage can last for years, as for example with Coca-Cola.
- Decline: During this phase, sales will decline steadily. Either no extension strategy
has been tried or it has not worked, or else the product is so obsolete that the only
option is replacement. Newer products from competitors are the most likely cause
of declining sales and profits. When the product becomes unprofitable or when its
replacement is ready for the market, it will be withdrawn.
5. Market leader, market challenger, market follower, market niche
- Market Leader: the leader of the brand’s market. Market leaders expand their
market share by developing new customers, more customers, and more usage.
Often, they do so through continuous innovation.
- Market Follower: effectively copies the market leader while positioning its brand
slightly differently.
- Market Challenger: Market challengers want to aggressively steal market share
from the market leader. They focus on finding or creating differentiators to exploit
opportunities. Pepsi is a good example of a challenger brand. It ran a series of
taste-test campaigns wherein people rated its cola taste higher than Coke.
- Market Niche: Companies in market niches intend to dominate specific segments.
These are generally smaller companies that can’t effectively compete against
market leaders for a variety of reasons, but can reach their business goals through
 focusing on differentiating factors that speak to highly specific and targeted
consumer groups.
6. Why do some companies introduce multiple branding strategies?
- Having multiple brands increases brand visibility. The more visibility you have,
the more trust customers tend to have for it.

Unit 11: ADVERTISING

1.What is advertising ?
- Advertising is a means of communication with the users of a product or service.
Advertisements are messages paid for by those who send them and are intended to
inform or influence people who receive them.
2. Advantages and disadvantages of advertising?
Advantages:
- Market Expansion: The main objective that a manufacturer or a company achieves
through advertising is market expansion. With advertising, a manufacturer or
company sustains its position in existing markets and expands its business in new
ones. Advertising is one of the best mediums to create a new customer base and
keep the old ones engaged.
- Increases Revenue: One of the significant positive characteristics of advertising is
that it can lead to an increase in sales and revenue. Furthermore, advertising can
help businesses reach new markets, which in turn can help to boost their existing
sales. In fact, advertising is a powerful tool for attracting new prospective
customers, thereby helping to increase a company’s sales
- Increases Competition: In today’s world of cut-throat competition, advertising is a
well-tested method of staying ahead of competitors. Correct product positioning
and advertising campaigns are bound to produce favorable results for the business.
They bring in new customers and help increase the company’s revenues.
- Builds Consumer Trust: When any manufacturer or company advertises their
product, cause, or service, they ask customers to impose their faith in the
company. Constant advertising pushes the company to build better-quality
products and helps establish goodwill among the company’s customers.
- Build Salesmanship: Advertising is one of the best methods to promote and build
salesmanship. When a prospective customer is attracted to any product or service,
the onus of convincing the customer to buy that specific product or service lies
with the salesman. Correct product campaigning adds value to the words of the
salesman.
Disadvantages:
 - Never Guarantees Sale: Advertising is a way of promoting new products and
services in the market, but it does not guarantee an increase in sales or the creation
of a new customer base. Maximum advertising can create hype around a specific
product, but it cannot do wonders until the product or service is beneficial and of
good quality.
- Can Lead to Negative Publicity: Creating new products with new, coming-of-age
technology is necessary for today’s competitive environment. Companies work
very hard to stay ahead of their competitors. Advertising can make a negative
impact on consumers. If a product ends up looking similar in design or
specifications to rival products, this only adds confusion in the minds of
consumers, which hurts both companies and the product.
- Increases the Cost of Marketing: Companies and manufacturers invest much of
their revenues and profits in advertising. There are times when the campaign
produces a favorable result, thus bringing good cash flow, and at the same time, if
the results are not so favorable, it can end up increasing the marketing cost for the
company.
- Creates Monopoly: Advertising also creates a monopolistic situation. Companies
with considerable brand value and unlimited resources spend billions and billions
of dollars on advertising, while companies with limited and restrictive resources
end up with losses. Big companies tend to create their monopoly over markets,
thus affecting consumers and other small players.
- Distortion of Facts: Not everything that glitters is gold. However, advertising
today tells a very different story. Companies often sell their products and services
by misrepresenting and distorting the facts. They create successful advertising
campaigns and portray their products as superior. This attracts consumers, and
they end up buying a mediocre product with mediocre specifications. This
provides enormous revenues for the companies, but consumers feel cheated.
3. Differences between marketing and advertising?
- Marketing is the systematic planning, implementation. and control of a mix of
activities intended to bring together buyers and sellers for the mutually
advantageous exchange or transfer of products or services
- Advertising is only one component of the overall marketing process

Unit 12: BANKING

1. What are Commercial banks and Investment banks ?
- Commercial banks is a type of financial institution that provides a range of
financial services, including accepting deposits, offering various types of loans,
 and managing payment systems, catering to individuals and businesses, with the
aim of facilitating economic development and ensuring the efficient functioning of
the financial system.
- Investment banks mainly deal with companies and other large institutions and
they typically do not deal with retail customers. The main role of investment banks
is to help companies and governments raise funds in the capital market either
through the issue of stock

2. What is the difference between Commercial bank and Investment bank?

- The main difference between commercial banking and investment banking is that
the former refers to deposit and lending business while the latter relates to
securities underwriting and other security- related business.

Unit 13: ACCOUNTING AND FINANCIAL STATEMENT

1. What is management’s responsibility for the financial statements ?
2. The statement of financial position (balance sheet) ?
- The statement of financial position records the net wealth or shareholders’ equity
of a business at one moment in time. In a company this net wealth belongs to the
shareholders. The aim of most businesses is to increase the shareholders’ equity by
raising the value of the assets owned by the business by more than any increase in
the value of liabilities.
- The balance sheet (statement of financial position) shows the value of a business’s
assets and liabilities at a particular time.
3. Why is the cash flow statement useful to the users of the financial statements ?
4. What is financial statement articulation ?

Unit 14: THE BUSINESS CYCLE

1.What is business cycle?
- A business cycle is a cycle of fluctuations in the Gross Domestic Product (GDP)
around its long-term natural growth rate. It explains the expansion and contraction
in economic activity that an economy experiences over time
2. Why does unemployment rise during the recession phase of the business cycle ?
- Unemployment rises during the recession phase of the business cycle because the
aggregate supply is typically more than the aggregate demand so there is less of a
 need for employees, and fewer goods and services are being produced. Cyclical
unemployment increases because businesses begin laying off workers in the need
to save money because of low demand for their products.
3. What is the difference between a recession and a depression ?
- The difference between a recession and a depression is that a recession is when an
economy is on a more gradual decline while a depression is when an economy's on
steep downturn, more than a recession
4. How many stages/phases are there in the business cycle?
The business cycle contains six phases including: expansion, peak, recession, depression,
trough and recovery.
- Expansion: In this stage, there is an increase in positive economic indicators such
as employment income, output, wages, profits, demand, and supply of goods and
services. Debtors are generally paying their debts on time, the velocity of the
money supply is high and investment is high.
- Peak:
• The maximum limit of growth is attained.
• The economic indicators do not grow further and are at their highest
• Prices are at their peak.
• This stage marks the reversal point in the trend of economic growth.
• Consumers tend to restructure their budgets at this point
- Recession: The demand for goods and services starts declining rapidly and
steadily in this phase. Producers do not notice the decrease in demand instantly
and go on producing, which creates a situation of excess supply in the market.
Prices tend to fall. All positive economic indicators such as income, output, wages,
etc, consequently sa to fall
- Depression: There is a commensurate rise in unemployment. The growth in the
economy continues to decline, and as this falls below the steady growth line, the
stage is called a depression. In the depression stage, the economy's growth rate
becomes negative
- Trough: There is further decline until the prices of factors, as well as the demand
and supply of goods and services, contract to reach their lowest point.
Consequently, the economy eventually reaches the trough. It is the negative
saturation point for an economy. There is an extensive depletion of national
income and expenditure

Unit 16: EFFICIENCY AND EMPLOYMENT

1. Do you think restructuring can help a business become more efficient ?
 - Yes, restructuring can help a business become more efficient by optimizing
processes, improving resource allocation and enhancing overall organizational
effectiveness.
2. What is delocalization ?
- Delocalization is the process of creating efficiency through the utilization of
external service providers or automation technology to provide operational
solutions that would otherwise be done internally.
- Delocalization refers to the movement of business operations, production, or
services from a specific location to other areas, often to reduce costs or access new
markets.
3. How can you interpret the term “ business efficiency” ?
- Business efficiency is defined as the degree to which an enterprise rationally
allocates its limited resources to achieve predetermined goals after taking the
constraints of the internal and external environment into account
- Business efficiency refers to the ability of a company to optimize its process
resources, and operations to achieve maximum output while minimizing input,
time, and costs.
4. What is the purpose of rationalization ?
- The purpose of rationalization is to streamline and optimize processes, resources,
and operations within a business, leading to increased efficiency and effectiveness
5. What does “ redundancy package” mean ?
6. What notable cases of restructuring or downsizing or delocalizing have there been in
the news recently ? What was the reaction ?
7. In a situation where there is growing unemployment, what are the advantages and
disadvantages of the following partial solutions ?

Unit 17: International trade