INTRODUCTION TO BUSINESS

Anum Shah Roll No#3367

WHAT IS BUSINESS?

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

WHAT IS BUSINESS

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

PROCESS OF ANY BUSINESS

INPUT
Factors Of Production Land Labor Capital Entrepreneurship

PROCESS
Purchasing Inventory Production Distribution Marketing - Sales

OUTPUT
Realization of Profits Demand Satisfaction Need Fulfillment

Information Resources

Finance - Accounting

INPUT
All the factors of productions are the input of any business  Land  Labor  Capital  Entrepreneurship

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

LABOR:
“Any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the word is called labor” :

DIVISION OF LABOR

Simple division of labor: division of society into major occupations e.g. carpenters, blacksmith, weavers, etc .it may be also called functional divisional of labor Complex Division of Labor: split up into a number of processes and sub-processes and is carried out by a separate group of people Territorial Division Of Labor

Kinds Of Labor

Physical Labor:  Intellectual Labor:  Presentation:

CAPITAL
“Capital refers to that part of a man’s wealth which is used in producing further wealth or which yields an income”

CAPITAL
It is raised from the sole proprietor, partners or shareholders. Shapes of Capital: plant , machinery ,tools , and accessories , stocks of raw material ,goods in process and fuel

ENTREPRENEURS
Entrepreneur is the innovator  An entrepreneur is an individual who accepts financial risks and undertakes new financial ventures.

INFORMATION

Information resource plays a vital role

ECONOMIC SYSTEM

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

KINDS OF ECONOMIC SYSTEM
Capitalism  Socialism  Islamic  Mixed economy

CAPITALISM
“The economic system allowing private ownership of all or most of the means of productions and distribution(land, industrial, railways) with the main motivation of profit”

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

SOCIALISM
“socialism is an economic organization of society in which the material means of production are owned by the whole community and operated by the organs representatives of, and responsible to, the community according to a general plan, all members of the community being entitled to benefits from the results of such socialized planned production on the basis of equal rights” (Dickenson)

MIXED ECONOMIC SYSTEM
“Mixed economic system is a system comprising of both capitalism and socialism pattern” “In other words an economic system in which few characteristics of capitalism and few of socialism are found is called mixed economy”

ISLAMIC ECONOMIC SYSTEM
“It is the system free from exploitation . It allows every person to earn his or her livelihood from legitimate sources and discourages concentration of wealth and extravagance”

MARKET BASED ECONOMY
MARKET “Originally”, Says Jevons, “a market was a public place in a town where provisions and other objects were exposed to sales” “Economists understand by the term market not any particular market place in which things are bought and sold but the whole of any region in which buyers and sellers are in such free intercourse with one another that the price of the same goods tends to equality easily and quickly”
(Cournat French economist)

ESSENTIALS OF MARKET
A commodity which is dealt with  The existence of buyer and seller  A place, may be a certain region, a country  Such intercourse between buyers and sellers that one price should prevail for the same commodity at the same time

WHAT IS DEMAND?
“The various quantities of a given commodity or service which consumers would buy in one market in a given period of time at various places, or at various incomes, or at various prices of related goods” (Bober)

Price(thousan d) 10 20 30 40 50

QUANTITYQuantity Demanded DEMANDED
(kg) 5000 4000 3000 2000 1000

Price(thousand ) 10 20 30 40 50
6000 5000 4000 3000 2000 1000 0 1 2

QUANTITY SUPPLIED
1000 2000 3000 4000 5000

Quantity supplied KG

price quantity demanded

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5

Price(thousand)Quantity Demanded (kg) 10 5000 20 4000 30 3000 40 2000 50 1000
6000 5000 4000 3000 2000 1000 0 1 2 3

PRICE DETERMINED

Quantity supplied KG 1000 2000 3000 4000 5000

Price(thousand ) Quantity Demanded (kg) Quantity supplied KG

4

5

MARKET BASED ECONOMY HISTORY

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

THE FACTORY SYSTEM AND THE INDUSTRIAL REVOLUTION

The result of many fundamental, interrelated changes that transformed agricultural economies into industrial ones Widespread replacement of manual labor Productivity and technical efficiency grew dramatically Efficiency was also enhanced

LAISSEZ-FAIRE AND THE ENTREPRENEURIAL ERA
the

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

THE PRODUCTION ERA
Productivity

emphasis Mass production Car manufaturing

THE MARKETING ERA
business

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

THE GLOBAL ERA
Technological growth  Global market  Globally consumption  Global production

THE INTERNET ERA
How does the growth of the Internet affect business?
1.

The Internet will give a dramatic boost to trade in all sectors of the economy, especially services. The Internet will serve to level the playing field, at least to some extent, between larger and smaller enterprises regardless of what products or services they sell. The Internet also holds considerable potential as an effective and efficient networking mechanism among businesses.

2.

3.

INFLATION

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

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

A Bundle of Marks After World War I (19141918), inflation in Germany was so high that millions of marks were required to buy even the most basic item. As a result, German money frequently had more value as kindling than as legal tender. Shown here, a German woman prepares to light her stove with a bundle of paper currency.

CAUSES OF INFLATION
Demand-pull inflation when aggregate demand exceeds existing supplies forcing price increases and pulling up wages, materials, and operating and financing costs

CAUSES OF INFLATION
Cost-push inflation  when prices rise to cover total expenses and preserve profit margins

EVALUATING ECONOMIES

EVALUATING ECONOMIES

Economic growth “Economic growth occurs whenever people take resources and rearrange them in ways that make them more valuable. “

EVALUATING ECONOMIES

Full Employment the economic condition when everyone who wishes to work at the going wagerate for their type of labor is employed

UNEMPLOYMENT “AN ECONOMIC CONDITION MARKED

BY THE FACT THAT INDIVIDUALS ACTIVELY SEEKING JOBS REMAIN UN HIRED” 

GROSS DOMESTIC PRODUCT
“The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports”

GDP PER CAPITA An approximation of
the value of goods produced per person in the country, equal to the country's GDP divided by the total number of people in the country.

GDP of a country to which income from abroad remittances  of nationals living outside and income from foreign subsidiaries of local firms has been added.

EVALUATING ECONOMIES
budget deficit occurs when an entity spends more money than it takes in.  The balance of trade  is the difference between the monetary value of exports and imports in an economy over a certain period of time.

TYPES OF BUSINESS ORGANIZATION

TYPES OF BUSINESS ORGANIZATIONS

Sole Proprietorship

Partnership

Corporation

SOLE PROPRIETORSHI P
“It is the business which is owned by a single owner who is referred to as sole proprietor and enjoys benefits which other ownership cannot”

SOLE PROPRIETORSHIP Advantages: Disadvantages:
› › › › ›

Freedom Privacy Succeed or fail alone Simple to form Low start-up costs

› › ›

Unlimited liability Dissolves when owner dies Depends on resources of single individual

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

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

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

PARTNERSHIP Advantages:

Disadvantages:
› ›

New talent & money stimulate growth Easier to borrow money Resources of more than one individual Relatively easy to form Partners are taxed as individuals

Partners share unlimited liability Must file specific info about business & partners Dissolves when partner leaves or dies Difficult to transfer ownership Internal conflict

› › › ›

› ›

ALTERNATIVES TO GENERAL PARTNERSHIP
Limited Partnership
Type of partnership consisting of limited partners and an active or managing partner

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

General Partner
(Active Partner) Partner who actively manages a firm and who has unlimited liability for its debts

“PARTNERSHIP LIABILITY”
GENERAL PARTNERSHIP

Claims of Creditors

General Partner’s Personal Assets

Partnership’s Assets

General Partner’s Personal Assets

“PARTNERSHIP LIABILITY”
LIMITED PARTNERSHIP

Claims of Creditors

General Partner’s Personal Assets

Partnership’s Assets

Limited Partner’s Personal Assets
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CORPORATI ON

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

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

CORPORATION

Advantages:
Limited liability  Continuity  Easy to transfer ownership  Easy to raise money

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

TYPES OF CORPORATIONS
Closely Held (Private) Corporation
Corporation whose stock is held by only a few people and is not available for sale to the general public

Publicly Held (Public) Corporation
Corporation whose stock is widely held and available for sale to the general public

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

TYPES OF CORPORATIONS
Limited Liability Corporation (LLC)
Hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability

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

Multinational or Transnational Corporation
Form of corporation spanning national boundaries

CREATING AND MANAGING A CORPORATION
  

Creating a Corporation Corporate Governance Special Issues in Corporate Ownership

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

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

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

CORPORATE GOVERNANCE
Corporate Governance
Roles of shareholders, directors, and other managers in corporate decision making

Stockholder (or Shareholder)
Owner of shares of stock in a corporation

Stock
Share of ownership in a corporation

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

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

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

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

“CORPORATE GOVERNANCE HIERARCHY”
Stockholders

Purchase ownership shares, and own the corporation

Board of Directors

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

Responsible for corporation’s overall performance

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

JOINT VENTURE
A contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise.

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

SPECIAL ISSUES IN CORPORATE GOVERNANCE

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

CORPORATE OWNERSHIP

MERGERS
Mergers are business combination transactions involving the combination of two or more companies into a single entity. Most state laws require that mergers be approved by at least a majority of a company's shareholders if the merger will have a significant impact on either the acquiring or target company.

MERGERS
Horizontal Merger  Vertical Merger 
Merger involving firms in the same industry Merger between firms that are customers and/or suppliers to one another Merger between firms in unrelated businesses

Conglomerate Merger 

Takeover Tactics
A takeover is considered friendly when the acquired company

Divestiture

DIVESTITURES & SPIN-OFFS
Strategy whereby a firm sells one or more of its business units

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

SMALL BUSINESS AND ENTREPRENEURSHIP
Advantages of new ventures New blood New ideas Flexibility in the tenure

ENTREPRENEUR AND ITS CHARACTERISTICS
An entrepreneur is an individual who accepts financial risks and undertakes new financial ventures.

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

THREATS TO NEW SMALL BUSINESS
No expertise  Lack of experience  Lack of financial resources  Less tenure of operating the business

LAUNCHING OPTIONS
Start up  Buying an existing business  franchising

START UP
Advantages:  You are the boss  You are not answerable to others

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

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

 FRANCHISING 
“Any arrangement in which the owner of trademark, trade name or copyright has licensed others to use it and sell its goods or services “

ADVANTAGES OF  FRANCHISING
Training and guidance  Brand name appeal  Proven track record  Financial assistance

DISADVANTAGES OF  FRANCHISING
 Franchise fee  Franchisor control  Unfulfilled promise

IMPACT OF NEW BUSINESS ON THE ECONOMY
New employment opportunities  New ideas  New innovations

INTRAPRENEURS
“Individual within an organization who is allowed to operate as an entrepreneur. Intrapreneurs can be senior managers in companies that have decided to introduce internal competition where areas of the business are run as profit centers”

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

HUMAN RESOURCE MANAGEMENT
“Set of organizational activities directed at attracting, developing, and maintaining an effective workforce” “Activities undertaken to attract ,develop and maintain an effective workforce within an organization”

HRM CHALLENGES: MAJOR HURDLES  Age factors
Environment factors  Cultural factors

HUMAN RESOURCE PLANNING
assess future recruitment needs  anticipate and possibly avoid redundancies  formulate training programmes  develop a promotion and career development policy including succession planning  keep staff costs to a minimum while permitting salaries to be competitive  assess future premises requirements.

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

HUMAN RESOURCE PLANNING

JOB ANALYSIS
Job analysis may be defined as a methodical process of collecting information on the functionally relevant aspects of a job. Job analysis tells the human resources personnel the time it takes to complete relevant tasks

JOB ANALYSIS
the tasks that are grouped together under a single job position  the ways to design or structure a job for maximizing employee performance

the employee behavioral pattern associated with performance of the job  the traits and attributes of a proper candidate for the job  the ways the data can be used to develop human resource management

JOB DESCRIPTION

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

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

JOB SPECIFICATIONS
 Job specifications define the characteristics of the activities associated with the job and given in the job description. They describe the skill sets and qualifications that a candidate for the job should possess.

INTERNAL RECRUITING
Advantages of internal recruiting:  Recruiting costs  Motivation  Familiarity

INTERNAL RECRUITING
Disadvantages of internal recruiting:  Inbreeding  EEO Criteria  More training

INTERNAL RECRUITING
Potential Advantages  easier to assess candidates since more information is available  less costly and quicker than an external search  promoted employee is already familiar with organization policies, culture, etc.

signals to employees that career opportunities exist in organization   improve employee morale and organization loyalty

INTERNAL RECRUITING
Potential Disadvantages   narrowing of thinking and stale ideas (inbreeding)  possible discontent of rejected applicants   boss / subordinate relations can be problematic

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

EXTERNAL RECRUITING
Potential Advantages  provides new ideas / fresh perspectives   initiate a turnaround   reduce expensive training by hiring experienced employee

 may be less upsetting to present organizational hierarchy   allows rapid growth  increase diversity 

RESOURCES OF EXTERNAL RECRUITMENT
Employment websites  Govt and federal agencies  Personal references  Job fairs  Trade associations

EXTERNAL RECRUITING
Potential Disadvantages  takes longer and costs more   little information about candidate’s ability to fit with rest of organization   destroys incentive of present employees to strive for promotion

 outsider takes time to become familiar with current systems   current organization members may fight new ideas

SELECTION: MAKING THE RIGHT CHOICE

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

INTERVIEW
Serves as a two way communication process that allows both the organization and applicant to collect info that would otherwise be difficult to obtain

TYPES OF INTERVIEW
Structured interview Questions are written in advance  Unstructured No prior questions are made

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

REFERENCES AND BACKGROUND

Reference and background are checked

ORIENTATION
orientation course: a course introducing a new situation or environment   Introduction to the employee is given

TRAINING
It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviors to enhance the performance of employees. 

ON-THE-JOB TRAINING
On-the-job training (OJT) is one of the best training methods because it is planned, organized, and conducted at the employee's worksite.

OFF-THE-JOB TRAINING
Employee training at a site away from the actual work environment. It often utilizes lectures, case studies, role playing, simulation, etc. See also on the job training.

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

SEPARATION: BREAKING UP IS HARD TO DO

As termination or retirement of the emplyees take place

MARKETING
“The process of planning and executing the conception, pricing, promotion and distribution of ideas ,goods, services to create exchanges that satisfy individual and organizational objective”

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

MARKETING MIX
The major marketing management decisions can be classified in one of the following four categories:  Product  Price  Place (distribution)  Promotion

SUMMARY OF MARKETING MIX DECISIONS

Product Functionality Appearance Quality Packaging Brand Warranty Service/Supp ort

Price List price Discounts Allowances Financing Leasing options

Place Channel members Channel motivation Market coverage Locations Logistics Service levels

Promotion Advertising Personal selling Public relations Message Media Budget

PRODUCT LIFE CYCLE
A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.

PRODUCT LIFE CYCLE DIAGRAM
         

PRODUCT
Consumer goods  Industry goods

CONSUMER GOODS
Convenience goods  Shopping  Specialty  unsought

INDUSTRY GOODS
Purchase of merchandise  Fixed asset purchase

PRICING
Through this a company receives reward against its product  More than the cost price  Maximizing profit  Minimizing loss

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

DISTRIBUTION

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

MARKETING ENVIRONMENT
Cultural  Social  Legal  political

MARKET SEGMENTATION

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

Geographic segmentation is based on regional variables such as region, climate, population density, and population growth rate.  Demographic segmentation is based on variables such as age, gender, ethnicity, education, occupation, income, and family status.

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

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

FACTORS INVOLVES IN TARGETING MARKET
Social  Cultural  Political  Environmental

MARKETING RESEARCH

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

Marketing Research vs. Market Research These terms often are used interchangeably, but technically there is a difference. Market research deals specifically with the gathering of information about a market's size and trends. Marketing research covers a wider range of activities. While it may involve market research, marketing research is a more general systematic process that can be applied to a variety of marketing problems

MARKETING PLAN OUTLINE
I.   Executive Summary  A high-level summary of the marketing plan.  II.   The Challenge  Brief description of product to be marketed and associated goals, such as sales figures and strategic goals. 

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

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

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

IV.   Market Segmentation  Present a description of the market segmentati On V.   Alternative Marketing Strategies  List and discuss the alternatives that were considered before arriving at the recommended strategy. Alternatives might include discontinuing a product, re-branding, positioning as a premium or value product, etc

VI.   Selected Marketing Strategy  Discuss why the strategy was selected, then the marketing mix decisions (4 P's) of product, price, place (distribution), and promotion VII.   Short & Long-Term Projections  The selected strategy's immediate effects, expected long-term results, and any special actions required to achieve them. This section may include forecasts of revenues and expenses as well as the results of a break-even analysis

VIII.   Conclusion  Summarize all of the above

CONSUMER BEHAVIOR
The action that a person takes in  Purchasing and using product and services  The mental and social processes that proceed and follow these actions

INFLUENCES ON CONSUMER BEHAVIOR
Social  Personal  Psychological

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

THEORY X AND THEORY Y
Theory X Assumptions:  People inherently dislike work  People must be coerced or controlled to do  work to achieve objectives  People prefer to be directed

Theory Y Assumptions:  People view work as being as natural as play and rest  People will exercise self-direction and -control towards achieving objectives they are committed to  People learn to accept and seek responsibility

TWO FACTOR THEORY

Motivator factors increase job satisfaction:  Achievement

Recognition Work itself Responsibility Advancement Growth

Hygiene factors are those whose absence can create job dissatisfaction:  Supervision

Company policy Working conditions Salary Peer relationship Security

Specific goals increase performance, and difficult goals, when accepted, result in higher performance than easy goals.  An employee compares her/his job's inputsoutcomes ratio with that of referents. If the employee perceives inequity, she/he will act to correct the inequity:  Lower productivity  Reduced quality  Increased absenteeism  Voluntary resignation.

EQUITY THEORY

LEADERSHIP
Leadership is one of the most salient aspects of the organizational context. “The ability to influence people towards the attainment of organizational goals” “Leadership is the ability to secure desirable actions from a group of followers voluntarily , with out use of coercion””

THEORIES
Trait thoery “Traits are the distinguished personal characteristics of a leader , such as intelligence, value and appearance”  Behavioural theory

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

Contingency Theories • Right leader’s style needs to be matched to the right setting. • Two major styles – Task motivated and relationship motivated. • Three situation variables: – Leader-member relations – Task structure – Position power

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

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

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

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

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

GLOBALIZATION
Name for the process of increasing the connectivity and interdependence of the world's markets and businesses. 

TRADING BLOCKS AND COUNTRY GROUPS

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

TRADING BLOCKS AND COUNTRY GROUPS

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

TRADING BLOCKS AND COUNTRY GROUPS
SAARC MEMBER COUNTRIES Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka  http://www.saarc-sec.org/ 

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

TRADING BLOCKS AND COUNTRY GROUPS

NAFTA MEMBER COUNTRIES Canada, Mexico, United States of America http://www-tech.mit.edu/Bulletins/nafta.html 

TRADING BLOCKS AND COUNTRY GROUPS

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

TRADING BLOCKS AND COUNTRY GROUPS

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

FDI

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

BARRIERS TO INTERNATIONAL TRADE

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

BARRIERS TO INTERNATIONAL TRADE
Import duty  Import licenses  Export licenses  Import quotas  Tariffs  Subsidies  Non-tariff barriers to trade  Voluntary Export Restraints  Local Content Requirements  Embargo

EMBARGO

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

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

SUBSIDY
Financial aid given by the government to individuals or groups.

CARTEL
A cartel is a counterfeit agreement among industries. It is an informal organization of producers that agree to coordinate prices and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products. 

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