Noted

For Revision
CSR
 CSR is actually business sense of duty to maximize its positive impact and minimize its
negative impact of all its business activities on society and the environment.
Type
 Social responsibility
Involved people that means you have different form of discrimination in HR practices centrals
should be avoided the recruitment, terminations and promotions are done according to the
company polices and company should not have a child forced labour.
 Environmental responsibility
About any form of pollution, air pollution and they also have deforestation over dependence
on fossil fuels, unsustainable development and wastage of natural resources.
Advantage
 It improves Profitability and Value

 Improve organizations reputation and company brand image

 Increased sales and customer loyalty

 Reduced operating costs

 By reducing resources use, waste and emissions, which can help the environment and
save money too because company may be able to lower the utility bills and achieve
savings for business. Besides business might reduce wastage amount due to CSR,
which lead to reduce business waste to save money.

 Greater ability to attract talent and retain staff

 Being a responsible, sustainable business may make it easier to recruit new employees
or retain existing ones. Employees may be motivated to stay longer, thus reducing the
costs and disruption of recruitment and retraining.

Disadvantage
 High cost
 The system of CSR into its operations are different from employee’s usual mode of
practice, in order to meet the requirement of CSR, they need to incur special costs for
implementing such different mode of operation. Besides, employees are not familiar
to the operations, so company required to fulfill such as training employees, or
recruiting talented employees, which increases the overall costs.

 Clashing of business objective

 The main aim of a business organization is to create profits, which is why it produces
various product and services to the customers, in order to be gain profits but CSR
requires the corporations to keep interests of the people into consideration, which can
cause a conflict in the business objectives of the corporation while making important
decision. For example, whether or not to buy a land that is beneficial for the business
needs, but such buying will not be beneficial for people living around the land.

Ethical issues
 An ethical issues is a problem, situation or an opportunity that requires a person to
choose from several actions that may be evaluated as right or wrong ethical or
unethical.
Example:
 Brides happen in developing countries for example Malaysia is like a concept of
( rasuah)
 Misuse of company time means that you are engaging your personal activity during
working time.
 Abusive and intimidating behavior refers to actions or words
 Misuse of company resources
 Conflict of interest

Problem Solving
 Being Honesty and fair
 Company needs to be honest and fair to the community, employees, customer,
consumer, competitors and etc.
Example:
 Using unharmful products which cannot cause damage to the health of customers.
 Having a fair competition with competitors.
 Not copying another person work 100%

 Having decisions making to reduce the ethical issues (think before you do)
Ethical decisions making
 Questions you should consider before making a decision.
 Are there potential legal restrictions or violations that could result from the action?
 Does your company have specific code of ethics or policy on the action?
 Is this activity customary in your industry? Are there any industry trade groups that
provides guidelines or codes of conduct that address issue?
 Would this activity be accepted by your co- workers? Will your decision or action
withstand open discussion with co - workers and managers and survive untarnished?
 How does this activity fit with your own beliefs and values?

Small Business Definition

 This refer to any independently owned and operated business that is not dominant in
its competitive area and does not employ more than 500 people.

How small business contribute

 Job creation
 Innovation
 Opportunities for individuals to achieve financial success and independence
 Support large business
 Integral part 积分的一部分 of local economic

Entrepreneurship
 When a group of people or individuals take risk in order to establish and run a
business.

Entrepreneurs
 A person who risks his or her wealth, time and effort to develop a creative and
innovative product or services for profits.

Social entrepreneurs
 These are individuals who use entrepreneurship to address social problems.
Example:
 Bill Gates
 Steve Johns

Challenges starting a new business

 Undercapitalization 投入资金不足
 The lack of funds to operate the business normally.

 Managerial incompetence 无能力管理

 Management lacking in required skills, knowledge and experience.

 Inability to cope 无法应付

 Due to the reason in number above, when business starts to grow fast it
would be difficult to catch up with the rate of growth.

Why business fail?

Internal causes:
 Lack of management skills
 Not all managers are good at their jobs. Some might not be able to
judge the level of demands correctly and order too much stock, causing
liquidity problems. Other managers might order too little stock, causing
customers dissatisfaction. Managers might struggle to ensure that staff
deliver customer services that is consistent and reliable. This could
potentially lead to negative word of mouth and ultimately deter potential
customers from using that business.

 Liquidity problem
 Liquidity refers to the ability of a business to pay its bills. Money that is
available to spend immediately is known as liquid cash. If a business
invests too much money in stock and machinery, it replaces cash with
illiquid asset 流动性不足资产. As long as the business has access to credit
such as overdraft for emergencies, this is not a problem. However, if
business runs out of cash, it could become insolvent meaning that it does
not have enough money to pay its debt. This would cause the business to
fail.

External causes:
 Economic activity can slow down, leading to less consumer spending and therefore
reducing revenues.
 Customer tastes and preferences can change, leading to fewer customers using certain
business.
 Law can change, leading to certain business costs rising, so that some businesses are
no longer profitable.

Why are new business at greater risk of failing?

 New firms might not yet have the customer base that they need to survive. They are
unlikely to have built up any reserves of retained profit to see themselves through
hard times. A business with no track record of success and of paying bills on time
 might be seen as less credit worthy by banks, so it is less likely to be able to borrow
money in an emergency.

Successful traits of young entrepreneurs

 Intuitive
 Using one’s intuition to derive what’s true without conscious reasoning.

 Productive
 Being able to produce large amounts of something during a specific time period.

 Resourceful
 Understanding how to use and spend resources wisely.

 Charismatic
 Having the ability to inspire others behind a central vision.

 Innovative
 Being able to come up with new and creative ideas.

 Risk-taker
 Having the ability to pursue risky endeavours despite the possibility of failure.

 Persistent
 Continuing in a certain action in spite of obstacles.

 Friendly
 Being able to have mutually beneficial interactions with people.
Franchising
 A franchise from of license to sell another business or company's product or services
or to use their name in running the business or both.

Franchisor
 A firm selling the rights to a franchisee agreement.

Franchisee
 A person buying the rights to a franchise.

Advantage
 Doesn't need business experience
 Franchisors usually provide the training you need to operate their business model.

 Higher rate of success

 Franchisors is a successful brand, so franchises have a higher rate of success than
start-up business.

 Easier to secure finance

 Franchisee may find it easier to secure finance because it may cost less to buy a
franchise than start your own business of the same type.

 Have an established reputation and image

 Franchisee often have an established reputation and image, proven management and
work practices, access to national advertising and ongoing support.
Disadvantages
 Lack of creativity
 Franchise agreements dictate how you run the business, so it might lead franchisee
lack of creativity.

 No freedom
 Franchisor usually restrictions on where you operate, the product franchisees sell and
the suppliers they use.

 Other franchisees might affect your franchise's reputation

 Bad performances by other franchisees may affect your franchise's reputation.

 Sharing profit
 Buying a franchise means ongoing sharing of profit with the franchisor.

Example for business that use franchise:

 McDonald's
 Many of McDonald's restaurants are not owned by McDonald's but by other
companies that have paid an annual fee for the right to trade under the McDonald's
name.

Microenvironment
 It refers to any individual or factors that have a direct and short term impact on the
business.
 It consists of the actors close to the company that affect its ability to serve its
customers.

What it does?
 Microenvironment is the factors or elements in a firm's immediate environment which
affect its performance and decision- making.

What it influences?
 Company

 Customer
 Who pays to acquire the product?

 Media

 Employees

 Shareholders

 Suppliers
 The one who have bargaining power affect the costs structure.

 Competitors
 Other entities that compete for resources as well as markets

 Publics
  Marketing intermediaries
 The one who act as bridge between the manufacturer and marketer.

Departmentalization
 Is a department which comprise of a group of employees, who carry out activities of
similar nature.

Objectives of departmentalization
 To specialize activities.
 To simplify the process and operations of the organization
 To maintain control

Type of functional
 Departmentalization by function
 When the creation of department is on the basis of specified functions, such as
production, marketing, purchase, finance etc. In this method, all the activities related
to a function or which are similar nature are combined in a single unit, to give proper
directions to the entire group in one go.

 Departmentalization by geographical
 When the division is based on the geographical area. This is suitable for the
organizations, that have widespread operations at different locations.

 Departmentalization by product
 When the activities related to product development and delivery are combined into
particular division, it is called as product departmentalization. It is appropriate for
large-scale multi product enterprises.

 Departmentalization by customer
 The grouping of the organization according to the different classes of customer or
clients. It focuses on special customer needs.

Span of control
 The area of activity and number of functions, people, or things for which an individual
or organization is responsible.

Type
 Wide or flat span of control
 The manager supervises or managers a large number of employees working under
him. So, in this case, the organizational structure is wide or flat.

 Tall or narrow span of control

 The number of employees the manager will be supervising will be less and, in this
case,, the organizational structure will be tall or narrow.

Structure
 Wide span of control
 Flat and wide organisation structure
 Few organisational layers
  Less bureaucratic
 Decentralised 分散 decision-making
 More democratic management style

 Narrow span of control

 Tall and thin organisation structure
 Many organisational layers
 Very bureaucratic
 Centralised decision-making
 More authoritarian 权力主义者 management style

Communism
 A society in which regardless of their class status they are the one that own the nation
resources such as it could be a professional in that country or a low wages labour but
both of them have got the right to own the nation resources.

socialism (mixed economic)

 Government owns and operates key industries such as healthcare, education and
banking and any other business will be own by individual.
 Socialism or mixed economic is what we practice I our country.
 Competition is restricted in basic industry but encouraged in small business.

Capitalism (free enterprise)

 Capitalism is more in American countries
 An economic system where own by individuals and operate the majority of business
that provides goods and services.
 Government ownership and interference is quite low, so consumers have a wide
choice of goods and services and prices is determined by supplies and demand
because you have a lot of product in economic and it is all control by individuals not
the government. Government only have very minimum of it so consumer get whatever
they want prices will be determine by the supplies and demand the higher the
demand the more option you have prices will manage a corrodingly.

Comparison of communism, socialism, capitalism

Topic Communism Socialism Capitalism

Business ownership Most business are The government owns Individuals own and
owned and operated and operates some basic operate all business
by the government industries but individual
owns small business

Competition Government controls Restricted in basic Encourage by market

competition and the industries and forces and government
economy encourage in small regulations
business

Profits Excess income goes to Profits earned by small Individuals and

the government. The business may be business are free to
government supports reinvested in the keep profits after
social and economic business and profit from paying taxes
 institutions government owned
industries go to the
government

Product availability Consumers have a Consumers have some Consumers have a wide
and price limited choice of goods choice of goods and choice of goods and
and services and prices services. Pieces are services. Prices are
are usually high determined by supply determined by supply
and demand and demand

Employment Little choice in More choice of careers Unlimited choice of

options choosing a career and and many people work careers
most people work for in government jobs
government owned
industries or farms

Globalization
 Globalizations is a process of political, economic, social culture and technological that
interconnects firms, individuals, government entity internationally.
 Globalizations is an international business taken to a worldwide.

What it influences?
 Globalizations is also an influence of consumers patterns with increasing connectivity
in hand-held devices throughout the world.

Partnership
 When business is own by two or more people.

What it does?
 Partners combine their resources to own and operate a partnership.

Advantage
 Suitable for newly start-up business with low entry costs
 Lower compliance cost

 Less paperwork and additional formalities

 Registration is easy fast and fewer documents are needed.

 More ideas
 Decision-making is shared between the ideas.

 Risk sharing
 Share debt

Disadvantage
 Unlimited liabilities
 Profit sharing
Herzberg Theory
 It defined as two type of factors in deciding employees working attitudes and level of
performance named motivation and hygiene factors.

Type
 Hygiene factors
 Are factors such as pay, safe working conditions, relationships with others and
supervision. They cannot cause motivation, but if they are absent from the
workplaces, they will cause demotivation.

 Motivators
 Are factors such as opportunities for promotion, training and development, feedback
and praise. They will cause workers to be motivated. The more relevant each factor is
to a worker, the more motivated they will become.

Management functions
 The main activities carried out by manager.

Manager
 Individuals in organizations who make decisions about use of resources.

Management function
 Planning
 the process of determining the organization’s objectives and deciding how to
accomplish them, is the first function of management. Planning is a crucial activity
because it designs the map that lays the groundwork for the other functions.

 Organizing
 Rarely are individuals in an organization able to achieve common goals without some
form of structure. Organizing is the structuring of resources and activities to accomplish
objectives in an efficient and effective manner. Managers organize by reviewing plans
and determining what activities are necessary to implement them; then, they divide the
work into small units and assign it to specific individuals, groups, or departments.

 Leading
 During planning and organizing, staffing occurs, and management must direct the
employees. Directing is motivating and leading employees to achieve organizational
objectives. Good directing involves telling employees what to do and when to do it
through the implementation of deadlines and then encouraging them to do their work.

 Controlling
 Is the process of evaluating and correcting activities to keep the organization on course.
Control involves five activities: measuring performance, comparing present
performance with standards or objectives, identifying deviations from the standards,
investigating the causes of deviations, and taking corrective action when necessary.

Human resources functions

 refers to all the activities involved in determining an organization’s human resource
needs, as well as acquiring, training, and compensating people to fill those needs.
Human resource managers are concerned with maximizing the satisfaction of
employees and motivating them to meet organizational objectives productively.
Activities for humans’ resources
 Recruitment
 Means forming a pool of qualified applicants from which management can select
employees. There are two sources from which to develop this pool of applicants—
internal and external.

 Selection
 Is the process of collecting information about applicants and using that information to
decide which ones to hire. It includes the application itself, as well as interviewing,
testing, and reference checking.

 Training
 Training is teaching, or developing in oneself or others, any skills and knowledge that
relate to specific useful competencies. Training has specific goals of improving one's
capability, capacity, productivity and performance.

 Performance Appraisal
 Is the systematic evaluation of the performance of employees and to understand the
abilities of a person for further growth and development.

 Compensation
 Compensation is the total cash and non-cash payments that you give to an employee in
exchange for the work they do for your business. Compensation is more than an
employee's regular paid wages. It also includes many other types of wages and benefits.

 Employee and Labour Relations

 Employee and Labour Relations is concerned with preventing and resolving problems
involving employees which stem out of or affect work situations. In addition, Employee
Relations recognizes employees for service contributed to the Pace community and
provides assistance with professional growth.

Benefit of workforce diversity

 More productive use of a company’s human resources.

 Reduced conflict among employees of different ethnicities, races, religions, and sexual
orientations as they learn to respect each other’s differences.

 More productive working relationships among diverse employees as they learn more
about and accept each other.

 Increased commitment to and sharing of organizational goals among diverse

employees at all organizational levels.

 Increased innovation and creativity as diverse employees bring new, unique

perspectives to decision-making and problem-solving tasks.

 High level of productivity.

 Employees who speak different languages, come from overseas have unique skills and
experiences or come from different backgrounds can introduce new solutions and
perspectives.

 Exchange of varieties, ideas and teamwork

  Each team member contributes different ideas and unique problem-solving perspective
by having multiped minds at the table, company employees can solve problems more
quickly and efficiently.

 Learning and growth

 Employees need to be exposed to new cultures, ideas, and perspectives can potentially
change the way employees think, collaborate with one another, and even affect one's
sense of empathy. To be successful, a company should strive to appeal to multiple
populations and environments. This cultural exposure allows for a wide-ranging
clientele and a better opportunity for the company to be successful.

 Effective communication
 Customers who interact with representatives from his or her geographical area or
cultural upbringing will make the customer feel more comfortable with the
representative and the company itself.

 Diverse experience
 A diverse combination of skills and experiences helps team members more responsive
and adapt to changing conditions easily.

Marketing
 A framework for planning marketing activity, based around the 4P prices, product,
promotion, place.

Market segmentation
 When a group of customers or consumers are divided up into groups which have
similar needs to allow business to more accurately target people who are likely to
want specific products or services.

Market orientation
 When a business focuses on producing goods and services that meet the needs and
wants of customers.

Function of marketing
 Buying
 Everyone who shops for products (consumers, stores, businesses, governments) decides
whether and what to buy. A marketer must understand buyers’ needs and desires to
determine what products to make available.

 Selling
 The exchange process is expedited through selling. Marketers usually view selling as a
persuasive activity that is accomplished through promotion (advertising, personal
selling, sales promotion, publicity, and packaging).

 Transporting
 Transporting is the process of moving products from the seller to the buyer. Marketers
focus on transportation costs and services.

 Storing
  Like transporting, storing is part of the physical distribution of products and includes
warehousing goods.

 Grading
 Grading refers to standardizing products by dividing them into subgroups and
displaying and labelling them so that consumers clearly understand their nature and
quality. Many products, such as meat, steel, and fruit, are graded according to a set of
standards that often are established by the state or federal government.

 Financing
 For many products, especially large items such as automobiles, refrigerators, and new
homes, the marketer arranges credit to expedite the purchase.

 Marketing Research
 Through research, marketers ascertain the need for new goods and services. By
gathering information regularly, marketers can detect new trends and changes in
consumer tastes.

 Risk Taking
 Risk is the chance of loss associated with marketing decisions. Developing a new
product creates a chance of loss if consumers do not like it enough to buy it.

Approaches of market segmentation in developing marketing strategy

 Concentration approach
 A strategic approach in which a business focuses on a single market or product. This
allows the company to invest more resources in production and marketing in that one
area but carries the risk of significant losses in the event of a drop in demand or
increase in the level of competition.

 Multisegmented approach
 A marketing strategy when a company tries to gain customers from more than one type
of market for the same product and uses, therefore, different types advertising, which
can be costly. also called differentiated marketing.

 Niche marketing
 A niche market is the subset of the market on which a specific product is focused. The
market niche defines the product features aimed at satisfying specific market needs, as
well as the price range, production quality and the demographics that it is intended to
target. It is also a small market segment.

Nature of Accounting
 The recording, measurement and interpretation of financial information.

Accounting
 Accountants usually have additional training that allow them to record, understand,
interpret, and develop sophisticated accounting system.

Bookkeeping
 Bookkeeping is typically limited to the routine, day to day recording of business
transactions.

Depreciation
  A process where the costs of long-lived assets are spread out over the total number of
accounting periods in which they are expected to be used. Depreciating items better
match, the cost of the item to the years the item is used.

Term in accounting

 Assets
 things that are resources owned by a company and which have future economic value
that can be measured and can be expressed in dollars. Examples include cash,
investments, accounts receivable, inventory, supplies, land, buildings, equipment, and
vehicles.

 Liabilities
 are defined as a company's legal financial debts or obligations that arise during the
course of business operations. Recorded on the right side of the balance sheet, liabilities
include loans, accounts payable, mortgages, deferred revenues, and accrued expenses.

 Owner's equity
 often called net assets, is the owners' claim to company assets after all of the liabilities
have been paid off. That is why it is often referred to as net assets. According to the
accounting equation, owner's equity equals total company assets minus total company
liabilities.

 The double-entry
 system of accounting or bookkeeping means that for every business transaction,
amounts must be recorded in a minimum of two accounts. The double-entry system also
requires that for all transactions, the amounts entered as debits must be equal to the
amounts entered as credits.

Accounting information to manager

 Managers also use accounting statements to report the business’s financial performance
to outsiders. Such statements are used for filing income taxes, obtaining credit from
lenders, and reporting results to the firm’s stockholders. They become the basis for the
information provided in the official corporate annual report, a summary of the firm’s
financial information, products, and growth plans for owners and potential investors.
While frequently presented between slick, glossy covers, the single most important
component of an annual report is the signature of a certified public accountant attesting
that the required financial statements are an accurate reflection of the underlying
financial condition of the firm.

 Financial statements meeting these conditions are termed audited. The primary external
users of audited accounting information are government agencies, stockholders and
potential investors, lenders, suppliers, and employees.

 Financial statements evaluate the return on stockholders’ investments and the overall
quality of the firm’s management team.

 Banks and other lenders look at financial statements to determine a company’s ability
to meet current and future debt obligations if a loan or credit is granted.

 Labour unions and employees use financial statements to establish reasonable

expectations for salary and other benefit requests.