Major Course:

Course code Course name Book name Writer name

Hrm 301 Human Resource Human Resource Gary Dessler,

Management Management
Biju Varkkey

Hrm 302 Compensation Compensation Milovich, Newman,

Management Ratman

Hrm 303 Organizational Organizational Robbins judge

Behavior behavior

Hrm 304 Training and Employee Training Raymond A. Noe

Development and Development
Management

Hrm 401 Organization Structure Organization Theory Stephen P. Robbins

and Design (Structure, Design and
Application)

Hrm 402 Unionism and Labor Relations and Michael R. Carreell,

Collective Bargaining Collective Bargaining Christina Heavrin

Core Course:
FIN 301 -BUSINESS FINANCE

MKT 301 - MARKETING MANAGEMENT

BUS 101 - INTRODUCTION TO BUSINESS

ACC 101- Financial Accounting

HRM-301
1. Define HRM:
HRM is the practice of placing the right person, at the right time, at the right job/position. It is
the process of managing employees in a company through recruiting, hiring, training, appraising,
rewarding.
2. Define Management process:
Management process is the five basic functions of planning, organizing, staffing, leading, and
controlling.
3. Components of HRM:
 Recruiting
 Selection
 Training
 Performance appraisal
 Compensation management
4. What are the HR Manager’s / Manager’s work?
 Determining the nature of each employee’s job
 Planning labor needs
 Recruiting job candidates
 Selecting job candidates
 Orienting new employees
 Training new employees
 Compensating new employees
 Providing incentives and benefits
 Appraising performance
5. Define line manager: Line managers have the final responsibility for achieving the
organization’s goals. They also have the authority to direct the work of subordinates.
6. Define staff manager: Staff managers usually help and advice line managers in achieving
organizational goals. HR managers are staff experts.
Compensation: Compensation is the total cash and non-cash payment that an employer gives to
an employee in exchange for the work they do for the organization.
Under compensation holidays, salary, bonus, leave, insurance, transportation facility etc. are
included.

Two types of compensation:

1. Monetary (Financial):
 Basic pay
 House rent.
 Medical allowances
 Over time payment
 Bonuses etc.
2. Non-monetary(non-financial)
 Vacations
 Leaves
 Security
 Transportation facility etc.
Job analysis: Job analysis is a process for determining the duties, skill requirements of a job and
the kind of person who should be hired for it.
Job description: Job description is a list of duties, responsibilities of a position.
What is Organizational Behavior (OB)?
OB “(takes a micro view) emphasizing only what is happening within the organization.
Influencing individuals or small group of people’s behaviors inside the organization. Focusing
employee’s performance, behavior, and attitude inside the organization.
What is Training?
The process of teaching employees the skill what they need to perform their job properly.
What is organizational Structure?
How tasks are to be allocated, which employee does what types of works, who reports to whom
this thing are included in the organizational structure.

Strategic Human resource management: The linking of HRM with strategic goals and
objectives in order to improve business performance and develop organizational cultures that
increase innovation.
Job analysis: Collect and examine information about jobs. Also identify what skills required for
the specific position and what types of duties employees must perform after joining.
Job Description: List of job duties, responsibilities, reporting relationship this are included in
job description.
Job Specification: For a specific position what types of educational background, skills,
capability, behavior required.
Performance appraisal: Performance appraisal is a systematic and periodic process that assess
an individual employee’s performance which was fixed before. After a certain period of time like
after 1 year authority match the pre-established performance with recent performance.
Recruitment: It’s a process of finding candidates for the vacant position.
Selection: Selection best one from the candidates.
Difference between recruiting and selection:
Screening process:

Recruiting and selection process:

Employment
Applicants completes
Candidates and
planning
RCRUITING: build a
forecasting application forms.
pool of candidates.

Use selection tools like

Supervisor and others Candidates/s
test to screen out most
interview final become
applicants.
candidates to make employees.
final choice.

Job Enlargement: Increasing the number of works or adding duties in the daily activities of an
employee.
Job enrichment: position and responsibility will grow up. Adding responsibly, scope and
challenges.
Job rotation: Moving an employee or trainee one department to another department.
Exit Interview: This type of interview happening when an employee leaves the organization.
Authority conducts the interview for finding out reason for leaving the organization, about their
experience, also asking about the goo d side and bad side of the organization.
On the job training: Employees learning their work by doing their work.
Of the job training: It is the training method where the workers/employees learn their job roles
away from the actual work floor. Like organization give them training then allow them to do
their work.
Managing involve 5 functions which called management process:
 Planning
 organizing
 Staffing
 Leading
 Controlling
Employee relation: It is the activity that involves establishing and maintain positive employee
and employer relationship that contribute to satisfactory productivity, motivation, moral,
discipline and maintain a positive, productive, and cohesive work environment.
NLRB: National labor Relationship Board.
Collective bargaining: The process through which representatives of management and union
meet to negotiate a labor agreement.
The three major responsibility of HRM:
 Attracting a quality workforce
 Developing a quality workforce
 Maintaining a quality workforce
360-degree feedback: Assesses employees’ performance from five point of view
 Supervisor
 Peers
 Self
 Customer
 subordinates

Human Resource Functions

1. HR Planning

2. Job Analysis

3. Recruitment

4. Selection

5. Training and development

6. Performance Appraisal

7. Equal Employment Opportunity

8. Compensation and Benefits

9. Health and Safety Measure

1
Hr Planning
- Process of determining organization’s human resource needs
- identifies current and future human resources needs for an organization -
anticipates vacancy arising due to promotion, transfer, retirement
2
Job Analysis
-gather and analyze information about the content and human requirements of jobs, the context
in which job are performed
- determining the duties and skill requirements of a job and the kind of person who should be
hired for it
Types of Information Collected

 Work activities (task and duties)

 Human behaviors (Air hostage)

 Machines, tools, equipment, and work aids

 Performance standards (telling what the job accomplishes and how performance is measured)
Salespeople - Target

 Job context (The environment in which job is performed)

 Human requirements

Job description
-Indicates the task, duties, and responsibilities of job
List of
- Duties and responsibilities

- reporting relationship

- working condition
Job Specification
-List the knowledge, skills and abilities (KSAOs) an individual need to perform
Human requirements (List)
-Requisite education
-skills and experiences
- Personality and etc
Steps in Job Analysis Step
1: Decide how you’ll use the information.
Step 2: Review relevant background information.
Step 3: Select representative positions.
Step 4: Actually, analyze the job.
Step 5: Verify the job analysis information.
Step 6: Develop a job description and job specification.
Job Analysis Methods
- observation method

- individual interview method

- group interview method

- structured questionnaire method

- technical conference method

Job enlargement
-extend the range of activities at the same level
Job enrichment
-Redesigning jobs in a way that increases the employee’s feelings of recognition and
achievement
-more challenging work to the employee
Job rotation
-systematic movement of employees from one job to another within the organization
3
Recruitment
-the process of seeking sources for job candidates
-sourcing the candidates
-attracting candidates to apply for the job
-discovering of potential applicants for actual or anticipated organisational vacancies -
find and attract best qualified applicants to fill vacancies
4
Selection
-Placing the right person in the right job
-choosing the best applicant to fill a position

Selection Process
1. initial screening

2. preliminary interview

3. written test

4. viva

5. Selection

Or,
(1) Initial screening interview,

(2) Completion of the application form,

(3) Pre-employment tests,

(4) Comprehensive interview,

(5) Background investigation, (6) Medical or physical examination,

(7) Permanent job offers.

Training and development

Employee Orientation
– Planned introduction of new employees to their jobs, co-workers and the organization
-Giving ideas, philosophy and information
-welcoming
Training
-teaching employees how to do specific task
-facilitate employees’ learning of job-related competencies
On-the-Job Training
-direct instructions to perform the jobs on the actual work floor
Coaching- senior gives instructions to the workers to perform a job.
Job Rotation- employee is shifted to the other related jobs.
Apprenticeship Training- work under the experts for a longer period
Job Instructional Training (JIT)- trainer designs a step-by-step training program.
Plan----Present----Trial----Follow up
Understudy- senior gives training to subordinate as an assistant who is likely to perform a
senior’s job in case of the vacancy.

Off-the-Job Training
-learn the job roles away from the actual work floor
Lectures (classroom training) - given lectures about the job requirements and the necessary
Simulation- learns to operate tools and machinery that look like those in the actual work.
Case Studies- given the situation in the form of a case study.
Vestibule Training- use of actual machine on dummies such as doctor or dentist

Training and Development Process

Needs analysis – Identify job performance skills needed, assess prospective trainee’s skills
Instructional design – Produce the training program content, including workbooks, exercises
Validation – Presenting (trying out) the training to a small representative audience.
Implement the program – Actually training the targeted employee group Evaluation –
Assesses the program’s successes or failure.
Management Development
-Process of developing selected personnel so that they have Knowledge, skills, abilities needed
to manage future position
-Concerned with growth of employees in all aspects
6
Performance Appraisal
-Evaluating how well employees perform the job when compared to set up standard and
communicating that information to those employees Steps
- Define the job (setting target, duties)

- Apprising performance (Comparing)

- Providing Feedback What to Measure?

– Work output (quality and quantity)

– Personal competencies

– Goal (objective) achievement

How to measure?
Graphic Rating Scale – List traits and rate on individual
Alteration Ranking Method- ranking employees from best to worst on a trait.
Paired Comparison method- each employee is compared with all other in pairs.
Management by objectives- Objective that each manager set are derived from overall goal 360
Degree Performance Appraisals (‘multi-rater feedback’) - the comment about the employees’
performance comes from all the possible sources.

7
Equal employment Opportunity - ensure the practice of being fair in the employment process.
Performance Appraisal
Workforce diversity - similarities and differences among employees in terms of age, cultural
background, physical abilities and disabilities, race, religion, gender
Diversity management – Removing barriers and allowing to have equal access.
Glass ceiling – invisible barrier that blocks females and minorities from ascending into upper
levels of an organization.

8
Compensation and benefits
-concerned with paying employees and administering benefits package
- Money received in the performance of work, plus the many kinds of benefits and services that
organization provides their employee
Various modes of compensation
Wages and Salary- Wages represent hourly rates of pay and salary refers to monthly rate of pay
Incentives
-payment by results
-paid in addition to wages and salaries
-paid for outstanding performance

Fringe Benefits- given to employees in the form of benefits such as provident fund, gratuity,
medical care, hospitalization, accident relief, health insurance, canteen, uniform etc. Non-
Monetary Benefits- include recognition of merit, comfortable working condition, and
flextime.
Rewards
Intrinsic rewards - personal satisfactions one derives from doing the job.
Extrinsic rewards - money, promotions, and benefits
9
Health and safety measures
-identification of hazardous condition, exposure control and Provide training for safety
---------------------------------------------------------------------------------------------------------------------
---------- Strategic human resource management
- Aligning HR policies and decisions with the organizational strategy

- Connection between the goals of the organization and the activities of the people Human
resource information system (HRIS) - computerized system that assists in the processing
of HRM information.
Downsizing - eliminate certain jobs for creating greater efficiency.
Rightsizing - linking staffing levels to organizational goals.
Off shoring - moving jobs out of one country and into another country.
Ethics - A set of rules or principles that defines right and wrong conduct.
Code of ethics - formal document that states organization’s primary values, ethical rules
Labor union
-Acts on behalf of its members
-assist workers in dealing with the management of an organization
-secure wages, hours, and other terms and conditions of employment
Outsourcing- Contracting with a company to handle one or more HR functions.

Maslow’s Needs Hierarchy

McGregor’s Theory X and Theory Y
Theory X
Managerial assumptions
• Employees dislike work, dislike responsibility
• Must be closely directed.

Theory Y
Managerial Assumption
• Employee like challenged, enjoy work.
Ouchi’s Theory Z
Characteristics of US and Japanese Management
• lifetime employment
• Individual responsibility
• Promotion
• Opportunity to use skills.
Herzberg’s two- factor model
Hygiene Factor – essential to job satisfaction
Salary, job security, working condition, status.
Motivator Factor- Contributes to job satisfaction.
Achievement, recognition, growth opportunities

HRM-304
Which step in training design model is the least important?
Based on systematic training Design-(organization, task & person analysis): “Selecting
Training Method”
Which step in training design model is the most important?
“Conducting Needs assessment.”
70 20 10 model (70 for experience 20 from social interactions 10 from academic)
TNA = Training Needs Assessment
(I cannot do= I have no skill to do it), (I will not do= I don’t have motivation), (Self-efficacy= It
means self-confident.), (KSAOs= Knowledge Skill Ability & other).

Needs Assessment: Needs assessment refers to the process used to determine whether training is
necessary.

Why needs assessment: Training maybe incorrectly used, it has wrong content, objectives,
methods.

Staffing strategy and training

Club/Monopoly: No other people can do that business, like bd railway business can do only bd
govt. I am promoting from within, no outside people will higher. Group contribution.
Monopoly business is highly regulated by government.

Training strategy- job rotation, special assignment, project work.

Fortress: When profit margin goes down that time, we should go for it & higher from external
labor market. Job rotation-Group.

Baseball Team: cannot keep any employee more than 3 years. High individual contribution,
Higher from external. Always need trained people.

Academy staffing: Individual, higher from within, job rotation.

Over learning: Learn more and more. Repeating learning.

Career: A sequence of positions held within an occupation.

Boundaryless Career: I identify more with the job and my profession rather than who is given
me the money.

Protean Career: Protean career is a non-traditional career; I decide where I want to develop
myself and where I want to go.

Protégé: New employee, junior employee, follower, etc.

Mentoring: Senior manager is considering a mentor to junior employee.

Motor skills: Coordination of physical movements.

Close skill: Involve responding to predictable situation with standardized responses.

Open skill: Involve responding to variable situations with adaptive responses.

Job hoping: Hoping from work to another work, it is a challenge for the employer. Bad for
company good for employee.

Dynamic learning: Effective learning

Adult learning: It is for varsity student and job holder with long experience.

Blended learning: Combination of traditional and technology-based learning together.

Food for thought: Providing logistics for thinking.

On the job training: Learning by sight. Learning work from your workplace like your peers,
colleague, etc.

Big picture: Looking the organization all activities.

Fan type seating: Trainees can easily switch from listening to practicing in groups.

Classroom type seating: Appropriate when lecture and audiovisual presentations are the
primary methods.

Conference-type seating: Appropriate for total groups discussions (with no small group
interaction).

Horseshoe type-seating: Appropriate for both presentation and total group instruction.

Near transfer refers to applying learned capabilities exactly as taught in training.

Far transfer refers to applying learned capabilities to a work environment that is not identical to
training.

Pressure point: Legislation, lack of basic skills, poor performance, new technology, customer
requests, customer dissatisfaction, new products and innovations, higher performance standards.

HRM: 401
How tasks are to be allocated, which employee does what types of works, who reports to whom
this thing are included in the organizational structure.
Organization structure has three components: Complexity, Formalization, Centralization.
Organization design is concerned with constructing and changing an organization’s structure to
achieve the organization’s goals.
Organization life cycle:
 Entrepreneur Stage
 Collective
 Formalization and control
 Elaboration of structure
 Decline
Ends: which result organization get
Means: way of reaching to result.
Horizontal and vertical differentiation
Strategy: long term plan of an organization.
The environment is everything outside an organization’s boundaries.
If organization unique:
Organizations are like fingerprints. Each has its own unique structure. Coca-Cola and PepsiCo,
for instance, are both large corporations that derive most of their income from soft drinks. But a
careful review of their organizations finds that their structures are not identical clones of each
other. There certainly are not millions of different forms or configurations. Like fingerprints,
many have common elements that, once identified, allow for the development of a classification
framework.
Why managers try to control the environment?
– They do not like uncertainties.
– They do not like depending on other organizations.
– They want an autonomous and predictable environment.
Conflict: conflict arise when there is a variation of hierarchy or someone disagree someone else
work or opinion.
Heterogeneity: bringing people from different background for making conflict.
Organization design: changing the organization structure.
Role requirement: how an employee doing the work. What that employee should do
Corporate: segmented business into different part. Like food, electronics, plastic.
Business level business: segmented one business inti different part. Like dividing plastic
business into box, plate, spoon etc.
Organic structure: flexible organization, decentralization, there is no fixed rules and regulation
for making decision.
 HRM 402
1. Labor relations:
Any activity between management and unions or employees concerning the negotiation or
implementation of a collective bargaining agreement.
2. Labor unions?
An organization of workers dedicated to protecting their interests in the workplace and
improving wages, hours, and working conditions.
3. Collective bargaining agreement:
A written and signed document between an employer entity and a labor organization specifying
the terms and conditions of employment for a specified period of time.
3. Why an employee Join a Union?
 For job security
 For getting Wages and benefits properly
 For getting better working conditions
 For getting Fair and just supervision
4. Types of unions?
 Craft unions
 Industrial unions
 Agricultural workers unions
 Transportations unions
5. NLRB = National Labor Relations Board
6. What are the unfair labor practices?
 Interfering with employees’ rights earlier enumerated
 Interfering with the formation or administration of a union
 Discriminating against union members
 Refusing to bargain with employees’ representatives.
7. Salting?
Members are encouraged by their union to seek employment at a nonunion company.
8. RC petition - Filed on behalf of an employee(s) or union to determine support for
representation in collective bargaining (certification)
RM petition - Filed by employer to determine support for representation in collective
bargaining.
RD petition - Filed by employer, employee, or union to determine whether a recognized union
still has employee support (decertification)
9. Open ended question-unlimited question arise from both side’s interest.
close ended- true or false, yes or no-there is no chance for the increase of the question.

Fairness is the quality of making judgments that are free from discrimination.

Equality is about ensuring that every individual has an equal opportunity to make the most of
their lives and talents.

Entrepreneur MGT-401
Merger: A merger is when two separate companies combine with one another to create a
newly formed organization. Like- Disney and Pixar\, robi and airtel.
Acquisition: An acquisition is when one business entity takes over another, usually with the
intent of adding the acquired entity as a subsidiary to its business portfolio. Microsoft and
LinkedIn
 Joint Venture: A joint venture involves two separate entities undertaking a company or
business together, sharing its profit, loss, and control. The venture is maintained as its own
entity, separate from the other parties’ companies’ business interests. Like- Google and
NASA developing Google Earth

Accounting
Particulars Financial Accounting Cost Accounting Managerial Accounting
1. Subject Financial Information Cost Information Managerial Financial
matter Information
2. Nature Past activities Past activities + Past, Present & Future:
some future Planning, Policies,
assumption Decision etc.
3. Accounting Monthly, Quarterly, Half Timely, Product, As per Management
period yearly, Yearly. Services, Job, needs.
Processes
4. Objectives Financial result & Positions Cost determination, Profit Maximization,
Cost Control, Cost Assets utilization.
reduction.
5. Statutory Mandatory Helping Sectors Utilization,
Determination
6. Characteristi Financial Information Cost determination Need for Managerial
cs recording as per elements Decision, Policy Making.
7. Correctness Arithmetical Accuracy Sometimes needs Analysis & Interpretation
Assumption for Planning.
8. Audit Financial audit necessary - Cost audit not Management Audit not
Mandatory Compulsory so popular.
9. Presentation Submitted in the shareholder Analysis of variance, Statement + Description,
meeting cost for executive Report, Statistically
Use presentation.

 Cost Sheet: Cost Sheet is a sheet which contains detail information of costs (product /
service/function for the particular period)

 Statement of Cost: Statement of Cost is a statement contains detail information of costs

(product / service/function for the period)
 M.N. Arora, “Job Costing is the method of cost determination in job order industries.”
BEP (Sales Value) =

The point at which total cost and total revenue are equal, "even". There is no net loss or
gain.
Generally accepted accounting principles (GAAP) are rules that govern the practice of
financial accounting. The goal of GAAP is to ensure that the information generated by financial
accounting is relevant, reliable, consistent, and comparable.
• Formula for Net income= Sales Revenue – cost of goods sold – Expenses
• Conversion costs include direct labor and overhead expenses incurred due to the
transformation of raw materials into finished products.
• The cost of goods sold is the cost of the products that a retailer, distributor, or
manufacturer has sold.
• Opportunity cost is the next best alternative foregone. the loss of other alternatives when
one alternative is chosen.
• direct cost is a price that can be directly tied to the production of specific goods or
services.
• Indirect costs are costs that are not directly accountable to a cost object.
• fixed cost is a cost that does not change with an increase or decrease in the amount of
goods or services produced or sold.
• Variable costs are costs that change as the quantity of the good or service that a business
produces changes.
• Profit margin is a percentage measurement of profit that expresses the amount a
company earns per dollar of sales.
• A sunk cost refers to money that has already been spent and which cannot be recovered.
• CVP analysis help companies determine their contribution margin, which is the amount
remaining from sales revenue after all variable expenses have been deducted.
Difference Between Book-keeping, Accounting, and Auditing
Bookkeepers: Bookkeepers records the transaction in journal or ledger that is bookkeeping &
this the role of bookkeepers. Bookkeepers does not require the knowledge of accounting.
Accountant: Accountant’s roles are record, clarify, summarize and interpret the audit results.
Accountant requires the knowledge of accounting principal.
Auditor: Auditor verify the books of account which is written by bookkeeper & accountant to
find out the accuracy. Finally, auditor must have knowledge of both auditing and accounting.
Objective of auditing: Expression of export opinion, detection & prevention of errors & frauds,
specific objective.

Errors: clerical error {error of omission (partial & complete omission) & error of commission},
error of principal, compensating errors & error of duplication.
Frauds: Embezzlement of cash, misappropriation of goods & fraudulent manipulation of
accounts.
Three persons can’t be appointed as an auditor: An officer or employee of the company. A
person who is partner or who is the employment of an employee of the company. Last one is a
person who is indebted to the company.
There are three main types of audits: external audits, internal audits, and Internal Revenue
Service (IRS) audits
Simply put, fraud is an act that is intentionally carried out to benefit certain individuals or
groups and causes detrimental effect to others, while errors are acts of unintentional mistake or
negligence.
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer by a
governmental organization in order to fund government spending and various public
expenditures.

Economics: Microeconomics is the study of individuals and business decisions,

while macroeconomics looks at the decisions of countries and governments.

Marketing:
What is a product: a product is anything that can be offered to a market that might satisfy a want
or need.
Value chain: A value chain is a set of activities that a firm operating in a specific industry
performs in order to deliver a valuable product for the market.
What is marketing: The action or business of promoting and selling products or services,
including market research and advertising.
A niche market is the subset of the market on which a specific product is focused.
Production Operation Management:
Supply chain: It is a system of people activities, organizations, information’s, delivering goods
and services.
E-Business: E-business is online transactions.
E-commerce: It is consumer to business transaction. That means the business method where
activities are carried out through the online.
Forecasting: A statement about future value of a variable of interest such as demand.
Pull system: If we produce any product according to customers want and need that is call pull
system.
Push system: After producing the product the manufacturer will try to sell it. That is call push
system.
Just in time: We must produce the product only when the customer orders the product.

Strategic management:

PESTEL Analysis - to analyze and monitor the external environment factors - used to identify
threats and weaknesses.
Strategy - plan in order to remain competitive.

Red ocean - bloody battle between competitors and gain any advantage where possible Blue
Ocean - unexplored market space.
Means by which long-term objectives are achieved.

Strategy is where you will focus your efforts to achieve your goals, and how you will succeed—
or “where to play and how to win.” It defines a specific course of action that will take you from
where you are now to where you want to be.
SMART is a well-established tool that you can use to plan and achieve your goals. While there
are a number of interpretations of the acronym's meaning, the most common one is that goals
should be Specific, Measurable, Achievable, Relevant, and Time-bound.
Vision Statement –
What do we want to become?
Mission Statement –
What is our business?
• Mission – Reason for existence – what an organization does
• Vision – Some desired future state
Halo effect is the tendency for positive impressions of a person, company, brand, or product in
one area to positively influence one's opinion or feelings in other areas.
The Ansoff Matrix is a strategic planning tool that provides a framework to help executives,
senior managers, and marketers devise strategies for future growth.
The Boston Consulting group's product portfolio matrix (BCG matrix) is designed to help
with long-term strategic planning, to help a business consider growth opportunities by reviewing
its portfolio of products to decide where to invest, to discontinue or develop products. It's also

known as the Growth/Share Matrix.

 Entrepreneurship
Fatal flaws
It means defective design in business model- 1. misread of the customer – if I don’t understand
the requirement of customer then I can’t make the customer satisfied. 2. unsound economics- my
offering products or services is under good or not good economic condition.

product/market scope- A company’s product/market scope defines the products and markets on
which it will concentrate.
Types of start-up firms
• Innovation
– Is the process of creating something new, which is central to the entrepreneurial
process.
• An opportunity is a favorable set of circumstances that creates a need for a new product,
service, or business.

• Cognitive Factors
– Studies have shown that opportunity recognition may be an innate skill or
cognitive process.
• The Value Chain
– The value chain is the string of activities that moves a product from the raw
material stage, through manufacturing and distribution, and ultimately to the end
user.

• Core Strategy
– The first component of a business model is the core strategy, which describes how
a firm competes relative to its competitors.

– A sole proprietorship is a form of business organization involving one person, and

the person and the business are essentially the same.
– Partnerships
– If two or more people start a business, they must organize as a partnership,
corporation, or limited liability company.
– Profitability
– Is the ability to earn a profit.
 – Liquidity
– Is a company’s ability to meet its short-term financial obligations.
– Efficiency
– Is how productively a firm utilizes its assets relative to its revenue and its profits.
– Stability
– Is the strength and vigor of the firm’s overall financial posture.
– Financial Ratios
– Depict relationships between items on a firm’s financial statements.
– Ratio Analysis
– The same financial ratios used to evaluate a firm’s historical financial statements
should be used to evaluate the pro forma financial statements.
– Bootstrapping
– A third source of seed money for a new venture is referred to as bootstrapping.
– Intellectual Property
– Is any product of human intellect that is intangible but has value in the
marketplace.
Efficiency is defined as the ability to accomplish something with the least amount of wasted
time, money, and effort or competency in performance. Effectiveness is defined as the degree to
which something is successful in producing a desired result; success.
Competitive advantage refers to factors that allow a company to produce goods or services better
or more cheaply than its rivals. These factors allow the productive entity to generate more sales
or superior margins compared to its market rivals.
Emerging Industries
—
Industries in which standard operating procedures have yet to be developed.
— Opportunity: First-mover advantage.
Fragmented Industries
— —
Industries that are characterized by a large number of firms of approximately equal
size.
— Opportunity: Consolidation.-mergers and acquisitions
Mature Industries
—
Industries that are experiencing slow or no increase in demand.
— Opportunities: Process innovation and after-sale service innovation.
—
Declining Industries
—
Industries that are experiencing a reduction in demand.
— Opportunities: Leadership, establishing a niche market, and pursuing a cost reduction
strategy.
 Finance
Finance: the management of large amounts of money, especially by governments or large
companies.
Corporate finance deals with how corporation’s deal with funding sources, capital structing and
investment decision.

Ratio: the quantitative relation between two amounts showing the number of times one value
contains or is contained within the other.
Profit Margin
Equation: (Profit Margin = Net Income / Sales), Total Revenues – Total Expenses = Net Income
Over-funding – produce waste/encourage slack management.

Under-funding – inhibits accomplishments/creates frustration.