Chapter 1 Finance

Business Environment and SWOT Analysis This includes the company’s resources. Items
covered under this force are profitability indices,
Business
financial performance, balance sheet and income
Is a human activity carried out by the unified efforts
statement, assets, liabilities, net worth, investments,
of different categories of people, to produce wealth
capital expenditures and operating expenses.
through production and distribution of the goods and
services. Production and Operations
Environment This includes all aspects of manufacturing or
The birth, growth and continuous development of operations. Specific items falling under this force are
organization are influenced by a wide range of quality and sources of raw materials, machinery and
variables like employees, customers, suppliers, equipment, production efficiency, service reliability,
producers, competition, etc. technical expertise, production credo, scheduling,
delivery, sales service, maintenance, factory location.
Business Environment
Includes the actors and forces that affect Human Resources 
management’s ability to build and maintain
This aspect pertains to the people in the
successful relationships with customers.
organization. Specifically it include
Internal Environment motivation ,compensation, training development,
promotion, recruitment, selection, placement, hiring
It includes forces affecting operations that are within
policies and procedures, fringe benefits, performance
the control of the company, that is the company is
appraisal, grievance handling mechanisms,
able to manipulate these forces towards the firm
management labor relations.
advantage.
External Environment
The internal environment consists of five(5) equally
powerful forces namely: Consisting of forces that are beyond a company’s
control.
1. Management
2. Marketing • Micro environment- which is close to
3. Finance business and affects its capacity to work is
4. Production and Operations known as Micro Environment
5. Human Resources
• Macro Environment – factors that create
Management opportunities and threats to business units.
This pertains to the organizational setup, including Macro Environment
goals and objectives, organizational structure,
managerial composition, company philosophy, vision, The external environment consists of the powerful
mission, policies, programs, plans, strategies, tactics forces namely:
etc. 1. Economic Environment
2. Socio Cultural Environment
Marketing
3. Politico-legal Environment
This includes the marketing program of the company 4. Technological Environment
covering the basic marketing mix (product, price, 5. Natural Environment
place and promotion). Specific forces falling under
Economic Environment
this force are product quality, packaging, pricing
strategies, intermediaries used, advertising efforts,
public relations, company image and reputation,
distribution channels ,warehousing, discounts and
other sales promotion tools, market segmentation.
This environment includes such forces as balance of
trade, balance of payments, foreign exchange,
import-export situations, competitive situation,
taxation, energy and oil prices, employment, GNP,
GDP, per capita income and other measures of
economic performance.
Socio cultural Environment
This environment pertains to people and their culture.
Examples of forces under this type of external
environment are education, customs and traditions,
religious affiliations, perception ,cultural values,
demography, ethnic and racial diversity.
Politico-legal Environment
Politico pertains to government while legal pertains to
law. This environment includes legislation regulating
business, legal restrictions, elections, political
stability, presidency, peace and order situations,
armed forces etc.
Technological Environment
This refers to the advancement of science and
technology and includes new inventions or
discoveries, technological breakthroughs, research
and development, information technology, scientific
experiments.
Natural Environment
This includes typhoon, earthquakes, the El Nino, La
Nina phenomena, climate change, global warming,
Ozone depletion, deforestation, preservation and
extinction of animal species.
Micro Environment
Suppliers
Are those who supply the inputs like raw material and
components to the company.
Customers
Success of a business depends upon identifying
customers, their needs, likes, etc. Enhancing the
level of customer satisfaction.
Competitors
Mans other business units which are marketing and
other producing similar products or a very close
substitutes of a product. Business has to adjust its
various activities according to the action and
reactions of competitors.
SWOT
Strength
Something that a company is good at doing. It is a
quality that produces a competitive advantage for the
company. A characteristic is said to be a strength if
its belongs to the internal environment is expected to
affect company operations in a positive manner.
 Cheap and abundant raw materials
 Sufficient funds
 Availability of technology
 Presence of skilled workers
 Management and technical expertise of the
entrepreneur
 Good quality/service
Weaknesses
The opposite of strength. Something that a c
company lacks. It is a quality that puts the company
at a disadvantage. A quality is said to be a weakness
if it belongs to the internal environment and has a
detrimental effect on company operations.
 High price
 Poor quality/service
 Weak management
 Lack of skilled workers
 Irregular supply
 Unattractive design
 High costs of production
Opportunity
A factor in the external environment that is expected
to work favorably towards company operations.
 Big demand for the product/service
 Favorable government policy/support
 Scarcity of the product/service
 Poor quality of existing product
 Absence of product or service
 Possibilities of good profits
Threat
A factor in the external environment that is expected
to have a negative effect on company operations.
 Shortage of raw materials at a given time
 Entry of many competitors
 Increasing costs of production
 Expectation of unfavorable government laws
such as taxes
 Deteriorating peace and order
  Emergence of unfair demands of workers
through labor union activities

Chapter 2

Nature and Concept of Management

Management - it is a process of planning, organizing,

Managers should be the leaders
leading and controlling a group of people to accomplish
goals Leaders do not mean that they are the managers
Efficiency – more output from given input; minimizing
resource costs; “doing things right”

Effectiveness – completing activities to attain goals;

“doing the right things.”

Urwick and Gullick

POSDCoRB – Planning, Organizing, Staffing,

Directing, Coordinating, Reporting and Budgeting
Planning – decision making process, setting goals
Organizing – determination and grouping of
activities, defining roles and responsibilities
Staffing – determining right people for the right job
Leading – providing leadership, coordinating efforts
Controlling – verifying actual executions to plans
 usually ends up with inconsistent results. The
strength of this manager is his or her ability to make
people feel at ease when he or she is around since
listening to others is second nature to him or her.
The Presumptuous Manager thinks only of himself,
This type of manager is not a team player and
usually works for personal gain or interest. He or she
breeds unhealthy competition instead of cooperation
and teamwork. This type of manager is characterized
as being too proud and overconfident and has the
tendency to compete with the members of the team.
The Perfect Manager is open to change and
personal grollth. However, he or she can be very
mechanical and may lack the interpersonal skills to
interact more closely with his or her team members.
He or she just concentrates on facts and figures, for
example, about the product or seme being offered.
The Passive Manager wants to please everyone
and make the team members happy, However, being
a crowd pleaser becomes a hindrance because of his
or her lack of drive and assertiveness to manage the
team. This type of manager is described as very
timid in his or her approach to avoid any
confrontation with anyone especially from the
members of his or her team.

The Proactive Manager possesses the good

Chapter 3
qualities of the other types of managers. He or she
The Manager has the drive of the problem-solving manager to
spearhead solutions, the persistence of the pitchfork
“The conventional definition of management is manager, the enthusiasm of the pontificating
getting work done through people, but real manager, the confidence of the presumptuous
management is developing people through work” manager, the passion of the perfect manager for
- Agha Hasan Abedi continued growth, and the desire of the passive
The Problem-solving Manager focuses on manager to serve.
providing solutions to every problem of the company.
This manager also concentrates on achieving the
company's goals. However, managers of this type
sometimes tend to overdo the task of solving every
problem which affects his or her overall performance.
The Pitchfork Manager threatens employees to
work towards a goal This manager employs fear
tactics and uses an "iron hand" to push employees
for results to avoid consequences, He or she is
characterized as tough and rude.
The Pontificating Manager neither follows any
strategy nor prepares for any situation or task and
Planning is the management function wherein
managers identify and select the company’s goals
and determine the corresponding courses of action in
order to achieve them. As planners, managers aim to
improve the company’s overall performance by
formulating strategies to be implemented.
Organizing refers to structuring the business
organization in such a way that employees are
grouped together to perform jobs or tasks. The
organization ensures that the employees are able to Steps of Ethical D.M Process
perform efficiently and coordinate effectively to
Step 1: Identify the Ethical Issues.
achieve the company’s goals. Each group of
employees is assigned a manager who oversees the Step-2: Collect the relevant information.
employees as they perform their assigned tasks.
Step-3: Evaluates the Information.
In leading, managers help the company achieve its
objectives by motivating their subordinates to Step-4: Generate the possible actions.
perform the tasks assigned to them. Managers Step-5: Consider the Effective Alternatives.
encourage the employees to live up to the company’s
vision in their job performance. They also ensure the Step-6: Make the Decisions.
employee’s commitment to the organization.
Step-7: Take Actions or Implement.
Controlling requires managers to identify any
Step-8: Review the Actions.
deviations from the strategies and methods used in
attaining the company’s objectives. The manager,
then, implements corrective actions to maintain or
improve performance.

Chapter 4
Ethical Decision Making
Ethics – the discipline dealing with what is good and
bad and with moral duty and obligation. With a difficult problem/decision to make, one head
may not be enough —Matthew Lipman, Philosophy
For Children.

*Please note that not being malicious does not

necessarily mean that someone is acting with good
intentions; it is possible that no intentions were
present. It is also possible that even if no harm was
caused there may not have been any beneficial
consequences either.

These three considerations are called the ‘Three
heads are better than one’ and it is suggested that
each ‘head’ may be beautiful or ugly. In other words,
each criteria has a positive and a negative aspect.
Therefore, if you think a statement is false, malicious
and harmful (all red), it is clearly wrong for one to say
(or do) it. On the other hand, if a statement is true,
not malicious and not harmful (all green), it is
permissible to say (or do) it. However, if any action
under consideration has a combination of green and
red then the action or decision may require further
thinking. One could not definitely say that it is
absolutely the right or wrong thing to say or do.
Chapter 5
Communication
Study Question 1: What is the communication
process?
 Communication.
 An interpersonal process of sending
and receiving symbols with messages
attached to them.
 Key elements of the communication process:
 Sender.
 Message.
 Communication channel.
 Receiver.
 Interpreted meaning.
 Feedback.
Figure 17.1 The interactive two-way process of
interpersonal communication.
 Effective and efficient communication:
 Effective communication
o Occurs when the intended
meaning of the sender is identical
to the interpreted meaning of the
receiver.
 Efficient communication
o Occurs at a minimum resource
cost.
 Potential trade-offs between effectiveness
and efficiency must be recognized.
 Persuasion and credibility in communication.
 Communication is used for sharing
information and influencing other people.
 Persuasion is getting someone else to
support the message being presented.
 Horizontal structures and empowerment
are important contexts for persuasion.
 Persuasion and credibility in communication
 Expert power and referent power are
essential for persuasion.
 Credibility involves trust, respect, and
integrity in the eyes of others.
 Credibility can be built through expertise
and relationships.
 Sources of noise in communication:
 Poor choice of channels.
 Poor written or oral expression.
 Failure to recognize nonverbal signals.
 Physical distractions.
 Status effects.
 Poor choice of channels.
 Choose the channel that works best.
 Written channels work for messages that:
o Are simple and easy to convey.
 o Require extensive dissemination
quickly.
o Convey formal policy or
authoritative directives.
 Spoken channels work best for messages
that:
o Are complex or difficult to convey
where immediate feedback is
needed.
o Attempt to create a supportive,
even inspirational, climate.
 Guidelines for making oral presentations:
 Be prepared.
 Set the right tone.
 Sequence points.
 Support your points.
 Accent the presentation.
 Add the right amount of polish.
 Check your technology.
 Don’t bet on the Internet.
 Be professional.
 Failure to recognize nonverbal signals.
 Nonverbal communication takes place
through gestures, facial expressions,
body posture, eye contact, and use of
interpersonal space.
 Mixed messages occur when a person’s
words and nonverbal signals
communicate different things.
 The growing use of communication
technologies causes important nonverbal
communication to be lost.
 Physical distractions.
 Include interruptions from telephone calls,
drop-in visitors, a lack of privacy, etc.
 Can interfere with the effectiveness of a
communication attempt.
 Can be avoided or at least minimized
through proper planning.
Study Question 2: How can communication be
improved?
 Active listening.
 The process of taking action to help
someone say exactly what he or she
really means.
 Rules for active listening:
 Listen for message content.
 Listen for feelings.
 Respond to feelings.
 Note all cues, verbal and nonverbal.
 Paraphrase and restate.
 Ten steps for good listening:
 Stop talking.
 Put the other person at ease.
 Show that you want to listen.
 Remove any potential distractions.
 Empathize with the other person.
 Don’t respond too quickly; be patient.
 Don’t get mad; hold your temper.
 Go easy on argument and criticism.
 Ask questions.
 Stop talking.
 Feedback.
 The process of telling others how you
feel about something they did or said,
or about the situation in general.
 Constructive feedback guidelines:
 Give it directly.
 Make it specific.
 Give it when the receiver is
willing/able to accept it.
 Make sure it is valid.
 Give it in small doses.
 Use of communication channels.
 Channel richness is the capacity of a
communication channel to carry
information in an effective manner.
o Low channel richness is
impersonal, one-way, and fast.
o High channel richness is personal,
two-way, and slow.
 Managers need to choose a channel
with the appropriate richness for the
communication.
Figure 17.2 Channel richness and the use of
communication media.
 Ways to keep communication channels open
through interactive management.
 Management by wandering around
(MBWA).
 Open office hours.
 Regular employee group meetings.
 Computer-mediated meetings and
video conferences.
 Employee advisory councils.
 Communication consultants.
 360-degree feedback.

 Valuing culture and diversity.

 Ethnocentrism is the tendency to
consider one’s culture superior to any
and all others.
 Ethnocentrism can cause people to:
o Not listen to others.
o Address or speak to others in
ways that alienate them.
o Use inappropriate stereotypes in
dealing with someone from
another culture.