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Course Name: Introduction to Business
Objective of studying Introduction to Business:
The world is becoming global increasingly and we are living in the age of business, and the age of modern technology. As a student of Bachelor of Business Administration, we should have good knowledge on business. Basically, this course includes-
Business and its nature, its origin and evolution, forms of business ownerships, business environment, social responsibility and ethics in business, business-law-government, international business, career in business and so on. The main objective of the course is to gather knowledge about the stated aspects and topics of business completely.
Course Instructor : Mahmudul Kabir
: Assistant professor - UODA
: sandhi4mk@yahoo.com
Grading System:
As per the grading system of UGC.
Distribution of marks / Performance Evaluation:
Each course will be marked out of 100. The performance of a student is evaluated on the basis of following guidelines:
Class Tests (Written/Quiz)-- ----- : 05
Attendance & class participation & class behavior : 5
d) Mid Term Examination----------- : 20+10
Class Tests (Written/Quiz)-- ----- : 05
Attendance & class participation & class behavior : 5
e) Final Semester---------------------- : 40+10
------------------------------------------------------------------------------------------------------
Total---------- : 100
Course Outline:
Foundation of business:
Business and its nature, origin and evolution of business, industry, commerce and direct service.
Forms of Business Organizations and ownership:
Sole proprietorship, Partnership, Corporation, merger, entrepreneurship, Franchising and Small business.
Fundamentals of Management:
Definition, objective, functions of management.
Social responsibility and ethics in business.
Definition of social responsibility and ethics, responsibility to employees, to the customers, to the investors, to the environment.
International business.
Nature and scope of international business, barriers to international business.
Issues in environment and globalization.
Introduction to functional and support areas of business – marketing, production, finance, human resource, accounting.
Business law/ Law & Regulation for forming Business.
Business Environment.
Marketing
Definition of marketing, market, consumer market, industrial market,
Market segmentation, target market, market segmentation process, positioning,
Marketing mix, consumer buying behavior, marketing research.
Finance
Definition of finance, sources of funds, types of fund, characteristics of different types of funds.
Accounting
Definition of accounting, accounting cycle, accounting equation.
Text Book:
Business For The 21st century - SKINNER
Course Contents:
Lecture-1
Key Word: Legality, Risk, Uncertainty, Transaction, Flexibility.
Foundation of Business and Economics
Q. 1 What is Business? Answer: Business means being busy. Business is a process of producing and exchanging goods and services with a view to make profit. Business activities must be legal and economic activities. In a business there is a good chance of making profit as well as suffering by loss. So Risk is a very vital issue related in business.
So we can say that business is the exchange of goods, services, or money for mutual benefit or profit. According to B.B. Ghosh - “Business denotes human activities which produce or acquire wealth through buying or selling of goods”
Q. 2 Explain the basic characteristics of business.
Answer: Business has some basic characteristics. Such as-
Expectation of profit: A business organization must have the expectation of profit.
F.H. Knight says “Profit is reward for bearing risk and uncertainty”. Any activity without the expectation of profit is not considered as business.
Legality: Business activities must be legal. If someone earns profit through the illegal activities, it is not called business. That is why, smuggling is not called business.
Risk and uncertainty: It is said in the business world that “no risks no gains”. A businessperson has to bear risk and uncertainty.
Finance: Money is called the life blood of a business. Every organization, large or small, needs finance. At first, the owner invests his or her own funds. He can collect money from many sources.
Recurring transaction: A business is concerned with the recurring of transaction. In a business organization, same type of transaction occurs again and again. In such a way, a business man tries to maximize his profit.
Intention of sale: In order to involve in a business, a man must have an intention to sell the goods or services that are produced or purchased earlier. If we purchase something for our own consumption, it will not be considered as business.
Freedom of work: From the very beginning, business is taken by the people who want to work independently.
Creating utility and making surplus: One of the main characteristics of business is to create utility. A business creates different types of utilities and meets the demand of people. By doing this, it makes the surplus of wealth.
Flexibility: The activities which are related to business are very much flexible in nature. “To adopt your organization according to your situation” is a precondition of a successful business.
Service motive: Business organization is a service oriented organization. It has a lot of responsibilities to the different categories of people in the society for their well being.
Questions:
What is business?
Explain the basic characteristics of business
Lecture-2
Key Word: Survival, Growth, Responsibilities, Economic Profit.
Q. Explain how people form the core of business.
Answer: The human element is the core of business. Business needs people as-
Owners,
Managers,
Employees, and
Consumers.
People need business for the production of goods and services and the creation of jobs. Business may be operated differently and the objectives of businesses may differ, but the universal element in all business activities is people.
Q. What are the objectives of businesses?
Answer: List of business objectives generally include such factors as profit, survival, growth and social responsibility.
Survival is an obvious objective. Other objectives can be accomplished only if the business enterprise survives.
Growth is an objective because business does not stand still. Market share increase, personal and individual development, and increased productivity are important growth objectives.
Meeting social responsibilities has been recognized as an important objective. Businesses, like each person in society, must accept their responsibilities in areas such as pollution control, eliminating discriminatory practices, and energy conservation.
Profit objective plays the major role in business. Profit means different things to different people because of their values, attitudes, and perceptions.
Two views of profit-
Business profit and
Economic profit.
The difference between business income (revenue) and business expenses (costs). Economic profit is what remains after both actual expenses and opportunity costs are subtracted from revenue earned.
Questions
Explain how people form the core of business.
What are the objectives of businesses
Lecture- 3
Key Word: Consumption, Distribution, Resources, Command economy.
Q. How economics is the foundation of business?
Answer: Economics is the study of how a society (people) chooses to use scares resources to produce goods and services and to distribute them to people for consumption.
This definition raises certain issues that are keys to understand economics, such as
1.resources (natural, capital, and labor),
2. Goods & services,
3. Allocation of both resources and products.
So understanding economics is essential to understand business.
Q. What is economic is economic system?
Answer: An economic system is a mechanism that deals with the production, distribution and consumption of goods and services.
Q. Discuss the different types of economic system.
Answer: There are three types of economic systems.
Market Economy: A market economy encourages open exchange of goods and services between producers and consumers. Individuals, rather than government, make the majority of economic decisions in a system.
Command Economy: In a command economy, all dimensions of economic activity are determined by a central government plan. It describes the economic system whereby the government controls all resources. Hence, the government commands the authority to decide what goods and services a country will produce, the quantity in which they are produced and the price at which they are sold.
Mixed Economy: A mixed economic system combines elements of the market and command economic systems, whereby the government and private enterprise influence production, consumption, investment and savings. In which economic decisions are largely market driven and ownership a largely private, but the government intervenes in private economic decisions.
Questions of this chapter:
1. How economics is the foundation of business?
2. What is economic system? Discuss the different types of economic system.
Lecture-4
Key Word: Proprietorship, Enterprise, Alliances, Cooperatives, Secrecy, Participation.
Forms of Business Ownership
A business can be formed under the following ownership:
Sole proprietorships
Partnership
Join Stock Company
Cooperatives
State Enterprise
Business Alliances
Sole Proprietorships:
The oldest, most common form of private business ownership in the business world is the sole proprietorship. A sole proprietorship is a business owned and managed by one individual. The person may receive help from others in operating the business but he is the only boss.
Basically, the sole proprietor owns a small service or retail operation, such as bakery, grocer’s shop, a restaurant, hardware store and so. The sole owner operates a small shop that frequently serves to a group of regular customers. The capital or money needed to start and operate the business is normally provided by owner from his personal wealth. He can also borrow money from others.
James Stephenson says, “A sole trader is a person who carries on business exclusively by and for himself”.
R. M. Hodgetts states, “A sole proprietorship is a business that is owned and controlled by a single individual.”
Generally, the sole proprietor is an active manager. He works in the shop every day. He controls the whole operations; he supervises the employees and finally makes the decisions. The success or failure of the business depends on the managerial ability of the owner.
Advantages of a Sole Proprietorship:
Many people desire to be their own boss. A sole proprietorship accomplishes this goal; it has other advantages as well.
Ease of Starting:
Sole proprietorship is a business that can be started by anyone in the easiest way. Because it involves a minimum number of formality. Ratan wants to start a grocery in his locality, he can start easily. He decides that a sole proprietorship is the best form for his needs. No general laws can prohibit Ratan from starting the grocery, but his business operation must be legal.
Use of owner’s abilities:
The owner has to take the risk of loss and he has a chance of gaining from her efforts. The owner can use all of his abilities, like time, energy, knowledge and experience or managerial abilities, to make profit. So full credit for success or blame for failure belongs to the owner.
Full control on business:
The owner of a sole proprietorship contains the total control over the daily operations and decisions. The employees who work in the business must follow the direction of the owner.
Sole participation in profits and losses:
The owner is responsible for all profits earned or losses incurred in this business organization. But in the partnership firm, the partners share profits and losses. Here, the owner can take a help of others to operate the business, but others can not take the responsibilities of profits or losses.
Tax breaks:
A major advantage of the proprietorship is that the business pays no income tax. A corporation pays taxes on profits. The shareholders also pay taxes on their dividends.
Secrecy:
If the owner wants, he can not express the information that is related to the business. Information such as special formula for delicious food items should not be shared by others, if the owners want to make high profit. So a sole proprietor can maintain secrecy for his own benefits.
Ease of dissolving:
If the owner decides to dissolve his business for any reason, there is no legal complication. When he wishes, he can close the business. He can do it freely.
Taking quick decision:
The owner can take any decision very quickly that is good for his business. Because, there is no need to consult with others.
Achieving economy and eliminating wastage:
Since all operations are directly observed by the owner, it is possible to achieve economy and eliminate wastage in all stages of business.
10.Direct relation between the employer and the employees:There is a direct relation between the employer and the employees. So both of them try to improve the position of the business.
Disadvantages of a Sole Proprietorship:
Sole proprietorship does not enjoy advantages, it has disadvantages too. These are as follows:
Unlimited liability:
The owner’s liability in this type of business is unlimited. If the assets of business are not sufficient to meet the claims of creditors or to pay debts, investor or owner is bound to pay all liabilities by his personal assets. So this is the major disadvantage of it.
Difficult of raising capital:
Generally, the business requires small amounts of capital. If it requires large amounts of money, the investor is not able to provide it. Because, his personal wealth is limited and he can hardly borrow a hand some amount of capital. Due to lack of sufficient amount of money, the owner can not expand his business operation.
Limitations in managerial ability:
A person must not obtain all the know-how or managerial ability needed to manage the business. In order to handle the organization properly, it requires planning, organizing, controlling, marketing, financing, motivating and so on. A person rarely does have all these expertise. So it may fail.
Lack of Stability:
Lack of stability is one of the major disadvantages of sole proprietorship. Death, illness, bankruptcy, or retirement of the owner terminates the proprietorship.
Demands on time:
The owner is responsible for the total activities of the business. He has to spend all day in his business. So he can hardly enjoy a relax time in his personal life.
Difficulty in hiring and keeping high-achievement employees:
The sole proprietor is the business. He is always motivated to do better something for his business. It is rare that he can get a high- achievement employee. If he hires a highly qualified employee, it is difficult to keep him in the organization. Because this type of employee wants to do something by himself.
Finally, in spite of its some demerits, sole proprietorship is the most common and popular business form in any country.
Questions:
What is sole proprietorship business?
Discuss the advantages of sole proprietorship business.
Discuss the disadvantages of sole proprietorship business.
Lecture-5
Key Word: Corporation, Authority, Association, Joint Venture, Nominal, Effort, energy, Foundation, Contract.
PARTNERSHIP
Partnership Business
A Partnership is a business owned by two or more people. A business may have a small beginning as a sole proprietorship, later expand into a partnership, and finally become a corporation. It is an association of two or more persons to carry on business for profit. A partnership is similar to a sole proprietorship in many respects, other than the difference in the number of owners. A partnership can be based on a written contract or a voluntary and legal oral agreement.
According to the Partnership Act-1932, Sce-4, in our country, “Partnership is the relation between persons who have agreed to share profits of a business carried on by any of them acting for all.”
The Partnership Act of America states, “The partnership is an association of two or more persons to carry on as co-owners a business for profit”
So, two or more persons; maximum 20 persons (10 persons in the banking business), own a business on the basis of contract among them and carry on one or two persons of them for profit, it is called partnership firm.
Types of Partners:
General partner or Active partner:
The partner who invests money in the business and participates in its operations directly is called general or active partner. They have to bear unlimited risks. A general partner has authority to act and make any kind decisions as an owner.
Limited partner:
The partner who has limited liability in the firm is known as limited partner. He is not responsible for its unlimited risks like general partner. This type of partner is liable up to the amount of his investment. It must be mentioned that a limited partnership has at least one general partner.
Dormant partner or Sleeping partner:
A dormant partner or sleeping partner is a partner who does not participate in its operations but he enjoys its profits. He only invests his capital for gaining something. He is also liable for any kind of loss.
Working partner:
In some partnership business, there is a working partner who does not invest any capital but he employs his efforts, energy, experiences. According to the contract, he enjoys profit and suffers by loss and he has an unlimited liability for the business.
Nominal partner:
Nominal partner is a special type of partner. He does not invest any fund in the business, he has no participation in its operations, and he is free from any kind of liability. He only gets a fixed amount of profit or salary for his goodwill. The firm is permitted to use his good will.
Joint Venture:
When a number of individuals and business join together in order to accomplish a specific purpose or objective or complete a single transaction, this way of doing business is known as joint venture. For example, Bashundara Group and Amin Mohammad Foundation Ltd, both of them are related to real estate business, may wish to purchase land and construct buildings in several areas of Dhaka city and finally sell it for making profit.
The Partnership Contract:
A partnership business is basically based on a contract among its members. This contractual agreement is called articles of partnership. It may be oral or written and signed. An oral agreement is sufficient but not recommended. So it should be written and signed. Because, a written agreement has a legal identity and it helps to remove any kind of misunderstandings in future.
A written partnership agreement includes the following main features:
Name of the business partnership,
Type of business,
Location of business,
Names and addresses of the partners,
The amount of each one’s investment,
Expected life of the partnership,
The procedures for distributing profits and converting losses,
The amounts that partners will withdraw for services or salary or remuneration of the partners,
Procedures for withdrawal of funds,
Duties of each partners,
Procedures for dissolving the partnership.
Questions:
What do you mean by partnership business?
Discuss the different types of partners.
What is partnership contract?
What are the main features of a partnership contract?
Lecture-6
Key Word: Dissolving, Withdraw, Converting, Remuneration, Ability, Managerial Skills, Capital, Investment, Termination.
Advantages of a Partnership:
More Capital:
In the sole-proprietorship, the amount of capital is limited because his personal wealth is limited. But in partnership, the amount of capital may increase significantly. According to the agreement, the partners supply funds and total capital is sufficient for the business. Moreover any partner can provide a large amount of capital.
Combined managerial skills:
In a partnership, people with different talents and skills may join together. One partner may be good at marketing; the other may be expert at accounting and financial matters. The combination of these skills could provide a greater chance of success.
Ease of starting:
A partnership is easy to start because it involves a private contractual arrangement. It is nearly free from government regulation as like as a sole proprietorship. The cost of starting a partnership is low. Usually, it requires a modest legal fee for drawing up a written agreement.
4. Ability to attract the Retain Employees:
As you remember, sole proprietorships often have trouble attracting & retaining superior employees because there are few opportunities for advancement. A partnership can overcome this, however, because valuable employees can be made partners in the firm. This is common practice in law & accounting firm.
Tax Advantage: As with a sole proprietorship, the profit from a partnership venture is not taxed as a business. Any profits become personal income of the partners and are taxed as personal income.
Disadvantages of a Partnership:
Partnership does not enjoy advantages, it has disadvantages too. These are as follows:
1. Unlimited Liability:Each general partner is liable for a partnership’s debts. Suppose Rahim & Karim partnership fails with outstanding bills of Tk. 100,000. This amount must be paid by someone.
2. Potential disagreements:Decisions may be several people (partners) are often better than those made by one. However, having two or more people deciding on some aspect of the business can be dangerous. Power & authority are divided, and the partners will not always agree with each other.
3. Investment withdrawal difficulty: A person who invests money in a partnership may have a hard time withdrawing the investment. It is much easier to invest in a partnership than to withdraw.
4. Limited capital availability:The partnership may have an advantage over the sole proprietorship in the availability of capital, but it does not compare to a corporation in ability to raise capital.
5. Instability: If a partner dies or withdraws from the business, the partnership is dissolved. A new partnership or some other form of business organization must be legally established.
Corporation:
The corporation provides a form of business ownership in which owners spread over a wide geographical area can hire professional managers to operate the business.
Difference between sole proprietorship, partnership business.
Questions:
Explain the advantage and disadvantage of partnership business.
What is corporation?
Show the difference between sole proprietorship and partnership business.
Lecture 7
Key Word: Entrepreneur, Achievement, Persistence, Tendency.
Entrepreneurship, Franchising and small business
Short notes:
Entrepreneur:
An entrepreneur is a person who takes the risks necessary to organize and manage a business and receives financial profits and nonmonetary reward.
Intrapreneur:
An entrepreneurial person employed by a corporation and encouraged to be innovative and creative.
Characteristics of a growth oriented entrepreneur
A growth oriented entrepreneur has some characteristics, such as –
Need for achievement: Growth oriented entrepreneurs have a high need for achievement. They need to succeed, to achieve, to accomplish, challenging tasks.
Low need to conform: Growth oriented entrepreneurs listen, but they are able to ignore others’ advice.
Persistence: Growth oriented entrepreneurs are persistent. They work hard on the details and relentlessly try to find ways to become more profitable.
High energy level: The capacity for sustained effort requires a high energy level. All the necessary work – planning, organizing, staffing, directing, creating strategy, and finding funds – can only be accomplished on a demanding schedule.
Risk taking tendency: People with a high need for achievement tend to take risks. Growth oriented entrepreneurs believe so strongly in their ability.
Questions:
Write short notes: Entrepreneur, Intrapreneur.
Discuss the characteristics of a growth oriented entrepreneur.
Lecture – 8
Key Word: Franchise, Franchising, Franchisee, Franchisor, Regulate, Standardization, Procedures, Contractual.
Q. What is “Franchise”?
Answer: A franchise is the right to use a specific business name (Pizza Hut, KFC etc) and sell its goods or services in a specific city, region, or country.
Q. Write down the important elements of a franchise business.
Answer: A franchise business has some important elements, such as-
It is a contractual agreement between the franchisee and franchisor.
It has a branded good or service.
Its operations are conducted by a businessperson for the purpose of earning a profit.
The business is monitored by the franchisor so that standard procedures and a standardized product or service are used.
Q. What is franchising?
Answer: Franchising is a system for selective distribution of goods and services under a brand name through outlets owned by independent business owner.
Q. Who is a franchisee?
Answer: A franchisee is the independent owner of franchise outlet who enters into an agreement with a franchisor. The franchisee enjoys the right to profit and runs the risk of loss.
Q. Who is franchisor?
Answer: The licensing company in the franchise agreement is called franchisor.
Franchisors have some characteristics such as-
The franchisors supply the franchisee with know-how or brand identification on a continuous basis.
They control the distribution of goods or services through a contract.
They regulate the activities of franchisee in order to achieve standardization.
Questions:
What is “Franchise”?
Write down the important elements of a franchise business.
What is franchising?
Who is a franchisee?
Who is franchisor?
Write down the characteristics of a franchisor.
Lecture-9
Key Word: Guidance, Proven, Assistance, Disclosure, Investor, Control, Deficiencies, Improve.
Q. Explain the advantages of franchise business.
Answer: A franchise business always attracts people through its some advantages, such as-
Guidance: A person with limited managerial skill may be able to get by in a large organization because he or she is just one of many managers. Many franchisors try to overcome managerial deficiencies or inexperience by providing some form of training.
Brand Name: The investor who signs a franchise agreement acquires the right to use a nationally or regionally promoted brand name.
For example: the color of a Pizza Hut building.
Proven Product: The franchisor can offer the franchisee a proven product and method of operating the business. The product or service is known and accepted by the public.
Financial Assistance: By joining a franchise company, the individual investors may be able to secure financial assistance.
Q. Explain the disadvantages of franchise business.
Answer: The disadvantages of franchise business are as follows-
Costs: Franchisees must pay franchise fees. In return, the franchisors can provide training, guidance, and other forms of support that would otherwise cost money. If it were possible to earn the same income independent of the franchisor, the investor could save the amount of these fees.
External Control: The franchisor must exercise some control over promotional activities, financial records, hiring, service procedures, and managerial development. These controls are unpleasant to the person who seeks independence.
Week Training Programs: Some promoters promise sound training programs and never deliver. In other case, the training programs are weak—too brief and staffed by trainers who do not have instructional skills.
Franchisor Disclosure: Because of the nature of franchising in the United States, evaluating an opportunity carefully before signing an agreement is important. The large number of franchise companies makes the task difficult.
Q. What is small business? Answer: Small business is one that is independently owned and operated and is not dominant in its field of operation.
Questions:
Explain the advantages of franchise business.
Explain the disadvantages of franchise business.
What is small business?
Lecture 10
Key Word: Ethics, Behavior, Individual, Consumers, Environment, Safety, Pollution, Awareness, Equality, Encourage.
Ethical and Social responsibilities
Q. Define ethics and business ethics.
Ethics:
The principles of behavior that distinguish between right and wrong.
Business ethics:
The evaluation of business activities and behavior as right or wrong.
Q. What are the factors those influence the ethical behavior?
Factors influencing ethical behavior are-
The business environment
the organization
the individual
Firms can encourage ethical behavior through education and by developing and enforcing codes of ethics.
Q. Define social responsibility.
The awareness that business activities have an impact on society and the consideration of that impact by firms in decision making is called social responsibility.
Q. Discuss the areas of social responsibility of a business.
Areas of social responsibility are given below-
Responsibility to consumers
Responsibility to employees
Responsibility to environment
Responsibility to investors.
Q. What are the responsibilities to the consumers?
The right to safety
the right to be informed
the right to choose
the right to be heard
Q. What are the responsibilities to the employees?
Safety in the workplace,
equality in the workplace
the hard-core unemployed
Q. What are the responsibilities to the environment?
Or, describe the three types of pollution?
Water pollution,
Air pollution
Land pollution.
Questions:
Define ethics and business ethics.
What are the factors those influence the ethical behavior?
Define social responsibility.
Discuss the areas of social responsibility of a business.
What are the responsibilities to the consumers?
What are the responsibilities to the employees?
What are the responsibilities to the environment?
Lecture-11
Key Word: Law, Sources, Categories, Deregulation, Effect, Organization, Federal, State, Administrative, Property.
Business, Law and Government
Q. What is law?
A law is a standard or rule established by a safety to govern the behavior of its members. Federal, state, and local governments, constitutions, and treaties all establish laws. So do court decisions: Laws have a direct and substantial impact on how business firms conduct various activities.
Q. What are the Sources of law?
Three major sources of law are-
Common law: The body of law created by judges through their court decisions.
Statutory Law: As a body, the laws enacted by federal, state, and local governments, constitutions, or treaties.
Administrative law: Regulation affecting business, passed by state and federal administrative agencies.
Q. What are the various categories of business law?
Several types of laws regulate business activities. These include product liability and laws governing contractual agreements, sales agreement, property transactions, bankruptcy proceedings, and negotiable instruments.
Q. Explain the effect of deregulation on business?
Deregulation can lower the costs of regulating business and can lead to increased competition, better service, and lower prices.
Q. What is tax? How taxation support the activities of government?
A payment for the support of government activities required of organizations and individuals within the domain of the government. Citizens pay for the work of government through taxation. Corporations and individuals are subject to federal, state, and local taxes, including taxes on the money they earn, the property they own, and the products they purchase.Questions:
What is law?
What are the Sources of law?
What are the various categories of business law?
Explain the effect of deregulation on business?
What is tax? How taxation support the activities of government?
Lecture-12
Key Word: Environment, Social, Loan, Finance, Warehouse, Industry, Population, Technology, Religious, Attitude.
Business Environment
Q. What is Business environment?
Answer: Business is a social unit that is involved in production, distribution, buying, selling and other related activities with view to making profit. Each and every business organization operates its whole activities in an environment. The environment where it is operated is called business environment. As a social unit, every business is directly of indirectly affected by natural, political, social, cultural, technical, economical environment. If someone wants to run his organization successfully, he has to consider the several elements of environment significantly. Otherwise, a business fails.
Glueck & Jush state that:
“Business environment includes factors outsides the firm which can lead to opportunities for or threats to the firm.”
Q. Discuss the elements of Business Environments.
Answer: Business environment includes all social, natural, political, economical, cultural and technical factors that can affect the activities of it directly or indirectly.
In a board sense, business environment is classified into five categories. They are as follows:
Natural environment,
Economical environment.
Political environment,
Social environment,
International environment.
1. Natural Environment:
The overall business activities of a country depend on its natural environment. Natural environment includes land, water, climate, and so on that affect commercial activities and life style of people. For example, Thailand, Myanmar, India, Bangladesh are rich in agricultural sector, because of its fertile land. Japanese are well developed in industrial sector. Because they have no plain land they are self-motivated to do better in industrial sector.
Economical Environment :
After collecting the natural resources, we produce goods and services by industry and distribute by commerce. The total activities are counted as economic activity. Economic environment includes money, loan, financial institutions, industry, transportation, insurance, warehousing and so on.
Economic environment is essential for a business. For instance, where money is available, it is easy to set up a business. If other factors like transportation, insurance, warehousing, all are well organized, they can motivate people to involve in business.
Political Environment:
In today’s business world, political environment is considered as a vital issue for a business. Business operations are directly affected by political environment. Government rules and regulations, taxation system, different industrial policies, law and order situation etc affect the business positively and negatively. For example, if a businessman does not feel secured or government does not assist an enterprise, people are not interested to open a business.
Now a day, political condition of our country is not stable. So, foreign investors are not interested to invest money here.
Social Environment:
Social, cultural environment of a country affect its business environment. Social environment includes the following factors:
Population: A business organization always seeks customers. If a country has large population, there is a chance of getting large market. At the same time, there is a chance of getting human resource at a lower rate of remuneration. So, population size is an important issue for an organization.
Race and religious beliefs: The formation and the success of a business depend on race and religious belief more or less.
Education: Educational background of a nation can assist to set up a business in a particular area.
Attitude of the customers: A businessman has to consider deeply the attitudes of the customers. Customers’ choice, income, life style etc should be considered.
Science and technology: At present, the development of a business depends on science and technology. If a country is developed in this sector, it can provide better quality products and services. So science and technology creates the favorable environment for a business.
International Environment :
Now a day, international relationship is very much important for an organization, especially for a multinational corporation. Good relation with other countries assists to expand and open a business.
Questions:
What is Business environment?
Discuss the elements of Business Environments.
Lecture- 13
Key Word: International, Concept, Exporting, Importing, Trade, Exchange, Barriers, Climate.
Q. What is International Business? What are the characteristics of international business?
Answer: International business is a term used to collectively describe all commercial transactions (private and governmental, sales, investments, logistics, and transportation) that take place between two or more nations.
Private companies undertake such transactions for profit;
Governments undertake them for profit and for political reasons.
It refers to all those business activities which involves cross border transactions of goods, services, resources between two or more nations. Transaction of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc.
Features/Characteristics of international business:
International business is all commercial transactions between two or more countries.
It involves ways of business, such as exporting and importing, that differ from those at the domestic level.
Foreign conditions diversity which are company’s external environment.
Q. What are the basic concepts of international business?
Answer: The basic concepts of international business are as follows-
Exporting: Selling domestic goods to a foreign country.
Importing: Purchasing goods from another country.
Balance of trade: Difference between the amounts it export and amount it import.
Balance of payment: The total flow of money in and out of a country.
The exchange rate: The rate at which one country’s currency can be exchanged for another country’s currency.
What are the barriers of international business?
Answer: A nation’s culture and social forces can create obstacles to international trade. The political climate of a country also influences international trade. A nation can also restrict trade through import tariffs, quotas and embargoes and exchange controls.
Questions:
What is International Business? What are the characteristics of international business?
What are the basic concepts of international business?
What are the barriers of international business?
Lecture -14
Key Word: Merchandise, Service, Transportation, Tourism, Performance, Insurance, Licensing.
Q. Discuss the modes of international business.
Answer: To do international business a company can choose from a number of operating modes such as-
Merchandise exports and imports:
Merchandise exports and imports usually are a country’s most common international economic transaction.
Merchandise exports are tangible products and goods which are sent out of a country.
Merchandise imports are the goods which are brought into a country.
For example: Bangladesh sells garments products to the USA. It is an export for Bangladesh and it is an import for the USA.
Service exports and imports:
Service exports and imports are the sales and purchases of non-product items internationally.
For example: Transportation, banking, insurance etc.
The company which is giving service and receiving payment is making service export.
The company which is paying money and receiving service is making a service import.
Service exports and imports take many forms-
Tourism and transportation: These are the important sources of revenue for some companies such as airline, travel agencies, hotels etc.
Performance of service: It refers to the payments for the performance of some services such as banking, insurance, management service etc. It also can be –
Turnkey operation
Management contracts
Use of assets: Sometimes companies allow other company to use their assets such as – company name, goodwill, copyrights, trademark etc. in exchange of royalty.
This type of agreement can be formed in many ways such as-
Licensing
Franchising
Investment:
Foreign investment refers to the ownership on foreign property in exchange of a financial return such as- interest and dividends.
Foreign investment takes two forms-
Direct investment
Portfolio investment.
Q. Write short notes:
Licensing: When a company allows other company to use their assets such as- trademark, patent, copyright etc in exchange of the royalty is known as licensing. The licensor gives the licensee the right to use their asset.
For example: Sports teams license different companies abroad to use their logos on t-shirts and caps.
Franchising: Franchising is the mode of international business in which one party (the franchisor) allows other party (the franchisee) to use their assets but the main condition is to maintain the quality of the product and service which is exactly done in the franchisor’s company. The franchisee also has to pay royalty to the franchisor.
For example: KFC, McDonald’s.
Questions:
Discuss the modes of international business.
Write short notes: Licensing, Franchising
Lecture-15
Key Word: Investment, Planning, Organizing, Staffing, Leading, Controlling, Programs, Budgets, Procedures, Strategies.
Management
Q. Define of management.
Answer: Management is the application of planning, organizing, staffing, directing, and controlling functions in the most efficient manner possible in order to accomplish meaningful organizational objectives. Management is the art or process of getting things done through others effectively and efficiently.
Q. Discuss the functions of managers.
Answer: There are five functions of managers:
Planning,
Organizing,
Staffing,
Leading, and
Controlling.
The functions of managers provide a useful structure for organizing management knowledge.
(1)Planning:
Planning involves selecting missions and objectives and the action to achieve them it requires decision making, that choosing future courses of action from among alternatives. There are five types of planning:
1. Missions and objectives.
2. Strategies and polices.
3. Procedures and rules.
4. Programs.
5. Budgets.
(2) Organizing
Organizing is the part of managing that involves establishing an intentional structure of roles for people to fill in an organization. The purpose of an organization structure is to creating an environment helpful for human performance. It is then management tools and not an end. Although the structure must define the task to be done, the rules so established must also be designed in the light of the abilities and motivations of the people available designing an effective organization structure is not an easy managerial task.Many problems arises in making structures fit situations.
(3)Staffing
Staffing involves filling and keeping filled, the positions in the organization. This is done by identifying the work force requirement inventorying the people available and recruiting, selecting, placing, promoting, appraising, planning the careers, compensating and training.
(4)Leading
Leading is influence people so that they will contribute to organization and group goals. All managers would agree that most problems arises from peoples desires and
Problems, their behavior as individuals and in groups and those effective managers also need to be effective leaders.
Leading involves motivation, leadership styles and approaches and communications.
(5)Controlling:
Controlling is measuring and correcting individuals and organizational performance. It involves measuring performance against goals and plans, showing where the deviations from standards exit and helping to correct them. In short controlling facilitates the accomplishment of plans. Control activity generally relate to the measurement of achievement. Some means of controlling like the budget for expenses, inspection, record of labors-hours lost, are generally familiar. Each shows whether plans are working out.
Questions:
Define management.
Discuss the basic functions of management.
Lecture-16
Key Word: Accountability, Interpersonal, Role, Decision, Theory, Physiological, Security, Affiliation, Esteem, Actualization.
Q. Compare the three levels of management in terms of authority, responsibility and accountability.
Top/Executive Level managers are engaged primarily in charting the overall mission, strategy and objectives of the business. These managers must be skilled in product distribution, recruiting key personnel, and developing plans. They often represent the company in the community and in dealing with the government.
Middle-level managers receive the overall strategies, missions, and objectives from the executive managers and translate them into specific action programs. They function as a conduit between executive managers and supervisory panel.
First line managers are directly responsible for coordinating the work of non managers. They work directly with employees and motivate them to perform satisfactorily.
Q. Explain the three types of managerial role.
Answer: The three types of managerial roles are discussed below-
Interpersonal role: They have to interact with others to fulfill the organization’s objectives. They lead, inspire, motivate and encourage employees. They communicate confidence and mutual respect.
Informational role: They also play informational roles by being the group’s focal point.
Decision roles: Managers play decision roles by accepting responsibility for decision making.
Several skills of managers are decision-making / problem solving, communication, interpersonal, and objective / goal- setting skills.
Q. Discuss the Maslow’s hierarchy of need theory.
Answer: The hierarchy of need theory was presented by Maslow. Abraham Maslow saw human needs in the form of hierarchy, ascending from the lowest to the highest He concluded that when one set of needs is satisfied, this kind of need ceases to be motivators
THE NEEDS HIERARCHY:
The needs placed by Maslow in an ascending order are these.
1: PHYSIOLOGICAL NEEDS:
These are the basic need necessary for human life. Such as food, water, warmth, shelter and sleep Maslow said that until these needs are satisfied to the degree necessary to maintain life their needs, will not motivate people
2: SECURITY OR SALTY NEEDS:
These are the needs to be free of physical danger and of the fear of losing of job, property, food and shelter
3: AFFILIATION OR ACCEPTANCE NEEDS:
Since people are social beings, they need to belong to be accepted by other
4: ESTEEM NEEDS:
According to Maslow, once people begin to satisfy their need to belong they tend to want to be held in esteem both by themselves and by others. Esteem need produces such satisfactions as power, prestige, status and self confidence.
5: NEED FOR SELF ACTUALIZATION:
Maslow regards this as the highest need in his hierarchy. It is desire to become what one is capable of becoming
Self- actualization needs
Esteem needs
Affiliation or acceptance needs Security and safety needs Physiological needs
Maslow’s Hierarchy of needs
Questions:
Compare the three levels of management in terms of authority, responsibility and accountability.
Explain the three types of managerial role.
Discuss the Maslow’s hierarchy of need theory.
Lecture- 17
Key Word: Wants, Needs, Demand, Market, Marketing Mix, Segmentation, Target, Positioning.
Marketing
Q. What is marketing?
Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
Q. Write short notes: needs, wants, and demand.
Needs
A need is a state of felt deprivation.
When a need is not satisfied, a person will do one of two things:
1. Look for an object that will satisfy it; or
2. Try to reduce the need.
People in industrial societies may try to find or develop objects that will satisfy their desires. People in less developed societies may try to reduce their desires and satisfy them with what is available.
Wants
Wants are the form taken by human needs as they are shaped by culture and individual personality.
Demand
When backed by an ability to pay - that is, buying power - wants become demands.
Q. What is market?
Answer: A market is a set of actual and potential buyers of a product.
Q. Discuss the different types of market.
Answer: There are basically two types of market-
Consumer markets consist of individuals and households that buy goods and services for personal consumption.
Business markets buy goods and services for further processing or for use in their production process.
Q. What is market segment and market segmentation process?
Market Segment: A group of individuals with one or more similar product needs is called market segment.
Market Segmentation Process: The division of the total market into segments with a marketing mix directed to one of the segments.
Q. What is target market and positioning?
Target Market: A group to which a firm directs its marketing activities.
Positioning: Positioning refers to creating a good image about the product in customers’ mind.
Questions:
What is marketing?
Write short notes: needs, wants, and demand.
What is market? Discuss the different types of market.
What is market segment and market segmentation process?
What is target market and positioning?
Lecture- 18
Key Word: Product, Price, Place, Distribution, Promotion, Consumer, Recognition, Decision, Purchase, Evaluation.
Q. What is marketing mix? Explain the 4ps of marketing.
Answer: Marketing mix is the combination of four elements – product, price, place and promotion- used to satisfy the needs of the target market.
The major marketing management decisions can be classified in one of the following four categories:
These variables are known as the marketing mix or the 4 P's of marketing. They are the variables that marketing managers can control in order to best satisfy customers in the target market.
The firm attempts to generate a positive response in the target market by blending these four marketing mix variables in an optimal manner.
Product
The product is the physical product or service offered to the consumer. In the case of physical products, it also refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc.
Price:
Pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing.
Place: Place (or placement) decisions are those associated with channels of distribution that serve as the means for getting the product to the target customers. The distribution system performs transactional, logistical, and facilitating functions. Distribution decisions include market coverage, channel member selection, logistics, and levels of service.
Promotion: Promotion decisions are those related to communicating and selling to potential consumers. Since these costs can be large in proportion to the product price, a break-even analysis should be performed when making promotion decisions. It is useful to know the value of a customer in order to determine whether additional customers are worth the cost of acquiring them.
Promotion decisions involve advertising, public relations, media types, etc.
Q. What is consumer buying behavior? Show the consumer buying behavior process.
Answer: Consumer buying behavior is the decisions and actions of individuals who purchase products for personal use.
Consumer Buying Behavior Process:
This process has five stages –
Need recognition.
Search.
Evaluation of alternatives.
Purchase decision.
After purchase evaluation.
Q. Define marketing research.
Answer: The systematic gathering, recording, and analyzing of information for guiding marketing decisions.
Questions:
What is marketing mix? Explain the 4ps of marketing.
What is consumer buying behavior? Show the consumer buying behavior process.
Define marketing research.
Lecture – 19
Key Word: Finance, Efficient, Debt Capital, Equity Capital, Designated, Claim, Deduction.
Finance
Q. Define finance.Answer: The study of money within the firm; the business function responsible for finding funds, managing them, and determining their best use.
Q. Discuss the efficient sources of funds of a business firm.Answer: The two major categories of funds sources for a business are debt capital and equity capital.
Debt capital is simply funds obtained through borrowing.
Equity capital, on the other hand, does not require repayment. Those funds come from the current owners of the firm or from outsiders who provide capital in exchange for some ownership in the firm.
Q. Show the differences between debt capital and equity capital.
Questions:
Define finance.
Discuss the efficient sources of funds of a business firm.
Show the differences between debt capital and equity capital.
Lecture-20
Key Word: Accounting, Journal, Ledger, Financial Statement, Equation, Asset, Liability, Owner’s Equity.
Accounting
Q. Define Accounting.
Answer: The process of identifying, measuring, and communicating economic information to permit informed decisions by users of the information.
Q. What is Accounting Cycle? Discuss the different steps of accounting cycle.
Answer: The steps- analyzing, recording, posting, and preparing reports- by which the results of business transactions are communicated, are called accounting cycle.
Journal:
A book or computer file in which business transactions are recorded chronologically.
Account:
Record of all transactions affecting a particular financial statement element.
General Ledger:
A book or computer files summarizing all the accounts of a business.
Financial Statement:
Document presenting a company’s financial position, results of operations, and cash flow during a stated period of time.
Q. What is Accounting Equation? Discuss.
Answer: The accounting equation indicates a company’s financial position at any point of time.
Accounting Equation:
Asset= Liability + Owners’ Equity
Asset:
Anything of value owned by the business and used in its operation.
Liability:
Amounts owed by a business to its creditors.
Owners’ Equity:
Claims of the owners, partners and shareholders against the firms’ assets; the expense of assets over all liabilities.
Question:
Define Accounting.
What is Accounting Cycle? Discuss the different steps of accounting cycle.
What is Accounting Equation? Discuss.
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