Notes, summaries, assignments, exams, and problems for Economics

Systems:

Since its inception, the EFQM Model has provided a blueprint for organisations across and beyond Europe to develop a culture of performance and innovation. Allows organisations to embrace change, drive performance and evolve for the future. Here are just some of the Model benefits:

• Define your purpose:

Purpose is the lifeblood of any organisation. Without it, there is no reason to serve. The new EFQM Model places an unparalleled emphasis on the importance of purpose, vision and agile strategies to organisations if they are to create sustainable value.

• It helps create your culture:

The new EFQM Model is an innovative culture creator, valuing core quality beliefs and shared goals at the heart of organisations whilst allowing them to remain...

Key Factors Influencing Tourism Participation

Determinants explain why some countries have a high propensity to participate in tourism, whereas other countries show a lower one. Determinants can be classified into the following categories:

• Economic: Disposable income, GNP per capita, private consumption, cost of living, tourism prices, exchange rate differentials, promotional expenditure, and prices of other destinations.
• Sociological: Motivations, travel preferences, perceptions of destinations, paid vacations, past experience, and images of destinations.
• Demographic: Life span, physical capacity, health and wellness, etc.
• Political: Political and social environment, barriers and obstacles, restrictions, rules and laws, war, terrorism, accessibility,

Delegation of authority is the result of:

• the firm’s growth
• more complex decisions

Delegation and empowerment are essential skills for effective managers. Although the terms are sometimes used interchangeably, there are several areas of difference between them:

• Delegation is a straightforward means of assigning tasks to your employees.
• Empowerment seeks to give an employee more authority with the aim of developing employee commitment, enthusiasm, and expertise, while encouraging innovation that will benefit the organization over time. Empowerment necessarily requires some level of delegation, but not all instances of delegation will produce an empowered employee.

Responsibility: The obligation, placed on employees through delegation, to perform...

Current Assets

• Cash
• Marketable investments (short-term)
• Accounts receivable (acc. receiv.)
• Inventory (inv.)
• Prepaid assets (rent, insurance)

Non-Current Assets

• Long-term investments (LT investment)
• Property, plant, and equipment (PPE)
• Intangible assets (goodwill, patent)

Current Liabilities

• Accounts payable
• Accrued liabilities (taxes payable, wages payable, expenses that haven’t been paid yet)
• Short-term debt
• Deferred revenue
• Current maturities of long-term debt

Non-Current Liabilities

• Long-term debt (LT debt)
• Other long-term liabilities

Equity — Contributed Capital

• Common stock
• Additional paid-in capital (add. paid-in cap.)
• Treasury stock

Equity — Earned Capital

Retained earnings: beginning balance + net income − dividends = ending balance.

Profitability Ratios

• ROE

Brand Awareness and Advertising Strategies

Brand Awareness: How present is your brand in the market? Is it recognized by the public?

Brand Image: What image do you project to your customers?

Brand Loyalty: Dedication to purchasing the same product or service repeatedly, now and in the future, from the same brand, regardless of a competitor's actions or changes in the environment.

Brand Stretching: When a company tries to launch products outside its core group. Example: Zara / Zara Home.

Announcement vs. Advertisement: An announcement is an act of announcing or giving notice, while an advertisement is a commercial solicitation designed to sell a commodity, service, or similar (marketing).

What Makes a Good Advertisement?

A good advertisement is:

• Clever
• Powerful
• Catchy
• Inspiring
• Uses

Core Principles of Economic Thinking

• The Economic Way of Thinking: A set of basic concepts that helps one understand human choices. It stresses that incentives matter, meaning individuals respond in predictable ways to changes in personal costs and benefits.
• Primary Assumption: Economic analysis assumes that changes in the personal benefits and costs associated with a choice will exert a predictable influence on human behavior.
• Example of Incentives: If a college enforces a new policy where anyone caught cheating is immediately expelled, the basic postulate of economics suggests that fewer students will attempt to cheat.
• Secondary Effects: A good economist considers not only the immediate, apparent effects of a change but also the secondary effects—unintended

MANAGEMENT MODELS

Partial Models: specific elements of the Management process brought to the foreground

• Management by Exception – Management only in exceptional situations.
• Management by Delegation – Management by transfer of tasks.
• Management by Decision Rules – Default decision rules are given.
• Management by Results - Management by control of results.

* Total Models: Inclusion of all elements of the Management process

• Management by Objectives – Management by agreed targets.
• St.Gallener Leadership Model - overall integrating model.
• Harzburger Leadership Model - Management with autonomous employees.
• 7-S-Model - Mc.Kinsey Model - hard and soft factors.

* Management by objectives

-Description

o Management and employees agree jointly on targets.

o Employee...

Special Pricing Strategies

1. For a New Product

Different stages in a product’s life cycle involve different goals, which require different pricing strategies.

A. Market-Skimming Price

Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the high price; the company makes fewer but more profitable sales. Example: Apple introduces new products with high prices, and then, when the new model is introduced, the older model decreases in price.

Conditions:

• Good quality and image
• Enough buyers
• Profitable → revenues can’t be offset by the costs of producing on a small scale
• Competitors can’t enter easily

B. Market Penetration Price

Setting a low price for a new product in order to attract a large number...

Topic 5: Aggregate Planning

Objective

The objective is to meet the forecast demand while minimizing the total cost over the planning period. The planning process determines the quantity and timing of production for the intermediate future.

Requirements for Aggregate Planning

• Measure sales and output
• Forecast demand
• Determine costs
• Schedule decisions for the planning period

Chase Strategy

Match output rates to the demand forecast for each period. Vary workforce levels or vary production rates.

Level Strategy

Daily production is uniform. Use inventory or idle time. Stable production leads to better quality and productivity.

Topic 7: Inventory Management

ABC Analysis

Divides inventory into three classes based on annual dollar volume:

• Class A: High annual dollar