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

The work of the Human Resources department

We all know that recruitment and selection is one of the tasks that the HR department fulfills. The other tasks will be discussed below:

• Recruitment and selection: Involves selecting and attracting the best workers.

Wages and salaries: Must be enough to motivate or attract workers.
Industrial relations: There must be effective communication between departments.
Training programmes: Must meet the training needs of employees and accomplish business objectives.
Health and safety: Must do things according to the law.
Redundancy and dismissal: Must obey all laws when firing workers.

Recruitment and selection

Workers are needed when a business starts up, expands or an existing employee leaves. Businesses use the... Continue reading "Human Resources Department: Recruitment and Selection" »

Dimensions of Corporate Social Responsibility

Philanthropic (Good Citizen)

Ethical (Be Ethical, Right from Wrong)

Legal (Obey the Law)

Economic (Be Profitable)

5 Barriers to Sustainable Consumer Behavior

• Lack of Awareness & Knowledge
• Negative Perceptions
• Distrust
• High Prices
• Low Availability

Measuring Brand Equity

Contributes to positive perceptions of product quality

Qualitative (Free Association/Projective Techniques)

Quantitative (Brand Recognition Research/Brand Recall)

4 Dimensions of BrandAsset Valuator

Differentiation (Brand's Point of Difference)

Relevance (Brand Relates to You)

Esteem (How Well Regarded the Brand Is)

Knowledge (Understanding of the Brand)

Role of Social Media in Branding

• Brand Advocates/Sharing Info/Seeing Discounts/Customer Services
• Allows

Strategic Exporting for Small and Medium Businesses

• Export Online: Small and Medium Businesses (SMBs), System Unibex, and Dun & Bradstreet.

Phases of International Market Entry

• Phase 1: Planning; Phase 2: Design; Phase 3: Development; Phase 4: Launch and Maintenance.

Motivations for Global Expansion

• General Motivations: Aggressive firms aiming to be more long-term and active in a large number of markets, willing to dedicate organizational resources to the management of foreign business.
• Proactive Motivations: Profit advantage, international sales, and unique products. Note: Profitability of international startups is often low due to high costs; there is a significant gap between perception and reality for those with no experience. Other factors

Perfect Competition: Meaning and Definition

A perfectly competitive market is one with a large number of buyers and sellers, all trading a homogeneous product without artificial restrictions, and possessing complete market knowledge.

In other words, a market is considered perfect when all potential buyers and sellers are immediately aware of transaction prices. Under these conditions, the price of the commodity tends to equalize across the market.

As Mrs. Joan Robinson stated, "Perfect competition prevails when the demand for the output of each producer is perfectly elastic."

According to Boulding, "A perfectly competitive market may be defined as a large number of buyers and sellers all engaged in the purchase and sale of identically similar commodities,... Continue reading "Perfect Competition: Definition, Characteristics, and Examples" »

The Costs and Benefits of Home Ownership

The recent financial crisis forced a critical reevaluation of home ownership. This analysis addresses three key questions:

• What are the costs and benefits of owning a house?
• How has the recent financial crisis affected the net dollar value of home ownership?
• What regulations should policymakers implement following the crisis?

The Impact of the 2008 Housing Crisis

During the recent financial crisis, homeowners found themselves in a very tough situation. After the housing bubble popped, house prices fell severely. Even though the market has recuperated somewhat since 2008, the net value of owning a house has not been the same since the crisis.

Many homeowners experienced negative equity, meaning the remaining... Continue reading "Financial Impact of the Housing Crisis on Home Equity and Regulation" »

Types of Negotiation

• Distributive Negotiation: Parties compete to determine a fixed sum of value. The focus is on who will claim the most value (win-lose scenario).
• Integrative Negotiation: Parties integrate their interests into an agreement, aiming for a mutually beneficial outcome (win-win scenario).
• Multi-Phase Negotiation: Negotiation takes place over several sessions or phases.
• Multiparty Negotiation: At least two negotiators in each group, and there can be more than two groups involved.

Distributive Negotiation

Getting the Other Side on the Table

1. Offer Incentives: Such as money, time, service, or support.
2. Put a Price on the Status Quo: Highlight the costs or disadvantages of not negotiating.
3. Enlist Support: Use allies to facilitate communication.

Cash Flows and Dividends

1. Norris Company Dividends: Norris Company declared cash dividends of $60,000, payable as follows: $20,000 at the beginning of the year and $25,000 at the end of the year. (Calculation: $60,000 + $20,000 = $80,000; $80,000 - $25,000 = $55,000)

2. Indirect Method Cash Flow Statement: On the statement of cash flows prepared by the indirect method, the amortization of premium or discount on bonds payable is added back to net income.

8. Cash Receipts from Issuance: Cash receipts received from the issuance of stock are classified as financing activities.

11. Ten-Year Bond Issuance: A ten-year bond issued at par for $250,000 cash is classified as a financing activity.

17. Inflow of Cash: Issuance of long-term debt represents... Continue reading "Accounting Principles and Financial Statement Analysis" »

Core Financial Definitions

• Opportunity Cost: The difference in return between an investment one makes and another that one chose not to make.
• Risk: The possibility that the actual return on an investment will be different from its expected return. A vitally important concept in finance is the idea that an investment that carries a higher risk has the potential for a higher return.
• CAPM: A financial risk model used by analysts in their valuation process (Expected Return = Risk-Free Rate + Specific Stock Beta × Equity Risk Premium).
• DCF: Techniques used by investment bankers for merger and acquisition analysis, Wall Street traders to value all types of debt obligations, and Wall Street analysts to value stock.
• Free Cash Flow to the Firm (FCFF): The

Decision Trees: Excellent tools for choosing between courses of action. They help form a balanced picture of risks and rewards for each option.

Capital Markets: Markets where governments or companies raise money (capital) to fund operations and long-term investments. Selling bonds and stocks are two ways to generate capital.

Primary vs. Secondary Markets:

In the primary market, securities are first issued to investors through an initial public offering (IPO). Investment banks assist with IPOs by guaranteeing a minimum price before selling to the public.

The secondary market—where people buy and sell previously issued securities—includes stock exchanges, bond markets, and other entities that trade financial instruments. Securities trade based... Continue reading "Financial Markets: Capital, Money, and Investment Banking" »

Human Resource Management (HRM)

Core Functions of HRM

Staffing

The staffing process ensures an organization has the right number of employees with the appropriate skills in the right jobs at the right time. It involves:

• Job analysis: Determining the skills, duties, and knowledge required for jobs.
• Human resource planning
• Recruitment: Attracting qualified candidates.
• Selection: Choosing the best candidate for the position.

Performance Management

Performance management is a goal-oriented process that maximizes employee, team, and organizational productivity.

Human Resource Development

This function encompasses:

• Training and development
• Career planning and development
• Organization development
• Performance management and appraisal

Compensation

Compensation provides... Continue reading "Human Resource Management: Essential Functions and Practices" »