Management of Business Unit 1

CAPE STUDY GUIDE

Done By Amelia Taylor

TOPICS

1. Business Ethics and Corporate Social Responsibility

2. Impact of Globalization on Business

3. The Functions and Theories of Management (the Planning Function of Management)

4. Theory and Application of Motivation (Causes and Effects of Motivation)

5. Theories of Leadership

6. Sources of Finance

7. Components of Financial Statements 8. Financial Statements Analysis

 Business Ethics and Corporate Social Responsibility
Objectives

a) Importance of business ethics and integrity, code of ethics

b) Obligations to stakeholders
c) Good Corporate Governance

The Caribbean business environment is changing and more Caribbean governments are becoming aware
of the damage that is being done to our environment and society by some of our factories and business
organisations. It is more commonplace to hear about protecting our coral reefs and marine life;
prevention of land slippage through reforestation exercises; reducing the depletion of the ozone layer
through a reduction in emissions from our factories and motor vehicles, among other things.
Governments have done to the environment. At least one hotel was brought before the courts for
alleged breach of the environmental laws in Jamaica. A proposal by the bauxite companies in Jamaica to
mine in the Cockpit Country in the parish of Trelawny was turned down by the government because of
environmental concerns. Consumers and other stakeholders are reacting positively to businesses that
act in a socially responsible way. There have been lobby groups encouraging consumers to refuse to
purchase products that were tested on animals or products containing CFCs. In addition, some
businesses have dedicated a portion of their yearly budget to the minimisation of pollution and the
improvement of their social responsibility. This is a practice of firms to act in a manner so that their
actions do not negatively affect society or the environment. Some examples of these include: Producers
who use recycled materials in the manufacture of their products. Some producers have also encouraged
consumers to recycle their packaging, for example the repurchasing of plastic drinks bottles for recycling

Importance of business ethics and integrity

Presently, in most territories, there are some laws preventing businesses from damaging the
environment. However, some actions cannot be prevented by the enactment of laws. Therefore
businesses are also encouraged to act ethically in their operations. Ethics defines what is right or wrong
– or what is moral. It refers to the principles or guidelines that help to inform individuals or groups of
individuals of how they should behave. This definition is largely dependent on the norms of society and
what is accepted over time. Business ethics refers to the morals or set of standards that are used to
guide a business on how it should conduct its affairs. This usually includes written and unwritten codes
on how businesses should behave. Some common ethical issues within CARICOM include: The testing of
products on animals The use of child labour How employees deal with customers Truthful versus
deceptive advertisements

Obligations of the firm to stakeholders

 The firm’s social responsibilities can span four stakeholders of the business in different ways. These are
summarised in:

Good corporate governance

Corporate governance is often defined as a set of rules, practices and processes which guide the way a
business is operated. The aim of corporate governance is to balance the interest of the stakeholders of
the company – that is, the firm must cater for the needs and interest of its stakeholders as much as is
possible. For this to be achieved, though, the board of directors should ensure that meaningful and
healthy relationships are created with shareholders and other stakeholders. A firm which has good
corporate governance will find it easier to achieve its objectives. In many companies we find that the
owners (shareholders) are not necessarily the people who are in control on a day-to-day basis. Instead,
these shareholders often employ paid managers and professionals to operate the firm. The sad reality is
that sometimes board members may not always act in the best interest of the shareholders. Good
corporate governance is therefore needed to ensure that the interests of shareholders are catered for –
it ensures that the rights of shareholders are not infringed; that they, along with other stakeholders, are
treated fairly and equitably; and promotes disclosure and transparency on the part of management.
Today, most firms are operating within a competitive global environment and, as such, being a good
corporate citizen is of the utmost importance. While aiming to generate a profit, the firm must also
prove itself as being aware of the environmental impact of its operations and take steps to lessen that
impact. A firm with poor corporate governance may find it difficult to attract potential investors. It could
also lead to financial collapse, failure of privatisation attempts and an increase in corruption.

Code of ethics

This is a document issued by the firm, outlining the set of guidelines that will be used to govern the
behaviour of management and employees. This code is often based on a set of pre-established
standards or principles and usually includes: The firm’s corporate social responsibility statement The
relationship that the firm has with its customers and suppliers Environment requirements and
unanswered questions Rules on relating to the maintenance of integrity.

Government’s response to social irresponsibility

The following steps can be taken by governments to deal with businesses that are being socially
irresponsible and unethical:

1. Impose taxes to offset the cost to the environment (social cost)

2. Pass legislation limiting noise and other forms of pollution
3. Refuse to give contracts to companies that are unethical or socially irresponsible
4. Impose stiff penalties.
Impact of Globalization on Business
Objectives
A. Multinational (growth, advantages, and disadvantages)
B. Role of Government:
I. Facilitating, enabling environment
II. Developing necessary legal framework
C. Consumer behavior: Choices Quality Responsibility
D. Domestic Business: Competition, Pricing policy, quality assurance
E. Trade Liberalization

The nature and structure of Caribbean business organisations

The Caribbean territories are characterised by mostly small developing economies. These economies
tend to be open, with little protection against more developed countries dumping unwanted goods on
them. The economies are mostly mixed and businesses range from local firms to multinationals. In
recent times some of these economies have been making strides to foster economic growth and
increase foreign direct investments. If this move is successful it may bring about improvements in
standards of living and the economic outlook for these countries. However, some of the Caribbean
countries’ efforts have been hampered by the downturn in the world’s economy in the latter part of the
first decade of the 21st century.

The environment in which these businesses operate also poses many challenges:

 Most territories are still struggling with high rates of unemployment. Where a significant
percentage of a country’s citizens is unemployed, businesses cannot make sufficient revenue as
people do not have money to spend. Some sociologists believe that there is a correlation
between high unemployment rates and social problems such as crime and violence. Where
crime escalates, investors are deterred from the country and so fewer jobs will be provided and
economic growth will be suppressed
 While some countries, such as Barbados, are doing well, others are struggling with below-
average literacy rates. Some of these countries have poor education facilities and also suffer
from overcrowding. This will impact on the future workforce who will not be employable or
marketable. Poor literacy impedes development, as citizens might be underproductive
  A large percentage of these countries depend on the agricultural sector to earn foreign
exchange. However, some of their farmers are undercapitalised and are still using old
techniques which are not bringing about sufficient yields to compete on the international scene.
Produce is at times expensive and limited. To compound the issue, imported produce has found
its way into the market, stifling some of the small farmers who cannot compete with the lower
prices. The agricultural sector is also susceptible to natural disasters which damage a number of
farms regularly. This has been highlighted as one of the factors that caused Jamaica Producers
Group Ltd to abandon banana exports, resulting in the loss of jobs
 Some businesses face the challenge of operating with outdated technology. As a result,
productivity is low and the cost of production is very high. Since at times it is difficult to secure
funding, these technologies cannot be replaced as soon as there is an improvement. Some of
these businesses have a poor capital structure and depend largely on human effort, therefore
limiting the size of their operations
 As mentioned earlier, most Caribbean economies are characterised as small and open. As a
result, businesses face competition from international companies. With the popularity of the
internet which provides easy access to these markets, Caribbean businesses are faced with
competition from both home and abroad.

The growth of multinational corporations in the Caribbean

As we discussed earlier, the Caribbean economies are mostly open and more susceptible to the impact
of globalisation than developed countries. These economies provide large international companies with
a good opportunity to expand into different markets. These companies are referred as multinationals.

A multinational or transnational corporation is one that owns and controls other business operations
outside of the country in which it is situated. The parent company usually operates out of one country
but operates other branches (subsidiaries) or factories in other countries. The branches are subjected to
the laws governing each particular country.

Examples of multinationals in the Caribbean would include C&W Ltd. Multinationals in the Caribbean
have increased steadily over the years and, in some cases, have captured a significant portion of the
total market share.

But what are the causes of this increase?

 To be close to their markets. Multinationals can cut cost and gather more accurate data if they
are operating near to their markets. Such a company would be able to understand the culture of
the market and its consumers’ buying behaviour. A company operating out of Europe might find
it easier and cheaper to open a branch in the Caribbean rather than trying to export its products
there
 Lower production cost in those countries. Locating in the Caribbean may present multinationals
with lower production costs. Some territories offer cheap labour since the supply of labour is
greater compared with its demand. In other words, the number of people seeking jobs is greater
than the number of vacancies available. In such cases wages tend to be lower than in places
 where the opposite exists. In addition, the minimum wage in most Caribbean territories is
relatively lower than in developed countries. Multinationals may also come to the Caribbean to
make use of the natural resources found there. If they can manage to get raw materials at
source, it is likely that they will be cheaper – for example, bauxite companies trading in Jamaica
and oil companies in Trinidad and Tobago
 To be shielded by tariff-protected markets. Since the inception of CARICOM, the Caribbean
region has benefited from a common external tariff (CET). This means that countries within the
free trade area trade without tariffs but all products coming into the region are subjected to a
common tariff. Multinationals can take advantage of this by setting up operations in any of the
member countries of CARICOM and enjoy free trade within the region while being protected
from competition outside the region
 Government policy. In order to foster economic growth and investments, governments may
pursue fiscal and monetary policies that encourage the growth of multinationals. This move may
also help to increase industrialisation, as some technology will spill over into existing local firms.
In order to encourage investment in the local markets, the government may offer tax holidays
and provide the necessary land space or infrastructure needed by these firms
 To avoid local laws. Some MNCs move some of their operations out of their home country in
order to avoid laws affecting them – for example, countries with antitrust laws which encourage
competition by preventing monopolies and mergers
 Most Caribbean countries have some form of restriction on imported goods. MNCs enter the
local market so as to avoid these import restrictions. Locating within the region would give them
open access to the market without having to pay to export their products to these territories.
For more information on import restrictions, see the section on protectionism.

Advantages of MNCs to the host country

 Gain foreign exchange as a result of the initial investment and exportation of products from
these companies. The Caribbean countries’ main trade currency is the US dollar. Once these
companies export their products the country will gain foreign exchange which will help to
improve the balance of payment position
 Improvement in the country’s Gross Domestic Product (GDP). GDP is the value of all final
goods and services produced within a country over a one-year period. With more output
being produced by these MNCs, the GDP of the country will increase, all other things being
equal.
 The country will experience a reduction in unemployment. Most MNCs will employ some
citizens of the country in which they are located. When this occurs, some people who are
unemployed will be able to find jobs. As more people find employment, their standard of
living should also improve
 Local firms that provide auxiliary services to large companies will also benefit from
increased business – for example, cleaning services. The construction sector may benefit
 from the construction of buildings or plants. If the investment is in the hotel and tourism
sector, the local agricultural sector may also benefit by supplying its produce to it
 The country will receive increased revenue from taxation. This will include taxes on the
company’s profit (corporation tax); increased value added (consumption) tax from increased
sales; and personal income tax from employees
 There may be an improvement in technology as the multinationals will introduce new and
improved technology which may spill over in the economy. With the introduction of new
technologies, local firms may be forced to improve their own in order to remain
competitive. As a result, there could be a general increase in output and quality of products
 Consumers benefit from increased variety as they can now choose from a wider range of
products.

Disadvantages of MNCs to the host country

 Multinational corporations are known to repatriate most, if not all, of their profits. If this is
done the host country will not benefit from profits being reinvested in it. Therefore these firms
would be using their resources to generate revenue but the country will not enjoy great
benefits as a result
 If stringent laws are not in place to protect employees, the local workforce can sometimes be
exploited. They may be asked to work long hours but receive less than equitable remuneration
 Motivated by profit, multinationals may deplete local non-renewable resources. In an attempt
to maintain production and profits, MNCs may overproduce. Countries such as Jamaica and
Guyana have seen tons of bauxite being mined each year. This mineral can take thousands of
years to form but over time the supplies have dwindled considerably. Trinidad has seen a
reduction in its oil reserve as more and more barrels are extracted year after year
 Multinationals may cause increased pollution, and little might be done to curtail it. Large plants
may emit waste in the atmosphere, depleting our ozone layer. Some MNCs may also contribute
to land and water pollution if waste is not disposed of properly
 Some local competing firms may be forced out of business as they try to compete with these
multinationals. Local firms are at times undercapitalised and have inferior technology and
equipment to these multinationals. As a result, they are not able to compete effectively. The
impact of trade liberalisation and globalisation Have you ever heard the statement that ‘the
world is a single global marketplace’? Well, that is exactly what it is now. Our markets are no
longer dominated by local products, but have been infiltrated by products from all over the
globe. Today, if you walk into a supermarket or a department store or even the corner shop in
your community, you will realise that the products available are made in a number of countries.
We can be in the Caribbean and do business with a company in Europe and have a product
couriered to the customer very quickly. All of this is made possible through trade liberalisation
and globalisation. Trade liberalisation Trade liberalisation is the removal of barriers to trade and
giving free access to the market. This access may be limited to certain products or it may be a
total lifting of the barriers to trade. These barriers are explained in the next section. The
emphasis on trade liberalisation started in the Caribbean with the formation of the Caribbean
Free Trade Association (CARIFTA) in 1965. The association’s main aims were to increase,
 liberalise and diversify trade among the member states. In 1973 CARICOM was established,
with the aim of improving on CARIFTA. One of its objectives was to include economic
integration in the region, along with each member implementing a common external tariff
(CET). Trade among the member states would be free while the region was protected by the
CET. Today, CARICOM has grown into the Caribbean Single Market and Economy (CSME). The
CSME finally came into being in 2006, having been proposed and agreed upon from 1989. The
CSME is designed to represent a single economic space where people, goods, services and
capital can move freely within the member states. Article Six of the revised Treaty of
Chaguaramas which established the CSME has outlined the following objectives

The role of government International policies may impede central governments’ ability to control the
economy. Caribbean governments may have to adhere to the policies outlined by institutions such as
the World Bank, the World Trade Organization and the International Monetary Fund (IMF), and
therefore lose their power to pursue their own macroeconomic policies With the negative impact of
globalisation on some Caribbean countries, governments now need to develop policies and find the
necessary resources to combat these negative impacts. This may put strain on the already cash-strapped
local economy Some governments may find that multinationals have grown so large that they are no
longer able to control them. These businesses may avoid taxes and contravene labour laws. In order to
reap the full benefits of globalisation or to ensure that multinationals operate in accordance with the
country’s laws, the government has to play the following roles: Facilitating or creating the right
environment. Amid the negative impact of globalisation, it can be beneficial to the country and as such
the government has a

key role to play. The country’s business environment can either impede or foster the establishment of
multinationals or the transaction of trade by global organisations. The country’s business environment
must be one that is inviting, with proper infrastructure such as road networks and communication
technology. The government should also work on lowering crime and violence which can be a deterrent
for potential investors. The government could also improve the ease with which business can be
conducted within the country – that is, removing or reducing ‘red tape’ Developing the necessary legal
framework. The government also has the responsibility for developing laws and regulations to monitor
these overseas-based companies. It has to ensure that its consumers are protected from unfair trading
practices and that they are not exploited. The legal requirements for formation must also be clearly
outlined, as these can be different from those in other countries.

Consumer behaviour

Consumers within the domestic economy will also benefit from globalisation. Some of these benefits are
outlined below: Variety of choices – consumers benefit from a greater variety of goods and services to
choose from. Since the growth of globalisation, consumers can acquire products that were not
previously available to them. These can now be accessed via e-commerce. Some of these goods may
help to improve customers’ standard of living Most of the time, consumers are on the receiving end of
increased competition. They benefit from increases in product quality and after-sales service as
companies try to outdo each other. They also benefit from lower prices if companies are involved in
price wars. Increased competition also forces businesses to become more efficient as they seek to create
brand loyalty Employment – some consumers also benefit from employment in multinational
corporations and other firms that were established through Foreign Direct Investment (FDI) Changes in
taste and preference – as the market opens to international influences, local consumers might gravitate
towards foreign products. This could influence what they eat and how they dress, among other things
Quality – some MNCs have the tendency to provide a higher-quality product to their consumers in their
homeland. However, in the absence of stringent laws or quality standards in the regional countries, they
may produce sub-standard products. To this end, consumers must ensure that they do not settle for
mediocrity but remain adamant that quality be maintained by these MNCs. Without valiant efforts by
consumers, the firm may produce and sell sub-standard products Responsibility – consumers have a
responsibility to ensure that their rights are not infringed by MNCs. Consumers must be aware of the
fact that some MNCs may run away from more stringent laws in their home countries and as such may
not provide the best service to their host countries. With this in mind, consumers should hold them
responsible for providing quality service.

Domestic businesses The impact of globalisation is felt by businesses worldwide. The impact might be
different among these businesses, though. Below are some of the possible ways in which businesses
might be affected by globalisation: Competition – businesses are likely to face increased competition
from foreign firms. As barriers are reduced and businesses are deregulated, they can enter markets that
were once difficult to get into. Globalisation also paved the way for new and innovative firms to enter
markets and compete with existing firms. This may be detrimental for some small domestic firms which
are not able to compete with large multinationals. The Caribbean is characterised by small entities that
are sometimes undercapitalised and therefore they may not be competitive Economies of scale –
domestic firms can also expand into the global market. As they do so, large-scale production brings
about economies of scale. Their fixed costs can be spread over a larger amount of output which leads to
a reduction in unit cost and a lower price. These firms may also benefit from purchasing economies as
they conduct bulk buying Technology advancement – businesses gain access to improved technology
which can be used to increase output and productivity. Advanced technology will also allow the firm to
reduce its costs of production as older technology is often inefficient and causes wastage Choice of
location – globalisation opens a number of markets that were previously inaccessible and as a result
firms can now choose to locate in different countries. Doing so may provide businesses with other
opportunities such as labour cost saving and increased sales The internet is a main driver of globalisation
and this provides businesses with numerous opportunities. With the internet through e-commerce, the
business can advertise, sell or purchase online Pricing policy – globalisation can also affect the prices
charged by domestic businesses. Where international firms are able to sell their products at a lower
price than domestic firms the latter may be forced to lower their prices. This could mean serious losses
or reduced profits for local firms Quality assurance – this is a guarantee to maintain an agreed or
established set of quality standards. Regional businesses that desire to sell their products in foreign
countries may have to seek certification to prove that these products meet international standards. Two
international standards by which the firm may be certified include the British Standards Institution (BSI)
and the International Organization for Standardization (ISO). Having certification from these bodies gives
a business a stamp of quality that will make it easier for it to trade on the international market. This
topic is dealt with further in Unit 2.
The Functions and Theories of Management (the Planning Function of
Management)
A. Evolution of Management theories (principles and contribution to modern day
organizations):
I. Classical Model- F.W. Taylor, Henri Fayol, Max Weber;
II. Human Relations Model: Elton Mayo;
III. Systems Approach- open/closed/synergy/ entropy.
IV. Contingency Approach

B. Functions of Management (Definition and Application):

I. Planning
II. Organizing
III. Leading
IV. Controlling
V. Staffing

The major management theories

The classical theories

This form of management theory dates from as far back as the Industrial Revolution when it was
adopted to deal with the new problems that had emerged. Managers found it difficult at the time to
train employees and decrease dissatisfaction. This led to the development of classical theories as they
tried to find a proper solution. The work of three main classical theorists will be discussed in this section,
namely Frederick Taylor, Henri Fayol and Max Weber.

Scientific Management: Frederick W Taylor (1856–1915)

Frederick Taylor is usually regarded as the father of Scientific Management. During the time of the
development of this theory most managers had little contact with the activities of the factory. Instead,
foremen were given full control to produce the goods that were in demand. Workers would generally
use the available tools and developed methods that fitted their style of work. This had become
counterproductive and inefficient, and workers were often dissatisfied. The existing situation sparked
the interest of Taylor, who wanted to improve productivity and reduce inefficiencies in the US
manufacturing sector. He started his study at Midvale Steel Company and found out that there was
confusion between management and workers on what constituted ‘a day’s work’. He carried out
numerous experiments, called work studies, in order to determine the best way to perform a job. Taylor
viewed man as an ‘economic animal’, meaning that he was rational and made economic choices based
on the monetary or material reward to be gained. This view of the economic man led him to develop
payment systems which linked efforts with the rewards received. This was done using a piece rate
system. Taylor’s study outlined ways in which managers could use the principles of his theory to
improve productivity. His theory suggested that work should be broken down into smaller components
or tasks to enable workers to specialise and become competent at those tasks. Taylor outlined four
principles of Scientific Management: Develop a scientific study of management, with stated rules, laws
and principles to replace the outdated ‘rule of thumb’ methods Workers should be selected
scientifically, trained and developed as opposed to past practices where they were selected randomly
and usually untrained Cooperate with workers in order to ensure that work is done in accordance with
the prescribed scientific principles

There should be an equal division of tasks and responsibilities between managers and workers. This will
allow managers to apply Scientific Management principles in planning the work that will be performed
by the workers. For the most part, these principles had some level of success. According to research
done, they were implemented in many factories and would often increase overall productivity. In
addition to his four principles of management, Taylor used the following elements of Scientific
Management to manage his staff effectively: The separation of planning from the actual performance of
the task Carefully selecting workers to carry out a task on a scientific basis Closely observing workers
doing the task, and documenting findings Carrying out job analysis to ascertain the best way of
completing a task Standardisation of the process involved in carrying out the task based on the job
analysis Assigning foremen to supervise workers, based on specialisation of functions Fostering a
suitable environment to encourage cooperation between management and workers Providing financial
incentives to motivate workers and pay them based on performance. This theory enjoyed the following
successes: Factories that implemented his approach benefited from increased productivity Some
organisations benefited from increased profits His theory led to the development of fields such as
industrial engineering, personnel and quality control. Some drawbacks of Taylor’s theory are: Identifying
the ‘best way’ to do a job often made the task monotonous, dampening autonomy and skill variety
Some people were opposed to the use of stopwatches to assess the work done in a day His view of the
economic man was heavily criticised because humans were likened to machines and would only be
satisfied by money

Administrative Management: Henri Fayol (1841–1925)

Henri Fayol is also a classical theorist and is regarded as the ‘father of modern management’.

His theory of Administrative Management was developed around the same time as Taylor’s but he did
not focus on the workers. Instead, he focused on management from the upper level of administration.
He concluded that business activities are divided into six interdependent groups which managers should
coordinate so as to achieve the organisation’s goals: Technical – including manufacturing, production
and adaptation Commercial – including buying and selling Financial – sourcing and utilising capital
Security – extending to both property and individuals Accounting – inventory, final accounts and
statistics Managerial – including his five functions of management, which are discussed below. Fayol’s
five functions of management are outlined as follows: Planning – involves the establishment of
objectives and development of strategies to achieve them. Managers should also be able to anticipate
future events and plan accordingly Organising – this deals with the delegation of responsibilities to
subordinates in order to get the job done Commanding – giving clear instructions to workers and
ensuring that the business is operated effectively Coordinating – the manager should ensure that all
groups within the organisation are working toward a common goal Controlling – ensuring that activities
are being done according to plan. The manager monitors the performance of the staff against the
prescribed rules and procedures. Incidentally, some of the functions Fayol proposed became well known
and accepted as the main functions of management. These will be discussed in more detail later in the
chapter. In addition to the five functions of management, Fayol outlined 14 principles of management
which should help the manager to run a business smoothly. These are: Division of labour – work should
be divided into smaller tasks to promote specialisation. This should increase efficiency, productivity and
output Authority and responsibility – managers should be given the authority and autonomy to carry out
their responsibilities Discipline – all levels of managers should be disciplined in order to accomplish their
tasks. Discipline will help them to develop obedience, diligence, energy and respect for all Unity of
command – in order to prevent confusion, subordinates should take command from and report to only
one supervisor Unity of direction – activities of the same nature should be supervised by one manager
who will guide subordinates to achieve the same objective Subordination of individual interest to
general interest – the interest of an individual or group should not override the interest of the
enterprise as a whole Remuneration – workers should receive fair payment for work done Centralisation
– this deals with the way in which decisions are made. The degree of centralisation in decision making
should be based on the circumstances being faced by the organisation Scalar chain – there should be a
clear line of authority from the highest to the lowest level in the organisation. In other words, there
should be an organisational hierarchy with a manageable span of control Order – all resources (people,
raw material, tools, equipment, etc.) in the organisation should be carefully and properly ordered to
ensure efficiency Equity – employees should be treated fairly and justly. Managers should not
discriminate but be kind, honest and impartial to every employee Stability of tenure of personnel –
labour turnover rate is an indication of the effectiveness of management. This rate should be minimised
so that each employee can grow and propel the organisation towards achieving its goals Initiative –
workers should be encouraged to generate ideas and develop plans that will benefit the organisation.
This will also help the employees to develop their personal skills and abilities Esprit de corps – this
means a ‘spirit of cooperation’. Employees and managers should develop good team spirit and morale.
Unity and harmony should be promoted in order to strengthen the organisation. Fayol’s 14 principles of
management are still being used in some organisations today. They guide managers on how to supervise
subordinates and organise their departments or firms.
Theory and Application of Motivation (Causes and Effects of Motivation)
A. Factors that stimulate and influence motivation; individual needs; self
motivation; ability to make choices; environmental opportunities.
B. Theories of Motivation: Maslow’s Hierarchy of Needs; Herzberg’s Hygiene
Theory.
C. Financial and non-financial motivational strategies:
I. Financial incentives: payment systems and their effectiveness;
appraisal; job valuation and work study
II. Non- financial incentives: individual job needs; participation; job
satisfaction, job enrichment and job enlargement; opportunities for
promotion.
D. Implication to managers; getting the best out of individuals; appreciation of
work and appropriate reward systems.
Theories of Leadership
A. Definition of leadership
B. Leadership Theory: McGregor’s Theory X and Theory Y; Trait Theory
C. Leadership skills including:
I. Communication
II. Problem- solving; critical thinking.
D. Leadership styles (definition, appropriateness
I. Autocratic
II. Participative/democratic
III. Laissez faire
IV. transformational
E. Informal leadership; its influence on the organization:
I. Definition of informal leadership.
II. adv
Sources of Finance
Components of Financial Statements
Financial Statements Analysis