The basics of business management – vol i

ELLY R TWINEYO KAMUGISHA THE BASICS OF BUSINESS MANAGEMENT – VOL I LEADERSHIP, FINANCIAL MANAGEMENT AND ECONOMICS Download free eBooks at bookboon.com The Basics of Business Management – Vol I: Leadership, Financial Management and Economics 1st edition © 2017 Elly R Twineyo Kamugisha & bookboon.com ISBN 978-87-403-1594-3 Peer review by Timothy Esemu (PhD) Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I CONTENTS CONTENTS The Basics of Business Management – Vol I: Leadership, Financial Management and Economics Part I: Leaders And Managers Introduction to management and leadership Part II: Financial Management 29 Management of Cash 30 Credit Management 36 Management of Working Capital 37 Financial ratios and investment analysis 49 www.sylvania.com We not reinvent the wheel we reinvent light Fascinating lighting offers an ininite spectrum of possibilities: Innovative technologies and new markets provide both opportunities and challenges An environment in which your expertise is in high demand Enjoy the supportive working atmosphere within our global group and beneit from international career paths Implement sustainable ideas in close cooperation with other specialists and contribute to inluencing our future Come and join us in reinventing light every day Light is OSRAM Download free eBooks at bookboon.com Click on the ad to read more THE BASICS OF BUSINESS MANAGEMENT – VOL I CONTENTS Part III: Microeconomics 103 Introduction 104 Supply and Demand 110 Theory of Production 134 Market Structures and Competition 156 Part IV: Macroeconomics 169 Introduction 170 Economic Growth and Economic Development 171 10 Population, Unemployment and the Labour Market 191 11 International Trade 196 12 National and International Competitiveness 209 13 Consumption, Saving and Investment 224 14 Money, Banking and the Financial System 231 15 Public Finance and Fiscal Policy 251 16 Foreign Aid 262 Endnotes 268 The Basics of Business Management – Vol II: Marketing, Logistics, Procurement and Law Part I: Marketing and International Business Vol II The Marketing Environment Vol II The Marketing Mix Vol II Consumer Behaviour Vol II Market Segmentation Vol II Branding Vol II Services Management Vol II Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I CONTENTS Relationship Marketing Vol II Industrial Marketing Vol II International Marketing Vol II Part II: Logistics Management Vol II 10 Logistics Management Vol II 11 Reverse Logistics Vol II 12 International Logistics Vol II Part III: Procurement Vol II 13 Procurement and Disposal Management Vol II 14 Outsourcing Vol II 15 e-Procurement Vol II 16 Project Procurement Vol II Part IV: Legal Issues in Business Management Vol II 17 Law of Contract Vol II 18 Sale of Goods Act and Supply of Goods and Services Act Vol II 19 Agency and Bailment Vol II 20 Intellectual Property Rights Vol II 21 Insurance Vol II Endnotes Vol II Download free eBooks at bookboon.com PART I: LEADERS AND MANAGERS Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I INTRODUCTION TO MANAGEMENT AND LEADERSHIP INTRODUCTION TO MANAGEMENT AND LEADERSHIP In this introductory part, we will begin by understanding the basic deinitions of the concepts What is an organisation? We can simply refer to an organisation as a collection of people working together to achieve a common goal hese people are working together to achieve a common purpose, which is usually the organisation’s set objectives Working together, people are able to accomplish tasks that one individual would not have been able to Organisations are supposed to have a vision, mission, goals and objectives hey undertake various activities which emanate from those goals Some scholars have asserted that organisations are systems of inter-dependent human beings1 Organisations are supposed to what an individual human being would not or achieve alone What is management? Several deinitions of management have been given According to Peter Drucker (1955)2, a management guru, management is concerned with a systematic organisation of economic resources to make these resources productive Other deinitions look at what management does Such deinitions refer to management as the process of planning, organising, leading and controlling the eforts of organisation members and using all other organisational resources to achieve stated organisational goals3; Organisational behaviour: To understand organisations and management, we need to irst understand organisational behaviour his is a multi-disciplinary ield which studies the individual, group and organisational processes in order to know the behaviour of people in an organisational setting here are various deinitions of the concept Pheysey et al (1971)4 referred to organisational behaviour as “the study of structure, functioning and performance of organisations and the behaviour of groups and individuals within them”.5 Leadership: his is a common term But what does it mean? If you asked a group of top executives in any part of the globe why organisations succeed, you will most likely hear them all say “executive leadership.” Indeed, leadership is the way to success for all organisations – business, politics, sports and the family In fact Aristotle, the philosopher, advised that if you cannot lead and manage your family, you should not aspire to enter politics Indeed, he viewed the ancient Greek polis (ancient Greek city state) as starting from family to forming villages and inally the city state (e.g ancient city state of Athens) Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I INTRODUCTION TO MANAGEMENT AND LEADERSHIP We can deine leadership as the process of directing and inluencing others to achieve group goals hese groups are usually in organisations Leaders are usually people who have a lot of inluence over others Regarding leadership, we could note the following: i A leader inluences other people who may be followers or subordinates; ii here is unequal distribution of power between the leader and those that are led (the group mates); and iii Leadership involves using diferent types of power to inluence the subordinates’ behaviour Qualities of leadership: here are various studies that have suggested qualities that people often associate with leadership We shall look at the following (Fiedler 19676): • Has vision and is committed to the purpose or goals of the organisation; • Guiding others through providing a role model and through willingness to serve others irst; • Optimism – Very few pessimists become leaders; • Dedication of one’s life to serve a cause; • A clear sense of purpose; • Self-knowledge; and • Ability to encourage and nurture those that report to them Leadership styles: Tannenbaum and Schmidt (1973)7 developed a leadership style continuum grouping leaders into three categories Based on the use of authority, leaders can be referred to as the following: i Autocratic – A leader who commands and expects compliance without question Such a leader is dogmatic and is willing and able to give or withhold rewards or administrative punishments; ii Participative (or democratic) – A leader who consults with subordinates on the proposed decisions and actions and encourages participation from those subordinates; and iii Free Rein (laissez-faire) – Leaders who use very little if at all of their power but instead give their subordinates a high level of independence in their work Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I Leadership style INTRODUCTION TO MANAGEMENT AND LEADERSHIP Behaviours demonstrating leadership style Autocratic • Leader take decisions without reference to anyone else • There is a high degree of dependency on the leader because staff are not encouraged to make suggestions on the running of the organisation • This style can demotivate staff and result in a high staff turnover Democratic • Leaders encourage discussion and debate throughout the group before inal decisions are actually – and implemented • Leaders consult and also persuade the team before implementing a decision • This approach motivates staff as they feel involved in the process of decision-making • This can improve development and sharing of ideas and experiences within the organisation Laissez-faire • Leaders exhibit ‘let it be’ as it is – leadership responsibilities are shared by all – and the leader leaves it to the group • This approach is useful in entities where creative ideas are important • Can be highly motivational as people have control over their own working life, without unnecessary restrictions from authority • This approach relies on good team and on good interpersonal relations between the group Table 1: Leadership styles McGregor’s heory X and theory Y Douglas McGregor (1960)8, in his book – he Human Side of Enterprise – broadly set out two approaches to human nature which he termed heory X and heory Y McGregor believed that the way people were managed afected their work behaviour and attitudes He proposed a consultative approach to management as a way to encourage heory Y behaviour among staf According to him, heory X places exclusive reliance upon external control of human behaviour, while heory Y relies more on self-control and self-direction Download free eBooks at bookboon.com 10 ... Vol II International Marketing Vol II Part II: Logistics Management Vol II 10 Logistics Management Vol II 11 Reverse Logistics Vol II 12 International Logistics Vol II Part III: Procurement Vol. .. Segmentation Vol II Branding Vol II Services Management Vol II Download free eBooks at bookboon.com THE BASICS OF BUSINESS MANAGEMENT – VOL I CONTENTS Relationship Marketing Vol II Industrial Marketing... – Vol II: Marketing, Logistics, Procurement and Law Part I: Marketing and International Business Vol II The Marketing Environment Vol II The Marketing Mix Vol II Consumer Behaviour Vol II Market