ARBUS - Notes PPTs (1) PDF

ARBUS HINT HINT: chapter 1 Free trade is when countries exchange goods and services without barriers. Key terms: ​ Exporting: Selling products to another country. ​ Importing: Buying products from another country. ​ Balance of Trade: The difference between exports and imports: ○​...

ARBUS HINT HINT: chapter 1 Free trade is when countries exchange goods and services without barriers. Key terms: ​ Exporting: Selling products to another country. ​ Importing: Buying products from another country. ​ Balance of Trade: The difference between exports and imports: ○​ Trade surplus: More exports than imports (good). ○​ Trade deficit: More imports than exports (less good). ​ Balance of Payments: Tracks all the money coming in (exports, tourism) and going out (imports, investments). Key Concepts on Global Markets: 1.​ Diversification of Markets: Countries like Canada try to trade with others, not just the U.S., to reduce risks. 2.​ Exporting Techniques: ○​ Indirect Exporting: Using middlemen (less control, less risk). ○​ Direct Exporting: Selling directly (more control, more risk). 3.​ Protectionism: Some countries, like the U.S., use tariffs to protect their industries. 4.​ WTO's Role: The World Trade Organization helps manage global trade and resolve disputes. 5.​ USMCA Agreement: A trade deal between the U.S., Mexico, and Canada, which replaced NAFTA, focusing on digital trade, intellectual property, and worker rights. Key Takeaways: ​ Diversifying trade improves economic stability. ​ Understanding exporting strategies helps businesses enter global markets. ​ Knowing protectionist measures and trade regulations is important. ​ The WTO helps settle trade disputes. ​ USMCA focuses on modernizing trade between North American countries. Module 2 notes: Crown corporations and what are under it: ​ Companies owned by the federal or provincial government. -​ They are businesses owned by the government, like Canada Post or CBC news. They provide important services to the public, that private companies might not offer. Privatization: selling publicly-owned corporations Ex: air canada, when the government sells a business or service it owns to private companies or individuals. Laws and Regulations and what are under it: Rules set by the government to make sure businesses operate fairly, protect consumers, and maintain safety. They help create a level playing field for companies but can also make it more expensive to run a business. Laws and regulations ​ Deregulation: government withdrawal of laws and regulations that hinder competition. -​ Ex: Deregulation means the government removes certain rules and laws that make it harder for businesses to compete. By doing this, smaller businesses have more freedom to operate and can compete more easily with each other. consequences of deregulation? -​ Is Greater freedom for smaller businesses to compete Laws and regulations Each level of government has their own unique set of responsibilities that have an impact on business operations -​ Federal Responsibilities: Canada: Trade Regulations (Interprovincial and International): ​ Sets trade rules between provinces and countries.  Banking and Monetary System: ​ Manages the country's money and interest rates. National Defence: Oversees the military and national security. Immigration: Sets rules for those who can enter and live in Canada. Consumer Protection: Protects consumers from unfair business practices. Provincial Responsibilities: Ontario: Regulation of Provincial Trade and Commerce: Sets rules for businesses within the province. Health Care: Manages and funds health services. Employment Standards and Labour Laws: Establishes rules for working conditions and employee rights. Education: Manages schools and educational programs. Municipal Responsibilities: Region waterloo: Utilities/Infrastructure: Manages local services like water and roads. Play a Role in Consumer Protection: Enforces local business standards. Regulating Food Establishments: Oversees local restaurants and food vendors for safety. Zoning Laws, Parking Regulations, Building Codes: Sets rules for land use, parking, and construction. What side are you on? A. Government should reduce its involvement in business through further privatization and deregulation and let the market take care of itself because... B. Government should continue to influence the market with activities that keep our economy stable, support Canadian business and keep consumers safe because... Reasons government should provide subsidies (granting money to private or public businesses: ​ Encourage Production ​ Support employment ​ Support new/developing industries - (like technology factories, supporting new tech companies.) ​ Encourage social goals - improve of internet for families to connect -​ There is lose on both sides Reasons government should not interfere in the private sector: ​ Misallocation of resources - like price control ​ Market Distortions ​ Dependency or moral hazards ​ Reduced Competition Module 3: Key Concepts with Examples Distinction Between Entrepreneurship and Small Business: Entrepreneurs: Seek to create something larger than themselves, often involving innovation and higher risk. -​ Example: A tech startup founder who develops a groundbreaking app. Small Business Owners: Typically focus on steady growth and serving an established customer base. -​ Example: A local coffee shop owner serving regular customers. Reasons for Starting a Small Business: -​ Desire for independence and control. -​ Potential for profit and personal challenge. -​ Influence of family patterns and immigrant experiences. Example: An immigrant starting a restaurant to share their cultural cuisine. Opportunities presented by new ideas or processes. -​ Example: A developer launching a new online tutoring platform. Importance of Small Business in Canada: ​ Represents 98.2% of all businesses.  ​ Example: A small landscaping company serving local homeowners. ​ Employs approximately 69.7% of private sector workers. Example: A small retail store hiring local staff. ​ Contributes significantly to job creation and economic output. -​ Example: A small manufacturing firm producing goods for local markets. Challenges Faced by Small Businesses: -​ Competition from larger firms. ​ Example: A small bookstore competing with large online retailers. -​ Access to financing and understanding market dynamics. ​ Example: A startup struggling to secure a bank loan. -​ Managing time and resources effectively. ​ Example: A small business owner balancing multiple roles. Starting a Small Business: ​ Options include starting from scratch, buying an existing business, or purchasing a franchise (existing business recognized by everyone). Example: ​ From Scratch: A person starting a handmade soap business. ​ Buying an Existing Business: Purchasing a local gym with established members. ​ Franchise: Opening a Tim Hortons location, or Mcdonalds. Importance of a solid business plan covering market analysis, financial projections, and operational strategies. -​ Example: A new restaurant owner creating a detailed business plan to attract investors. Managing a Small Business: Key areas include marketing, finance, operations, and human resources. -​ Example: A small restaurant owner managing staff schedules and inventory. Common pitfalls include unrealistic financial projections and lack of market research. -​ Example: A startup that overestimates its first-year sales without proper research. Global Opportunities: Small businesses can benefit from larger markets and economies of scale. -​ Example: A small craft brewery exporting its products to international markets. Challenges include cultural understanding and regulatory compliance. -​ Example: A small business navigating export regulations in a new country. Intrapreneurship: ​ Refers to entrepreneurial activities within a corporation. -​ Example: An employee at a tech company developing a new software feature. Encourages innovation and risk-taking among employees. -​ Example: A corporation allowing employees to pitch new product ideas. Module 4: Study Note on Productivity and Operations Management Understanding Productivity Definition: Productivity is the relationship between inputs (resources) and outputs (products/services). It focuses on delivering more with the same or less input. ​ Inputs: Labor, land, capital, and other resources. ​ Outputs: The physical products or services delivered. Example: The evolution of cell phones from bulky devices in the 90s to sleek smartphones today illustrates increased productivity through better design and technology. 1 Improving Quality and Reducing Costs ​ Economies of Scale: Achieved by outsourcing parts manufacturing, allowing suppliers to provide the same parts to multiple companies, thus lowering production costs.​ Example: Automotive companies like Linnemar or Banga International supply parts to various car manufacturers, driving down costs through shared resources. 2 Lean Manufacturing ​ Concept: Lean manufacturing focuses on minimizing waste and maximizing efficiency in production processes.​ Example: Positioning workstations close together to reduce movement waste, thereby lowering production costs. 3 Operations Management ​ Definition: Operations management applies to both product and service delivery, evolving from traditional production management to a broader focus on operational efficiency.  ​ Key Responsibilities: ​ Operations Planning: Planning the production process effectively. ​ Efficiency Improvement: Streamlining processes to reduce costs and improve turnaround times. ​ Example: Southwest Airlines optimizes turnaround time by allowing passengers to choose seats after boarding, maximizing aircraft utilization and profit. 4 Summary ​ Productivity is about the relationship between inputs and outputs. ​ Improving quality while reducing costs can be achieved through economies of scale and lean manufacturing. ​ Operations management is crucial for both products and services, focusing on efficiency and planning. Module 4-5: 1. Site Selection for Operations Manager ​ Operations managers prioritize easy access to infrastructure (airports, highways, railroads) to ensure efficient time to market 1. ​ Government support, such as grants and loans, is essential for business development, with incentives available for specific sectors (e.g., microchip processing) 2. 2. Facility Layout ​ Facility layout involves the physical arrangement of resources, focusing on workflow efficiency and customer orientation. Internal customers (employees) and external customers (clients) must be considered 3. ​ Example: In a bakery, the layout includes customer-facing displays and the efficient arrangement of ovens and materials in the back 4. 3. Types of Layouts ​ Process Layout: Groups similar equipment together, allowing flexibility in production. This layout supports customization and can handle various products 5. ​ Modular Layout: Teams perform multiple tasks, enhancing adaptability and skill development 6. ​ Project Layout: Workers gather around a stationary product, suitable for large projects like buildings or airplanes 7. 4. McDonald's Case Study  ​ McDonald's exemplifies lead manufacturing with innovations that reduced burger preparation time from 30 minutes to 30 seconds 8. ​ Their layout combines process layout with assembly line elements, optimizing efficiency and productivity 9. 5. Operations Planning and Control ​ Operations planning involves determining material needs and sourcing high-quality inputs. ERP systems assist in this process 10. ​ The decision on the number of suppliers affects quality control and bargaining power. Fewer suppliers can lead to stronger relationships, while more suppliers provide options and risk management 11. 6. Inventory Control ​ Just-in-time inventory minimizes holding costs but requires reliable suppliers to avoid disruptions 12. ​ Risks include potential delays and increased costs if suppliers fail to deliver on time 13. 7. Quality Control ​ Quality means consistently meeting customer expectations with minimal errors. It is tied to an organization's reputation 14. ​ Six Sigma aims for only 3.4 defects per million opportunities, promoting continuous improvement 15. ​ ISO certifications enhance credibility and ensure adherence to quality standards 16. 8. Total Quality Management (TQM) ​ TQM involves empowering all employees to identify and improve processes, focusing on continuous improvement 17. ​ Prevention and inspection costs are essential for maintaining quality and avoiding defects 18. 9. Cost of Quality ​ Internal failure costs arise when defects are caught internally, while external failure costs occur when defective products reach customers 19. ​ Investing in quality management prevents costly recalls and maintains customer trust 20. 10. Example of Quality Failure ​ The TechHata airbag recall illustrates the severe consequences of poor quality control, resulting in significant financial and moral ramifications 21. 11. Conclusion  ​ Operations managers must balance efficiency, quality, and supplier relationships to optimize production processes and meet customer demands effectively. Operational manager duties: make sure workflow, productivity, make best use of resources, meet customer demand efficiently. Effective production of goods and services. How do future employees and business leaders prepare for changes in business operations? Future employees and business leaders should: ​ Continue learning ​ Keep up with new technologies ​ Strong communication skills ​ Teamwork collaborate. ​ Understand data analytics ​ Be open to feedback and innovation Marketing's 4 P’s: -​ Product: a good or a service is also known for a product. Or an idea that satisfies a want/need. Like test marketing (samples in costco) and surveys I do at the end of work. -​ Involve customers through feedback like different flavour of chips, bbq etc. Some go high in demand, others don't. -​ Price: Money or gold, exchange for ownership or use of good/service. Reducing prices, SALES etc, to attract customers, psychological impact. -​ Place: Online shopping, have goods like meat to your truck (no need to go inside shop). Amazon, Shein, - due to growth of technology, grab and go AMAZON GO - walk take good walk out charging automatically. -​ Promotion: Coupons, Ads in u-tube - companies attracting ppl’s attention, Cost-benefit - is it cheap for a company to do the ad or no will demand will be high will it go viral (not always they have to do cost benefit.) Combine 4 p’s create marketing mix -​ Continue relationship with customer, have their trust and loyalty, continuous process adaptability. Marketing research process -​ Define - ( action, what it is meant to be) -​ Collect - (gather) -​ Choose - (make decision, choosing) -​ Analyze - (details, information) Module 5: ai note Marketing Overview Evolution of Marketing Production Era (Late 1800s - Early 1900s): ​ Main Idea: Focused on making as much as possible. ​ Why: There was more demand than supply, so marketing wasn’t a big deal. Sales Era (1920s): ​ Main Idea: Emphasized selling and advertising. ​ Why: Better production led to too many products, so businesses needed to convince customers to buy. Marketing Concept Era (Post-World War II): ​ Main Idea: Focused on making customers happy. ​ Why: Businesses wanted to provide the right products for the right customers. Market Orientation Era: ​ Main Idea: Used data to understand customers better. ​ Why: The goal was to build customer loyalty and encourage repeat purchases. Key Concepts ​ Customer Relationship Management (CRM): ​ What It Is: Tools (like Salesforce) that help businesses keep track of what customers like and want to build loyalty. Customer Engagement ​ Social Media Impact: ​ Change: Social media allows businesses to target ads and engage directly with customers.  ​ Challenges: It can be tough to manage brand reputation and keep customer trust. Cause Marketing ​ What It Is: Partnerships between for-profit and non-profit organizations to improve brand image while supporting social causes. ​ Examples: Companies like TOMS and Tim Hortons give part of their sales to charities. Product Testing ​ Concept Testing vs. Test Marketing: ​ Concept Testing: Getting feedback on product ideas. ​ Test Marketing: Trying out actual products to see how customers react. Conclusion Knowing the evolution of marketing, key concepts, and how to engage customers is essential for successful marketing today. Module 5: know B2B and B2C but can also be both at times. See ppt 4 differentiators: Demographic: Grouping people by age, gender, income, education, etc. Geographic: Segmenting based on where people live (city, country, region). Behavioural: Dividing people based on how they act, like buying habits or product usage. Psychographic: Sorting people by lifestyle, interests, and values. Module 6: Product terminology: Product mix: combination of all products. Like a company that sells baby food, detergents, clothing. Product line: products that are physically similar or intended to have a similar market. (ex: shampoo, hair spray, skincare). Product differentiation: like physical deference or perception, like shape of water bottle, glass bottle fancy couple cent more expensive. Packing design - apple sauce kids eat themselves - parents don't waste time feeding them. Key Concepts ​ Total Product Offer: This refers to the complete product experience that includes tangible and intangible elements influencing a customer's buying decision. It encompasses everything a customer considers when making a purchase, such as brand image, convenience, and past experiences 1. Tangible vs. Intangible Qualities ​ Tangible Qualities: These include physical aspects like packaging, price, and delivery method. For example, the packaging of a product can significantly impact consumer perception 2. ​ Intangible Qualities: These involve brand and image, convenience, and previous experiences with the product. For instance, the reputation of a university can influence a student's decision to enroll 3. Product Lines and Differentiation ​ Product Line: A group of products that are related either by function or target market. Companies like Procter & Gamble have various product lines, such as soaps and laundry detergents 4. ​ Product Differentiation: This can be based on real or perceived differences. It aims to appeal to specific target markets and influence purchasing decisions. For example, premium products may be marketed as environmentally friendly to justify higher prices 5. Packaging Functions ​ Attract Attention: Packaging must stand out to catch consumer interest 6. ​ Protection: It should protect the product during shipping and storage 7. ​ Convenience: Packaging should be user-friendly and easy to store 8. ​ Descriptive: It should clearly describe the product's contents 9. Branding and Brand Equity ​ Brand: A name, symbol, or design that distinguishes a product from competitors. Brands can enhance perceived quality and customer loyalty 10. ​ Brand Loyalty: The degree to which customers are committed to repurchasing a brand 11.  ​ Brand Equity: The overall value of a brand, shaped by consumer perceptions and their willingness to pay a premium 12. Pricing Strategies ​ Cost-Based Pricing: Setting prices based on production costs plus a desired profit margin 13. ​ Demand-Based Pricing: Pricing based on what consumers are willing to pay 14. ​ Competition-Based Pricing: Setting prices based on competitors' pricing strategies 15. ​ Psychological Pricing: Using price points that make products appear cheaper, such as ending prices with 0.99 16. Break-Even Analysis ​ Break-Even Point: The point at which total revenues equal total costs, allowing businesses to determine profitability 17. ​ Fixed Costs: Costs that do not change regardless of production levels, such as rent 18. ​ Variable Costs: Costs that vary with production levels, such as materials 19. Consumer Behavior and Marketing ​ Consumer Preferences: Understanding that consumers may not always know what they want can guide product development 20. ​ Market Trends: Companies must adapt to changing consumer preferences and market conditions to maintain brand value 21. Ai note: Key Concepts in Marketing and Retail 1. Mobile Payments ​ In China, mobile payments are widely adopted, primarily through two mega apps: WeChat and Alipay. This has led to a significant reduction in cash usage 1. ​ In contrast, Canada has been slower to adopt mobile payment strategies, although usage has increased since COVID 2. 2. Marketing Intermediaries ​ Marketing intermediaries are organizations that facilitate the movement of goods from producers to consumers. They are less common in B2B markets, which tend to have more direct sales 3. ​ Different types of intermediaries include: ○​ Transport Providers: Physically move products (e.g., trucking companies) 4. ○​ Agents and Brokers: Assist in negotiations without taking ownership of goods (e.g., real estate agents) 5. ○​ Wholesalers: Purchase large quantities and sell to retailers or other businesses 6. 3. Distribution Strategies ​ Intensive Distribution: Products are placed in as many outlets as possible (e.g., convenience goods) 7. ​ Selective Distribution: A preferred group of retailers is used to maintain quality (e.g., furniture) 8. ​ Exclusive Distribution: Only one retailer in a geographic area has the rights to sell a product (e.g., luxury watches) 9. 4. Promotion Strategies ​ Public Relations (PR): Managing the public perception of a company, often through community events and media 10. ​ Advertising: Paid communication through media, aimed at reaching a broad audience 11. ​ Sales Promotion: Short-term activities to stimulate purchasing, such as coupons or loyalty points 12. 5. Product Life Cycle ​ The product life cycle includes four stages: introduction, growth, maturity, and decline. Strategies vary based on the stage 13. ​ Pricing Strategies: ○​ Skimming Pricing: High initial price to maximize profits before competition enters 14. ○​ Penetration Pricing: Low initial price to attract customers and discourage competition 15. 6. Direct Marketing ​ Techniques like direct mail and email link manufacturers directly to consumers. Challenges include maintaining a comprehensive customer database and privacy concerns 16. 7. Word of Mouth and Buzz Marketing ​ Word of mouth significantly influences buying decisions, with 93% of decisions impacted by consumer feedback 17. ​ Buzz marketing aims to maximize the potential of positive word of mouth in promotional campaigns 17. 🙁 Module 7 Study Guide: Understanding Accounting and Financial Information - PPT note, no recording Key Definitions ​ Accounting: The process of recording, classifying, summarizing, and interpreting financial transactions to provide management and stakeholders with necessary information for decision-making. 1 ​ Financial Statements: Reports that summarize the financial condition and performance of a business, including: ○​ Balance Sheet: Shows assets, liabilities, and owner's equity at a specific point in time. 2 ○​ Income Statement: Reports revenues and expenses over a period, showing profit or loss. 3 ○​ Cash Flow Statement: Details cash inflows and outflows from operating, investing, and financing activities. 4 ​ Stakeholders: Individuals or groups interested in a company's financial performance, including internal (management) and external (investors, creditors, government). 5 Important Summary ​ Role of Accounting: Provides critical information for decision-making, helping stakeholders understand financial health and performance. 1 ​ Accounting Disciplines: ○​ Managerial Accounting: Focuses on internal reporting for management decisions. 6 ○​ Financial Accounting: Prepares financial statements for external stakeholders. 6  ○​ Compliance Accounting: Ensures adherence to laws and regulations through audits. 7 ​ Fundamental Accounting Equation: ​ Assets−Liabilities=Owner’s Equity ​ This equation underpins the balance sheet and reflects the company's financial position. 8 ​ Financial Ratios: Used to assess a firm's financial condition, including: ○​ Liquidity Ratios: Measure ability to meet short-term obligations (e.g., Current Ratio). 9 ○​ Leverage Ratios: Assess the degree of reliance on borrowed funds (e.g., Debt to Equity Ratio). 10 ○​ Profitability Ratios: Evaluate how effectively resources are used to generate profit (e.g., Return on Equity). 11 ​ Accounting Principles: Guidelines for consistent reporting, including GAAP and IFRS, ensuring accuracy and comparability in financial statements. 12 ​ Cash Flow Management: Understanding cash flow is crucial for maintaining liquidity and operational efficiency. 13 This study guide encapsulates the essential concepts from Module 7, providing a clear overview of accounting principles, financial statements, and the role of accounting in business decision-making. Module 7 and 8: ai note: Study Guide: Financial Management Concepts 1. Measurement and Recognition Principles ​ Measurement Principle: Relates to capital assets, which are used over many years. Instead of expensing the entire cost in the first year (e.g., a $30,000 vehicle), the cost is capitalized and depreciated over its useful life 1. ​ Recognition Principle: Revenue is recorded when goods are sold or services are delivered, not when cash is received. For example, if a product is sold on credit, the revenue is recognized at the time of sale, not when the cash is collected 2. ​ Matching Principle: Expenses are matched to the revenues they generate. For instance, the cost of materials for cookies is recorded when the cookies are sold, not when the materials were purchased 3. 2. Financial Statements ​ Balance Sheet: Shows the financial position at a specific date, using the formula: Assets - Liabilities = Owner's Equity. It includes current assets, capital assets, and intangible assets 4. ○​ Current Assets: Used within a year (e.g., cash, accounts receivable) 5. ○​ Capital Assets: Used over a longer period (e.g., delivery trucks) 5. ○​ Intangible Assets: Non-physical assets like brand equity 5. ​ Income Statement: Reflects financial performance over a period, detailing revenue, cost of goods sold, gross profit, operating expenses, and net income 7. ○​ Revenue: Total sales value 7. ○​ Cost of Goods Sold: Direct costs of producing goods 8. ○​ Gross Profit: Revenue minus Cost of Goods Sold 9. ​ Cash Flow Statement: Details cash inflows and outflows, categorized into operating, investing, and financing activities 10. 3. Ratio Analysis ​ Liquidity Ratios: Assess the ability to pay short-term liabilities. ○​ Current Ratio: Current Assets / Current Liabilities; a ratio of 2:1 is considered safe 12. ○​ Quick Ratio: (Current Assets - Inventory) / Current Liabilities; excludes inventory to assess short-term liquidity 26. ​ Leverage Ratios: Measure reliance on debt. ○​ Debt-to-Equity Ratio: Total Liabilities / Owner's Equity; indicates risk level 14. ​ Profitability Ratios: Evaluate profit generation. ○​ Earnings Per Share (EPS): Net Income / Number of Shares Outstanding 27. ○​ Return on Sales: Net Income / Revenue; indicates cost management efficiency 16. ○​ Return on Equity: Net Income / Owner's Equity; shows profit relative to shareholder investment 17. ​ Activity Ratios: Measure efficiency in asset utilization. ○​ Inventory Turnover: Cost of Goods Sold / Average Inventory; indicates how quickly inventory is sold 18. 4. Financial Management ​ Objective: Increase the value and wealth of the company through effective fund management 19. ​ Key Activities:  ○​ Financial Forecasting: Predicting future performance 20. ○​ Budgeting: Planning expenditures 21. ○​ Performance Monitoring: Comparing actual performance to forecasts 22. ​ Cash Management: Ensuring sufficient cash flow to meet operational needs 23. 5. Financial Planning ​ Short-Term Forecast: Important for seasonal businesses (e.g., retail) to manage inventory and sales 28. ​ Long-Term Forecast: Helps in planning significant investments and understanding profitability over time 29. This guide provides a structured overview of key financial management concepts, principles, and practices essential for understanding the financial health and operational efficiency of a business. Ai note for module 8: Financial Management Concepts Study Guide 1. Overview of Financial Management ​ Financial management focuses on interpreting financial data and making projections for future budgets and forecasts, contrasting with accounting, which primarily records past transactions 1. 2. Financial Planning ​ Short-term Forecasts: Essential for businesses with seasonal sales fluctuations (e.g., retailers during the holiday season) to manage inventory and cash flow 2. ​ Long-term Forecasts: Important for companies with significant investments, such as energy firms, to plan for cash flows over decades 3. 3. Budgeting  ​ Each department typically manages its own budget, which contributes to a master budget overseen by the finance department. This process helps set clear management objectives and allows for performance measurement 4. 4. Types of Budgets ​ Capital Budget: Focuses on large-scale investments and helps prioritize projects based on cash flow analysis 5. ​ Cash Budget: Critical for small businesses to manage cash flow, especially when expenses are paid in cash while revenues come in on credit 6. 5. Financial Controls ​ Implementing financial controls helps mitigate risks, streamline processes, and ensure regulatory compliance 7. 6. Cash Flow Management ​ Effective cash flow management is vital for covering ongoing expenses and preparing for unexpected emergencies. Companies should maintain a cash reserve and consider credit lines for short-term needs 8. 7. Sources of Funds ​ Operations: Profits reinvested back into the business are a primary source of funding 9. ​ Debt Financing: Involves borrowing from creditors, which may include loans or bonds 10. ​ Equity Financing: Involves selling shares of the company to raise funds, which can dilute ownership but does not require repayment 11. 8. Debt vs. Equity Financing ​ Debt Advantages: No ownership dilution and fixed repayment schedules 12. ​ Equity Advantages: Optional dividend payments and no obligation to repay 13. 9. Key Terms in Debt Financing ​ Interest Rate: The cost of borrowing, typically fixed or variable 14. ​ Covenants: Conditions set by lenders to mitigate risk, such as maintaining certain financial ratios 15. 10. Conclusion ​ Understanding these financial management concepts is crucial for effective business operations and strategic planning. Module 9: Lululemon business - will look at it it at all angles or different company similar situation. FINAL exam -​ Role of HR -​ Administration, etc. Key Points Importance of Human Resource Management (HRM) ​ Critical Business Function: HRM is essential in all organizations due to various external and internal factors. ​ External Forces Influencing HRM: ○​ Shift in Employee Attitudes: Employees show reduced loyalty, increased leisure time, and seek purpose in their work. -​ External factor: HR should make sure there is a sense of production and employees feel connected to their work. ○​ Changing Demographics: The workforce is becoming more diverse. ○​ Skills Gap/Talent Shortage: There is a mismatch between available skills and job requirements. -​ Internal skills, HR should make sure there isn’t gap btw skilled and non-skilled workers. ○​ Globalization: Increased competition and the need for a global workforce. -​ repeat of all points, It all comes back to the employer, it all mobility opportunities (continues growth of employee within company). -​ Remote work around the world, hiring ppl from all over to do e.g: customer support, whoever is more skilled and talented they use them, choose them.  ○​ Economic Factors: Economic conditions directly impact HR strategies. -​ Before and after layoffs - keeping employees morals up, due to job loss then coming back. ○​ Diversity: Emphasis on creating including all workplaces. ○​ Legal Considerations: Compliance with labor laws and regulations. ​ Internal Forces Influencing HRM: ○​ Recognition of Employees as Valuable Resources: Organizations view employees as their most significant asset. ○​ Alignment of HRM Strategy with Business Strategy: Utilizing data and analytics to measure ROI and enhance communication and culture. Steps in the Human Resource Planning Process 1.​ Prepare Human Resource Inventory: Assess current employee skills and capabilities. -​ Ppl are the most reliable resource. -​ Companies look at employees almost as they do to there customers the way to approach, do our employees recommend our company to there friends to apply in there company? - IMPORTANT for HR managers. 2.​ Prepare Job Analysis: Define job descriptions and specifications. -​ If HR can provide data analytics, they are more beneficial to the company and they want such HR. Gathering info from all employees and giving it to the senior leaders (like boss). -​ Communication, culture (LGPTQ, early careers, finding ways to be competitive within the market). 3.​ Assess Future Human Resource Demand: Forecast future skill requirements. - Overall labor stands? - What skills will be available in the future (promoting skills) needed for the future. Skills they will need for the future of the company. ( its all Externalities). 4.​ Assess Future Human Resource Supply: Evaluate internal and external talent availability. 5.​ Establish Strategic Plan: Develop a comprehensive plan to ensure the right skills are available when needed. - Training/development needs - ensuring employees or supervisors have the opportunity to get higher levels of management such as from a employee, supervisor to becoming the manager. Employee Value Proposition (EVP) ​ Definition: The EVP outlines the mutual value exchange between employer and employee, detailing what employees can expect in return for their contributions. ​ Support Throughout Employee Life Cycle: The EVP is crucial in recruitment, onboarding, development, retention, and offboarding. Employee Life Cycle Stages: HR role within each stage. 1.​ Recruit: Attracting qualified candidates. ○​ Recruitment Activities: Communicating opportunities, screening, interviewing, verifying, selecting, and negotiating contracts. ○​ Cost of Bad Hire: Estimated at 30% of the employee's first-year earnings. 😂 -​ Process of attracting quality talent, e.g: bad hires is costly. (imporatnt to get right ppl for right company). CDS - me no development only care about $$ 2.​ Onboard: Integrating new hires into the organization. ○​ Preparation: Employment documents, work environment setup, orientation schedule, and training plans. -​ Roles and responsibilities. 3.​ Develop: Enhancing employee skills and capabilities. ○​ Training Types: On-the-job training, online training, leadership development, and performance appraisals. - making sure employees stay in work and be loyal: training them to develop new skills, growth opportunities like higher level roles, bonus (raise in $$), offering benefits, e.g: CDS work! -​ New roles, training workers. ○​ Performance Appraisal: Provides feedback and identifies training needs, promotions, and compensation decisions. 4.​ Retain: Keeping valuable employees engaged and satisfied. -​ More effort and resources are being used, career growth opportunities, engaging employees. ○​ Compensation: A well-designed package attracts and retains talent. ○​ Pay Equity: Ensuring fairness and competitiveness in compensation. ○​ Perks and Benefits: Flexible work arrangements, wellness programs, and career growth opportunities. 5.​ Offboard: Managing employee exits. -​ Reason why a worker was fired or quits. ○​ Types of Exits: Quits, retirements, terminations, and end of term. ○​ Exit Interviews: Gather feedback to improve HR strategies and understand turnover reasons. Legislation Impacting HRM ​ Key Laws: Pay equity, employment equity, accessibility, and health and safety regulations. ​ Complexity of HRM: Legal requirements add layers of complexity to HR management. Patterns/Themes Across Resources ​ Employee-Centric Approach: Both external and internal factors emphasize the importance of viewing employees as valuable assets, which is reflected in the focus on EVP and retention strategies. ​ Strategic Alignment: The necessity for HRM strategies to align with overall business objectives is a recurring theme, highlighting the importance of data-driven decision-making.  ​ Legislative Compliance: The impact of legal frameworks on HR practices is a critical consideration, indicating that HRM must adapt to changing laws and regulations to remain effective and compliant. Additional ai note module 9: Module 9 Study Guide: Human Resource Management 1. Role of HR in Organizations ​ Strategic Importance: HR has evolved from a purely administrative role to a strategic partner in organizations, crucial for success and often having a seat at the executive table 1. ​ People as Assets: In many businesses, especially in technology, employees are viewed as the most valuable asset, leading to an elevated importance of HR functions 2. 2. Functions of HR Management ​ Employee Lifecycle: HR is involved in various stages of the employee lifecycle, including recruitment, onboarding, development, retention, and exit 3. ​ Planning and Strategy: HR management encompasses planning around human resource needs and executing strategies while considering relevant laws and regulations 4. 3. Recruitment Process ​ Attracting Candidates: The recruitment phase focuses on attracting and hiring the best candidates, which includes posting job openings and communicating opportunities internally and externally 5. ​ Screening Applications: HR managers often spend only a few seconds reviewing resumes, necessitating effective screening methods to identify suitable candidates 6. 4. Employee Development  ​ Training and Upskilling: Continuous development is essential, especially with the introduction of new technologies. HR must ensure that employees are trained to adapt to changing business requirements 7. 5. Retention Strategies ​ Engagement and Career Growth: HR focuses on creating an enjoyable work environment, ensuring career growth opportunities, and addressing compensation to retain employees 8. ​ Diversity and Inclusion: Implementing programs like Employee Resource Groups (ERGs) to support diverse employees is crucial for fostering an inclusive workplace 9. 6. External Factors Influencing HR ​ Globalization and Labor Trends: HR managers must consider external factors such as globalization and economic conditions that affect labor supply and demand 10. 7. HR Planning Process ​ Steps in HR Planning: ​ HR Inventory: Assess current employee skills and competencies 11. ​ Job Analysis: Create job descriptions and specifications to understand roles and required skills 12. ​ Future Demand Assessment: Analyze future talent needs based on organizational goals 10. ​ Strategic Planning: Develop strategies for recruiting and retaining talent 13. 8. Employer Branding ​ Employee Value Proposition (EVP): Clearly define and communicate the unique benefits and opportunities offered to employees, which can help attract and retain talent 14. 9. Legal and Ethical Considerations ​ Compliance with Laws: HR must ensure that employment contracts and hiring practices comply with relevant laws and regulations 15. 10. Conclusion of the Hiring Process  ​ Selection and Onboarding: After selecting candidates, HR prepares for onboarding, ensuring a smooth transition into the organization Study Notes on Employee Life Cycle and Development Key Concepts 1. Recruitment Process ​ Definition: The process of attracting, selecting, and appointing suitable candidates for jobs within an organization. ​ Key Steps: ○​ Job Posting: Clearly define the role and required skills. ○​ Candidate Selection: Use structured interviews and assessments. ○​ Contract Negotiation: Ensure legal enforceability with a labor lawyer, especially for clauses like non-competes 1. 2. Onboarding and Development ​ Importance: Career development opportunities are a top factor for employee satisfaction 2. ​ Training vs. Development: ○​ Training: Focused on short-term skills. ○​ Development: Aimed at long-term capabilities 3. 3. Types of Training Activities ​ Employee Orientation: Introduces new hires to the company culture and roles 4. ​ On-the-Job Training: Learning through doing or observing experienced colleagues 5. ​ Job Simulation: Replicates real job conditions for safe learning 6. 4. Performance Appraisals ​ Definition: A tool to measure employee performance against set standards. ​ Key Steps: ○​ Establish Standards: Clear performance metrics should be defined 7. ○​ Continuous Feedback: Regular check-ins to discuss performance 8. ○​ Corrective Actions: Develop action plans for improvement 9. Examples  ​ Training Example: A new employee undergoes orientation to learn about company policies and their role, followed by on-the-job training where they shadow a senior employee 4. ​ Performance Appraisal Example: A quarterly review where an employee's sales performance is evaluated against targets, and feedback is provided for improvement 10. Summary Understanding the employee life cycle—from recruitment to onboarding, training, and performance appraisal—is crucial for fostering a productive work environment. Investing in employee development not only enhances skills but also boosts morale and retention 3. Lululemon Discussion question answers: Issues Lululemon facing: -​ Quality control -​ Low wage - over time hours labour -​ Audits before going for contracts Discussion Questions – Human Resources Management 1.​ Considering the criticism related to labor practices of key suppliers to Lululemon, what actions should Lululemon take? -​ Ways to fix these issues: 1.​ Conduct a comprehensive supply chain audit. 2.​ Strengthen supplier code of conduct. 3.​ Develop a consumer awareness campaign. 2. What strategies should Lululemon implement to improve employee relations and create a more inclusive workplace environment? -​ Ways to fix these issues: 1.​ Implement inclusive leadership development programs 2.​ Foster an open feedback culture - feedbacks, surveys from employees.  3.​ Create employee resource groups (ERGs). 4.​ Recognize and reward inclusive behaviour 3. How can Lululemon ensure that its workforce is aligned with the company’s mission and values, and represents the brand well especially considering recent challenges? 1.​ Implement value driven onboarding and training programs 2.​ Embed mission and value in performance and reward system 3.​ Align leadership with company values and culture. Discussion Questions - Operations & Quality of Production 1.How can Lululemon improve its product quality to meet customer expectations and rebuild brand loyalty? -​ 2. Should Lululemon diversify its supplier base to mitigate risks associated with quality and availability of materials? -​ 3. How can Lululemon address the quality assurance challenges linked to its reliance on third-party suppliers, particularly in Asia? -​ Discussion Questions - Marketing, Branding, & Pricing 1. How can Lululemon address the negative impact of its founder’s controversial statements on the brand’s image? 2. What steps should Lululemon take to communicate inclusivity and responsiveness to all customers, especially those who felt marginalized? 3. Should Lululemon broaden its target demographic to include a wider range of customers or focus on reinforcing its niche market? 4. What changes, if any, should Lululemon make to its messaging to appeal to both its core audience and potential new customer segments? Discussion Questions - Leadership/Management 1. What strategic initiatives should Lululemon prioritize to manage public perception and operational challenges? 2. How can the company’s values and mission be reinforced in a way that aligns with customer expectations and brand identity? 3.Using the PESTEL Analysis, what are the major external factors you see for Lululemon? 4. Using the Porter’s Five forces analysis, what competitive dynamics does Lululemon need to keep an eye on? Discussion Questions – Corporate Social Responsibility 1. How does Lululemon address the lingering negative perceptions among certain consumer groups, particularly those who are sensitive to issues of body image and inclusivity? 2. How should Lululemon plan to balance profitability with social responsibility, especially as consumer expectations around sustainability and ethical practices continue to grow? 3. Should Lululemon ensure fair wages and safe working conditions for all workers within its supply chain, particularly in developing countries, and if so how? Module 10: Management and leadership Boss or Manager Vs. Leader Manager’s circle (boss): management and leadership responsibility. To achieve desired results, to be successful. -​ Responsible for team work AND their own, to distribute equally to the team, etc. -​ Great managers provide challenge to employee but to also improve them develop and make sure to grow the employee - keeping engaged. -​ Managers changed from directing to leading. — this changed due to lack of employee interests to the company (me to CDS). -​ Loyalty should be rewarded. -​ Change in innovation (new ideas and methods). -​ Managers need to be more adaptable. 4 main functions of management: managers apply these 4 to have control. 1.​ Planning: setting directions for your orgnizations, controlling, infoming. — depends on your role in company. (e.g: accountants advice CEO’s to make better dicitions with there expertise). Three aspects: Develop strategy: continue to monitor the external environment. NOT do and be done. -​ Vision: where this orgnization exists and where it sees itself in long-term. Follows up with mission statement. OVERALL its a GUIDE. Hard to make complex decisions but these 3 helps make better decision. -​ Mission statement: Company’s current state, belief, how it differentiates from the competition. What, for whom, how. Module 10 + lululemon discussion: Key Issues Facing Lululemon ​ Quality Control Concerns: Quality has been flagged by customers and equity analysts, indicating a significant issue that Lululemon needs to address 1.  ​ Labor Practices Backlash: The company faces criticism for outsourcing production to companies with poor labor practices, including low wages and unsafe working conditions 2. Proposed Actions for Improvement ​ Supplier Evaluation: Lululemon should consider finding new producers that align with their values and standards 3. ​ Comprehensive Supply Chain Audit: Conducting a thorough audit of all suppliers to ensure compliance with ethical practices is essential 4. ​ Strengthening Supplier Code of Conduct: Implementing a robust code of conduct for suppliers to ensure adherence to ethical labor standards 5. ​ Consumer Awareness Campaign: Developing a campaign to transparently communicate the steps taken to improve labor practices and regain customer trust 6. Employee Relations and Inclusivity ​ Team Building Initiatives: Encouraging cross-team interactions can help build relationships and foster a more inclusive environment 7. ​ Employee Resource Groups: Establishing groups focused on diversity and inclusion can promote a more inclusive workplace 8. ​ Leadership Development Programs: Incorporating inclusivity training into leadership development can ensure that leaders are equipped to foster an inclusive environment 9. Aligning Workforce with Company Values ​ Values-Driven Onboarding: Implementing a training program that emphasizes the company's mission and values during onboarding can help align new employees with organizational goals 10. ​ Performance Appraisals: Integrating company values into performance evaluations can motivate employees to embody these values in their work 11. Management and Leadership Insights ​ Distinction Between Leaders and Managers: Leaders inspire followers, while managers enforce compliance. Both roles require different skills depending on the context 12. ​ Four Functions of Management: The main functions include planning, organizing, leading, and controlling (CLOP). Each function is essential for effective management 13. ​ SWOT Analysis: A strategic tool to assess internal strengths and weaknesses, as well as external opportunities and threats, guiding decision-making 14.  ​ PESTL and Porter's Five Forces: Additional frameworks for analyzing external factors affecting the business environment, including competition and market dynamics 15. Key Points and Summary Study Notes for Module 10 1. Organizational Design and Management Functions ​ Organizing: The management function of organizing involves designing and aligning resources to achieve company goals. Effective organizational design is crucial for successful strategy implementation 1. ​ STAR Model: This model illustrates the interconnected components of organizational design, emphasizing that success is intentional and requires alignment of all components 2. 2. Components of the STAR Model ​ Structure: Focuses on power, authority, and decision-making rights within the organization. It defines how authority is organized across departments and teams 50. ​ Processes: Concerned with the workflows and how work is executed within the organization. Vertical workflows are common, but horizontal information flow is increasingly important 51. ​ People: Involves identifying and developing the necessary skills and knowledge within the workforce to achieve organizational objectives 52. ​ Rewards: Motivational strategies, such as bonuses linked to individual or team performance, are crucial for encouraging desired behaviors 53. ​ Culture: The organizational culture is shaped by the structure and management practices, influencing employee behavior and engagement 12. 3. Levels of Management ​ Frontline Management: Focuses on day-to-day operations and resource allocation for short-term objectives 7. ​ Middle Management: Responsible for tactical planning and resource allocation over a one to two-year horizon 9. ​ Top Management: Engages in strategic planning and long-term resource allocation, typically over three to five years 10. 4. Leadership Styles  ​ Autocratic Leadership: Involves unilateral decision-making, useful in time-sensitive situations or when employees lack experience 23. ​ Participative Leadership: Encourages collaboration in decision-making, beneficial in creative environments where input from all levels is valuable 28. ​ Laissez-Faire Leadership: Provides employees with freedom to achieve objectives, suitable for highly skilled teams in innovative fields 32. 5. Knowledge Management and Succession Planning ​ Effective knowledge management ensures that critical skills and information are retained within the organization, facilitating training and development 37. ​ Succession planning is essential for maintaining a stable base of knowledge, particularly in organizations facing significant retirements 39. 6. Controlling Function of Management ​ Controlling: Involves setting clear standards, measuring progress, and providing feedback to reinforce positive behaviors and correct underperformance 41. ​ Balanced Scorecard: A tool that measures various business aspects, including financial performance, customer satisfaction, internal processes, and employee growth. Module 11 note: Ethics and social responsibility Ethical Decision Making and Corporate Social Responsibility Key Concepts ​ Ethical Decision Making: Involves evaluating actions based on moral principles and societal norms. It often contrasts with legal standards, as something can be legal but not ethical 1. ​ Corporate Social Responsibility (CSR): Businesses have responsibilities to various stakeholders, including customers, employees, and society, beyond just profit maximization 2. Important Examples ​ Cambridge Analytica Scandal: Highlighted issues of data privacy and ethical concerns regarding the use of personal data for political manipulation 3. The scandal led to a significant decline in consumer trust and Facebook's share price 4.  ​ Wells Fargo Scandal: Over 5,000 employees created fake accounts to meet sales targets, driven by management's pressure to cross-sell products. This incident illustrates how organizational culture and incentives can lead to widespread unethical behavior Ethical Frameworks ​ Legal vs. Ethical: Laws govern behavior but do not encompass all ethical considerations. Ethical behavior requires a moral compass that may go beyond legal obligations 5. ​ Ethics Codes: ○​ Compliance-based: Focuses on rules and punishment for violations 6. ○​ Integrity-based: Encourages ethical behavior through shared values and professional judgment 7. Stakeholder Obligations ​ Businesses must balance obligations to shareholders, customers, and society. Ethical lapses can lead to loss of trust, customer loyalty, and ultimately profit 2. ​ Whistleblowing: Important for uncovering unethical behavior. Companies should foster a culture that supports whistleblowers and protects them from retaliation 8. Challenges in Ethical Decision Making ​ Ethical dilemmas often arise in high-stakes environments, such as pharmaceuticals, where companies face pressure to release products quickly, potentially compromising safety 9. ​ Decisions can be influenced by the organizational structure and the tone set by leadership, which can either promote or hinder ethical behavior Conclusion Understanding the intersection of ethics and business is crucial for making informed decisions that align with both legal standards and moral expectations. Companies that prioritize ethical practices are likely to foster trust, loyalty, and long-term success. Review all chapters mostly after midterms. Final Exam Review Summary for ARBUS Exam Structure  ​ Mock Exam: 50 multiple choice questions, 60 minutes to complete 1. ​ Final Exam: 85 multiple choice questions, approximately 100 minutes. Business Model Canvas ​ Key Partners: Independent contractors (drivers) are key partners for Uber, as opposed to key resources which are internal 2. ​ Key Activities: Logistics and algorithms to connect drivers with customers 3. ​ Value Proposition: Convenience, availability, and safety are major selling points for Uber 4, 5. ​ Customer Relationships: Discounts and a rating system enhance customer relationships 6, 7. ​ Channels: Marketing strategies include reminders and targeted ads 8. ​ Revenue Streams: Charges per ride and annual subscription fees 9. Accounting Disciplines ​ Managerial Accounting: Focuses on internal stakeholders and decision-making for management 10. ​ Financial Accounting: Reports for external stakeholders, including investors and government 11. ​ Auditing: Ensures compliance with regulatory requirements. Financial Statements ​ Cash Flow Statement: Tracks cash inflows and outflows, crucial for assessing liquidity 12. ​ Income Statement: Shows revenue and expenses over a period, useful for assessing profitability 13. ​ Balance Sheet: Displays assets, liabilities, and owner's equity at a specific point in time 14. Key Financial Ratios ​ Current Ratio: Current assets divided by current liabilities 15. ​ Return on Equity (ROE): Net income over total owner's equity 15. ​ Inventory Turnover: Cost of goods sold divided by average inventory 16. Financial Planning ​ Capital Budget: Important for managing large, long-term expenses 17. ​ Cash Budget: Ensures sufficient cash on hand to meet obligations 18. Human Resources Management  ​ HR Planning Steps: Includes preparing HR inventory, job analysis, and assessing future HR demand 19. ​ Employee Value Proposition: Factors influencing an employee's decision to work for a company 20. Management and Leadership ​ Functions of Management: Planning, organizing, leading, and controlling 21. ​ Leadership Styles: Autocratic, democratic, and laissez-faire approaches depending on the situation 22. Ethics and Social Responsibility ​ Ethics Checklist: Consider legality, balance, and personal feelings about decisions 23. ​ Corporate Philanthropy vs. Social Initiatives: Donations versus initiatives aligned with company competencies 24.