Business, Management and Accounting

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Business Communication

INTRODUCTION TO BUSINESS COMMUNICATION

Businesses today value effective, ethical communicators who can represent the company at all times. With more businesses knocking down the walls between offices, and connecting remote branches with instant messaging and videoconferencing, a business leader could very well be visible to everyone at every moment. Poor communication with your co-workers is a fact that is itself effectively communicated through their body language. If you have a bad impression of a company, chances are it's because you had a poor experience with its customer support, maybe just one person. Online knowledge bases, automated help lines, chat rooms, self-service kiosks, and teleconference channels give companies many options for customer service and support.

Today, many of these same technologies help businesses maintain contacts with clients and manufacturers, track packages, and manage inventory. Whether you're communicating through technology or face-to-face, the statement you make on behalf of your business should be effective, ethical, and barrier-free.

This resource provides instruction for users to:

  • Explain how effective business communication is achieved
  • Examine tools used for effective business communication
  • List communication barriers
  • Describe the impact that technology has had on business communications
  • Analyze ethical issues related to business communication
• Introduction to Business Communication

TEAMS, LISTENING, AND NONVERBAL COMMUNICATION

As a member of any kind of team, you are responsible for ensuring that you're an active, contributing participant. The structure of a team determines the limits and extent of members' responsibility and participation, including yours. You may not always be the leader of every team you work with, but your ability to interpret group dynamics and respond positively, will make you a natural leader in whatever role you play. Team involvement is not always about meetings.

When you're working with a team on a project or an everyday task, you may be communicating with more than one party at a time—especially if you're using the phone or email. It's important that you not look distracted or overwhelmed, because the rest of the team is counting on you even if you're not the leader. Your poise, your wardrobe, and even the way you appear to be listening, send important messages to your co-workers.

This resource provides instruction for users to:

  • Describe the characteristics of effective teams
  • Recognize elements of a successful business meeting
  • Recognize barriers to effective communication
  • Identify categories of nonverbal communication
  • Examine elements of appropriate business etiquette
• Teams, Listening, and Nonverbal Communication

COMMUNICATING ACROSS CULTURES

Would you ever take or accept a bribe in the workplace? One university lecturer and researcher reports that, in her native Mauritius, bribery has become so common that little is done any more to stop it. As the global economy continues to expand and businesses diversify their workforces, at some point in your career, you will likely interact with people who have different cultural beliefs than yours, and whose economic and social status is on a different plateau from yours.

Effective communication across diverse cultures can be challenging. However, you can overcome cultural differences between you and your audience by applying certain strategies, such as assessing their reliance upon context. Low-context cultures tend to ignore nonverbal meaning and rely almost exclusively on spoken or written words. High-context cultures tend to interpret meaning within environmental settings and rely more on nonverbal communication. In addition, other cultural differences must be considered as well. Countries and inter-dependent regions may differ from one another socially in terms of measures of success, roles, manners, and concepts of time. Countries may also have varied communication styles in terms of openness, directness, and nonverbal gestures. To overcome barriers to cultural communication, speak clearly and in a moderate pace, avoid slang and colloquialisms, and pause where appropriate to clarify understanding. You can take advantage of technology tools such as online translators and dictionaries. To be an effective intercultural communicator, you are responsible for making sure your messages are received as clearly and accurately as you intend.

This resource provides instruction for users to:

  • Describe the challenges of communicating across cultures
  • Describe how language barriers can be overcome
  • Identify communication approaches to communicating across cultures
  • Discuss intercultural sensitivity
  • Describe how language barriers can be overcome
  • Identify communication approaches to communicating across cultures
• Communicating Across Cultures

COMPOSING A BUSINESS MESSAGE

When assigned a writing task, do you cringe at the thought of accomplishing it? Many people avoid writing because they're overwhelmed with the thought of taking on a task that will be scrutinized so closely for meaning and quality, not unlike performing on stage. Here is a secret: People who write well start with a plan. Composition is a three-step process that begins with planning, some of which you may not even have to write down. Understanding how to make a plan, analyze your audience, gather information, and organize your thoughts will help you compose your business message or correspondence in simper, incremental, more manageable steps.

During the planning process, you determine a purpose and theme for your composition, gather and organize information, and choose your delivery medium and format. Before writing a first draft, you will analyze your audience to be sure your message is sensitive to their needs and builds a strong relationship. After writing, you will revise, produce, proofread, and distribute your message. There are a number of things you do in the composition process besides writing, that ensure the act of writing is efficient, successful, and even short.

This resource provides instruction for users to:

  • Develop a written message using the steps in the writing process
  • Write an effective business message
  • Explain how a business message can be sent successfully electronically
  • Formulate a business message using successful design characteristics
• Composing A Business Message

COMMUNICATING ROUTINE INFORMATION

The most common form of business writing there is, is the request for information; the next most common is the response to such requests. It's ordinary, but it speaks as much for the integrity of your company as a policy statement. Other types of ordinary communiques include recommendations for new resources of action or changes in policy, commendations for positive actions a partner company or customer may have taken, and claims or requests for adjustment when your company isn't satisfied with the quality of service or product it's received.

All types of business requests and responses follow the writing process steps: planning, writing, and completing. In most cases, each routine communication has an opening, a body, and a close. Good news, statements of goodwill, and news releases follow this same structure. The purpose of these writing tasks is to share information, provide congratulations, or capture the attention of a reporter or news editor. In each case, your communication represents your company and should be professional, courteous, and effective.

This resource provides instruction for users to:

  • Discuss approaches for conveying positive messages
  • Develop a response to a business message
  • Develop an effective business memo and business letter
  • Produce a routine business message
• Communicating Routine Information

COMMUNICATING BAD NEWS

We tend to remember the negative experiences of dealing with a company more than the positive ones, and the negative ones can more deeply impact our feelings about that company. You might think twice about investing in its product or service again. But communicating a bad-news message does not have to leave the recipient with a poor opinion of you or your company. In fact, it could begin the process of creating a positive experience from a bad turn of events. To avoid negative feelings associated with a bad-news message, focus on just a handful of main goals.

There are specific methods and strategies you can employ to soften the blow. You should evaluate your audience and be sensitive to their needs in determining if a direct or an indirect approach would be more appropriate. With an indirect approach, you open your message with a buffer. When your message's purpose is to say no to someone, in addition to presenting specific reasons, list negative points last in the body of your message or in the middle of a sentence or paragraph between two positive points. The close should offer alternate solutions or direct the audience to complete an action. You can use the same writing process and structure to craft other bad-news messages such as refusing requests, turning down job applicants, and issuing negative organizational news. Whatever the circumstance, your bad-news messages should always be polite, tactful, neutral or positive in tone, sympathetic, and error free.

This resource provides instruction for users to:

  • Write an effective bad-news message
  • Evaluate methods used to send bad-news messages
  • Describe types of bad-news messages
  • Discuss approaches for conveying bad news
• Communicating Bad News

PERSUASIVE COMMUNICATION

Advertising is not, by nature, disingenuous or dishonest. It is the business of persuasion, upon which all business relies. When used properly, persuasion can be a positive influence, providing potential customers with new information that facilitates understanding and enables them to make informed choices.

Writing persuasive messages is a three-step process that includes planning, writing, and completing. During the planning stage, writers analyze the audience's needs and likely reactions to the message, determine the most effective emotional and logical factors, and gather facts, test results, testimonials, expert opinions, and competitive comparisons to support any claims they plan to make. When writing, they implement the AIDA model to prompt an audience's attention, interest, desire, and action.

This resource provides instruction for users to:

  • Describe methods used to send persuasive messages
  • Identify strategies for developing a persuasive business message
  • Apply effective writing skills in producing a persuasive message
• Persuasive Communication

INTRODUCTION TO BUSINESS REPORTS AND PROPOSALS

An effective report or proposal can get the boss's attention, help the company make sound decisions, or secure a lucrative contract. Companies rely on reports to maintain inventory, develop and market new products, stay competitive, identify and satisfy customer needs, and manage employee relationships.

Proposals present new ideas or solutions and help companies secure contracts for work. Writing reports and proposals does not have to be frustrating, boring, or overwhelming. A simple procedure can guide your writing, break it into manageable steps, and help you communicate the final product effectively to your audience, whether it's inside or outside the company.

This resource provides instruction for users to:

  • Identify types of business reports and proposals
  • Demonstrate the ability to conduct research and analyze research materials
  • Identify types of business reports and proposals
• Introduction To Business Reports and Proposals

COMPOSING BUSINESS REPORTS AND PROPOSALS

There are probably any number of things people would prefer doing than reading a business report, perhaps including reading almost anything else. So while you may have the reader's eyes, you may not have the reader's attention. It's up to you to present your information in a compelling way, even if the only persuasion you do is persuading the reader to follow you through to the end. Reports are not, by definition, dull. However, lack of attention to quality may make them that way. Gone are the days when business reports and proposals were paper-based, black-and-white documents with pages and pages of text. Multimedia technology has opened a world of possibilities for presenting long, technical reports in more appealing formats. Now we can use visuals and media such as tables, bar and pie charts, flowcharts, maps, animations, videos, and photos to bring our reports to life and connect with our audience.

Although it may help to add the wow factor, you can't rely solely on technology in your business communications. It's still crucial that you follow a basic plan when organizing and drafting reports and proposals. You must adapt your tone, style, and content to your audience's needs as well as organizing your reports into an opening, body, and closing. You need to include specific elements to ensure your writing is effective and organized. Following the guidelines for drafting reports and adding visuals will undoubtedly make your reports less time-consuming, and more appealing and effective.

This resource provides instruction for users to:

  • Identify parts of a business report and proposal
  • Produce a business report
• Composing Business Reports and Proposals

FORMAL REPORTS AND PROPOSALS

Company executives or decision makers use formal reports and proposals to objectively validate or refute sales, purchases, or funding. These reports provide support for their decisions so they know the risks, benefits, or consequences of their actions. Formal reports are often regular publications of a company or organization and, as such, have a long history. Their structures often follow the dictates of decades of history in informing executives and shareholders of the status of the company and its divisions in much the same way.

When a format works well, there's no need to change it for the sake of change. So in many cases (unless the company is new and hasn't published formal reports before), much of the hard work of structuring may already have been done for you. In the case of formal reports, there are typically special details in the very beginning, that you would not normally find even in the standard formal proposal. Some of these details are required by law, especially for a publicly traded company.

This resource provides instruction for users to:

  • Identify parts of a formal report
  • Critique a formal report
  • Explain the purpose of a formal proposal
• Formal Reports and Proposals

ORAL PRESENTATION SKILLS

Good presentation skills are expected in today's business world. The most respected companies are run by executives who are masters of presentation and communication. Good presentation skills will help to enhance your career, open doors of opportunity, and provide you with a sense of confidence in your communication ability.

One difference between delivering an oral presentation and a written report is that you see the feedback from your audience during the delivery process. Like a great stage performer or comedian, you may want to adjust your presentation in response to that feedback. And perhaps like a solicitor before the high court, you may get direct questions in the middle of your presentation, which may force you to go off-program. Another difference, just like on television, is that you'll likely be interacting with visuals such as charts and photographs.

This resource provides instruction for users to:

  • Demonstrate knowledge regarding audience awareness
  • Write an oral presentation
  • Demonstrate knowledge regarding audience awareness
  • Write an oral presentation
  • Develop appropriate visual aids for an oral presentation
  • Write an oral presentation Describe how to prepare to respond to questions during an oral presentation
• Oral Presentation Skills

RESUME WRITING AND THE EMPLOYMENT INTERVIEW

Your career is something you nurture and develop like a strategic asset. Today, seeking a new job while you're currently employed, being laid off unexpectedly, or having a contract lapse and not be renewed are all commonplace events. Full-time employment is no longer guaranteed, as independent contractors, temporary employees, and part-time labor all give employers less costly alternatives.

Most jobs are not posted publicly because companies prefer to hire from within, or based on recommendations from current, valued employees. You can network through social media, friends, and friends of friends. You can also use your writing skills to plan, write, and complete a résumé and an application letter that will make a stellar first impression and prompt a hiring manager to call you for an interview. You then plan for the interview. Write possible questions they may ask you, and include possible responses. Practice your nonverbal communication skills, selling yourself, and discussing answers to salary and compensation questions. After the interview, send a follow-up letter, and soon, you might just be sending that letter of resignation to your old job and saying “hello” to your new one.

This resource provides instruction for users to:

  • Discuss types of interviews
  • Explain the important elements of securing a position in the current job market
  • Create samples of appropriate follow-up messages
  • Write an application letter
  • Create a resume
• Resume Writing and The Employment Interview

Entrepreneurship

ENTREPRENEURSHIP: WHO EXCELS AND WHAT ARE THE ESSENTIALS?

Becoming an entrepreneurcan be an inspiring and exhilarating experience. But what exactly does it mean to be an entrepreneur, and what steps are involved in becoming your own boss? True entrepreneurs are able to look at an idea or a concept and figure out a way to create a product or service that is innovative and popular. It doesn't matter whether the product is a new sandwich or a new type of computer. Entrepreneurs are driven by a strong belief in their ideas, and they are willing to work hard to see those ideas come alive. They may each start out with a dream, but they approach that dream realistically, measuring the costs versus the benefits, doing research to make sure they are on the right track, and studying potential competitors to find out what works and what doesn't.

Smart entrepreneurs aren't afraid to seek help and support, whether through educational resources, professional associations, or other entrepreneurs. If you want to be an entrepreneur, probably the two most valuable traits you can have are honesty and patience. You need to be honest with yourself when you're evaluating an idea so that you can identify its strengths and its flaws. You need to be patient because the process from start to finish can be lengthy. It is rare for an entrepreneur to become an overnight success. Despite the obstacles, if you have an idea you believe in and you are willing to stick with it, you have already passed the first and most critical hurdle of becoming an entrepreneur.

This resource provides instruction for users to:

  • Identify the costs and benefits of becoming an entrepreneur
  • Perform a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of a business idea that would meet consumers' needs in the marketplace
  • Describe entrepreneurial attitudes, skills, and traits that lead to success
  • Define terms used in financial analysis and reporting
• Entrepreneurship: Who Excels and What Are The Essentials

COMPETENT LEADERSHIP: CHARTING THE ENTREPRENEURIAL ITINERARY

• Competent Leadership: Charting The Entrepreneurial Itinerary

WHO WILL BE YOUR CUSTOMERS?

Marketing is the action of getting people to want to buy what you are selling. Though it can take many forms, it is always built on the same basics: understanding the customer, understanding the product, knowing which products fit which customers, and getting the customer to buy in.

Successful entrepreneurs conduct market research to get this information. Market research can be elaborate, but it can also be as simple as handing out customer surveys. When done properly, it can give you significant information about your customer base. You can conduct market research based on factors such as age, residence, gender, or shopping and spending patterns. Armed with the information you gain, you can target your products more effectively. You can research other segments of the market and determine whether there is a customer base you didn't realize existed.

No product, however, truly sells itself, so you need to make sure that any marketing campaign you launch reaches the intended audience. The more people you inform about your product, the more potential customers you will reach.

This resource provides instruction for users to:

  • Draft components of a business plan
  • Research competition using the Internet and other sources
  • Define aspects of opportunity analysis and market research
  • Describe the long-term benefits of creating brand identity
  • Apply the Four Ps (marketing mix) to a business idea
  • Describe the economics of one unit, cost of goods sold, gross profit, and cost of labor
  • Perform calculations needed for the financial planning of a successful business
• Who Will Be Your Customers?

THE BUSINESS PLAN: DOCUMENTING THE DETAILS

 
• The Business Plan: Documenting The Details

OPERATIONS AND FINANCIAL MANAGEMENT: ACCOUNTING FOR SUCCESS

• Operations and Financial Management: Accounting For Success

THE BUSINESS PLAN: FINANCIAL PROJECTIONS

• The Business Plan: Financial Projections

FOCUS ON FINANCING STRATEGIES

How best to finance your new business venture depends on a number of factors. The most common method, debt financing, is a simple and straightforward transaction that often comes from a bank. The lender provides the specified amount of money to the borrower, who pays it back over a set period of time with interest. The greatest benefit of debt financing is that the lender has no say in how the business is run. The money belongs to the borrower, with no strings attached. If, however, the borrower fails to make payments on the loan, the loan can default and the lender can seize assets.

With equity financing, the lender essentially buys into the business, expecting a stake in the company in exchange for financial assistance. Equity financing can be easier on the borrower's cash flow because the lender doesn't expect the money back over the short term. But if the investor now has a voice in how the company is run, that means the owner has less say. Moreover, it is possible that a group of equity investors could effectively take control of the company.

Among the other sources of financing are community development organizations, which often have special funding for first-time business owners. Private venture capitalists often come with deep pockets, but they expect significant control of the company in return for their generosity. One often overlooked source is the Small Business Administration (SBA), which provides information on a number of loan programs available to small businesses and start-ups.

This resource provides instruction for users to:

  • Draft components of a business plan
  • Identify funding sources from start-up costs to long-term financing for the business
  • Draft components of a business plan
  • Perform calculations needed for the financial planning of a successful business
  • Explain how using calculations such as simple interest, compound interest, and return on investment can help in making wise choices about financing sources
  • Identify funding sources from start-up costs to long-term financing for the business
  • Compare and contrast sources of business financing
• Focus On Financing Strategies

THE BUSINESS PLAN: MEASUREMENT AND REVIEW

Before you start your business, you need to determine how you plan to be structured as a legal entity. If your operation is small and simple, a sole proprietorship should suffice. Partnerships give you the advantage of extra support, money, and idea power. But when partners quarrel, the business is often the first casualty; it's best to proceed with caution if you decide on a partnership.

There are many forms of business incorporation. As a one-person operation, you could incorporate as an “S” corporation or a professional corporation if it provides tax or liability advantages. A more complicated, traditional corporate structure is probably best for larger organizations. 

This resource provides instruction for users to:

  • Draft components of a business plan
  • Examine best practices and strategies for running and growing a successful business
  • Describe intellectual property and the federal and state laws designed to help protect these assets
• The Business Plan: Measurement and Review

WHAT YOU NEED TO KNOW TO GO AND GROW

All businesses begin with a production-distribution chain that takes the product from its creation all the way through to delivery to the end user. If you do any kind of production, you'll want to make sure your supply-chain management is as efficient as possible. By finding suppliers who can produce top quality products at a reasonable cost, and who can fill emergency orders while staying on schedule, you will have overcome a major hurdle.

Your inventory is another key component. You'll want to make sure you have enough inventory on hand to fill orders, but not so much that you have to pay to store unused products. Part of the solution for finding that balance is using a good inventory management process that allows you to track how much material you have and how soon you need to reorder. If you are doing your own manufacturing, you'll want to be aware of the associated costs for things such as machinery, training, and factory space. You may find that doing part of the manufacturing and sending specialized tasks out to jobbers is more cost-effective. You may also find that just-in-time manufacturing, which allows the production of smaller batches with quicker turnaround time, saves you time, space, and money.  

This resource provides instruction for users to:

  • Draft components of a business plan
  • Explain the significance of business operations
  • Discuss ways to use technology such as a website to benefit business operations
  • Determine appropriate software, hardware, and networking solutions
• What You Need To Know To Go and Grow

LEADERSHIP: SOCIAL RESPONSIBILITY AND BUSINESS ETHICS

As the leader of your new business, you will be responsible for shaping the company's management style. That style will depend in large part on your own leadership attributes and sensibilities. You will also want to build a strong management team that can work directly with you to help spread corporate responsibility. It's also important to have a dedicated human resources presence to handle employee issues, such as benefits and taxes.   

One of your most important jobs as the leader is to provide guidance on ethics. Along with your management team, you can set a company tone that puts a strong emphasis on integrity and honesty, fair treatment of employees, and an obligation to give back to the community. Adhering to a code of ethics can put your company ahead of the competition more effectively than a new product line.

This resource provides instruction for users to:

  • Draft components of a business plan
  • Examine best practices and strategies for running and growing a successful business
  • Explain what makes an effective and ethical leader and why
• Leadership: Social Responsibility and Business Ethics

BRANDING, FRANCHISING, AND HARVESTING

 
• Branding, Franchising, and Harvesting

READY FOR TOMORROW? ENTREPRENEURS, "START YOUR ENGINES!"

• Ready For Tomorrow? Entrepreneurs, "Start Your Engines!"

Finance

UNDERSTANDING THE ROLE OF THE FIRM AND FINANCIAL MANAGER

Making good decisions is the foundation of finance. You will benefit from understanding business organizations, markets, interest rates, and financial theories. However, knowing agency theory, for example, is less important than how you apply this knowledge to your decision-making process. Whether you are a finance student, a CEO, or someone managing your personal finances, good decisions allow you to be financially solvent, live in sync with your values, and effectively manage your day-to-day life.

This resource provides instruction for users to:

  • Recognize the primary goal of the firm
  • Describe the key activities of the financial manager
  • Identify key forms of business organization
  • Justify the importance of finance to business careers
  • Analyze ethical situations in finance
  • Define agency theory
  • Describe the relationship between agency theory and the firm
  • Trace the implications of the efficient markets hypothesis
• Understanding The Role of The Firm and Financial Manger

FINANCIAL MARKETS, FINANCIAL INSTRUMENTS, AND INTEREST RATES

Knowing the financial markets and instruments does not give financial managers a guarantee of success. However, this knowledge certainly gives them options when it comes to raising and borrowing money. Financial markets and financial instruments are a key part of business that take account of goals, risk tolerance, and time frame.

Some markets are best for short-term investments while others do best for long-term goals. How do companies raise money? How companies issue common stock and how debt agencies rate corporate bonds are important considerations. Respecting the power of inflation also helps you achieve your financial goals. Markets and instruments affect your daily life—they allow businesses to start and expand. They also allow individual investors to plan for their futures. Whether you are a financial manager, a student of finance, or someone who simply wants the best return on an investment, you will benefit from understanding financial markets, financial instruments, and interest rates.

This resource provides instruction for users to:

  • Describe the different roles of financial institutions and financial markets
  • Distinguish between the money market, capital market, primary market, and secondary market
  • State the differences between organized exchange and the over-the-counter market
  • Contrast equity versus debt
  • Explain how common stock is issued Identify examples of corporate bonds
  • Describe a yield curve and how each of the three basic theories explain its shape
  • Identify the nominal rate of return, the real rate of return, the inflation premium and the risk premium
  • Understand the relationship between corporate bond ratings and risk
• Financial Markets, Financial Instruments, and Interest Rates

UNDERSTANDING FINANCIAL STATEMENTS

Financial statements help leaders make the best financial decisions possible. For firms, financial statements reveal the fiscal shape of the company. Financial managers, for example, use statements to predict future cash needs, evaluate company efficiency, or get an investor's perspective of the company.

Financial statements fall into three major categories: income statements, cash flow statements, and balance sheets. Income statements examine expenses and revenue for a set time, usually 12 months. Cash flow statements indicate when a company receives and disburses cash. Balance sheets resemble a scorecard of a firm. They are a snapshot of ownership structure and assets. Investors and managers alike find these statements invaluable. Financial managers, for example, read them and acquire a thorough understanding of the firm's efficiency, profit margins, leverage, and liquidity.

This resource provides instruction for users to:

  • Identify the three major financial statements
  • Recognize the difference between cash flows and profit
  • Explain how depreciation impacts financial decision-making
  • Distinguish between book value and market value
  • Demonstrate how tax issues can impact financial decision-making
  • Explain how financial statements are used in forecasting
  • Compare the advantages and disadvantages of using historical data
• Understanding Financial Statements

FINANCIAL STATEMENTS AND RATIO ANALYSIS

Sometimes you may require more in-depth information than what is offered by financial statements. That is when ratio analysis, a profiler of financial companies, becomes important. Ratio analysis allows you to examine the underlying strength and stability of a company. Ratios are equations that allow financial managers to identify strengths and weaknesses, see if a firm is liquid enough, and understand how the firm is leveraged. Ratios might help managers understand what an investor would ask, including “Is this firm profitable enough to invest in?”

You can compare peer firms using ratios. Some of the most frequently used ratios include liquidity ratios, asset utilization ratios, and debt ratios. In sum, ratios provide another tool for individual investors or financial managers to make good financial decisions.

This resource provides instruction for users to:

  • Calculate the current ratio and quick ratio
  • State the uses of liquidity ratios
  • Calculate asset utilization ratios, including inventory turnover, receivables turnover, and total asset turnover
  • Demonstrate how asset utilization ratios impact financial decision-making
  • Calculate times interest earned (TIE) and debt ratios
  • Calculate profitability and market value ratios, including return on equity (ROE), return on assets (ROA), market-to-book, and price-earnings (P/E) ratios
  • Recognize the purpose of ratio analysis with internal and external users
  • Name the limitations of ratio analysis
• Financial Statements and Ratio Analysis

APPLYING TIME VALUE OF MONEY TOOLS

An understanding of the time value of money is one of the most important financial concepts necessary for making sound financial decisions. Time value of money means that, all components being equal, money is more valuable today than tomorrow. You can make money work for you as long as you have it in hand. Applying time value of money tools through different concepts—such as compounding and discounting—helps financial managers and individuals ultimately make better decisions about investments.

If you understand the time value of money, you have a greater likelihood of establishing and maintaining financial independence. Whether you are managing your personal finances or a firm's money, understanding how to use the time value of money tools can help you maximize your bottom line.

This resource provides instruction for users to:

  • Explain the concept of time value of money, including compounding and discounting
  • Apply time value of money concepts to a personal situation
  • Compute the present and future value of a single sum
  • Solve for the interest rate and number of periods
  • Calculate present value and future value of ordinary annuities, annuities due, and perpetuities Value an asset with a mixed stream of cash flows
  • Adjust the time value of money formulas for more frequent compounding
  • Calculate the effective annual rate
  • Solve for the payment of a loan, annual retirement savings, and growth rate
  • Describe the three key things necessary to value any asset Identify the generic formula needed to value any asset
• Applying Time Value of Money Tools

UNDERSTANDING RISK AND RETURN RELATIONSHIPS

One of the basic premises in finance is that higher risk can equal higher reward. Simply put, if you are willing to take more risk, you can earn more money. Imagine that you are considering investing in a fictional search-engine company as part of your investment portfolio. The company uses innovative, cutting-edge technology that optimizes local preferences. However, the search-engine market is competitive. If the company succeeds, you could earn higher-than-average returns. If it fails, you lose your investment money. Do you invest in the company?

Learning how to measure risk versus reward is useful, whether you are a professional manager or just managing your own portfolio. When you understand the relationship between risks and rewards, you can make more informed decisions.

This resource provides instruction for users to:

  • Calculate the return of stock over a single year
  • Calculate the expected return and standard deviation of a single asset
  • Choose between two assets based upon risk and return
  • Calculate the expected return and standard deviation of a portfolio
  • Provide real-life examples of market risk and firm-specific risk
  • Explain the relationship between correlation, diversification, and risk
  • Differentiate between total risk, market risk, and diversifiable or firm-specific risk
  • Describe beta and its importance in finance
  • Define the capital asset pricing model (CAPM)
  • Solve for the required return using the CAPM
  • Graph the security market line (SML)
• Understanding Risk and Return Relationships

VALUATION OF STOCKS AND BONDS

An important financial concept is asset valuation, or determining how much an asset is worth. You can value any asset if you can identify the cash flows, their timing, and the risk of receiving them. Financial managers perform asset valuation when they consider company investments. Individual investors evaluate stocks and bonds to determine if investments will meet their goals, preferences, and risk tolerance. Whether you are a financial manager or an individual investor, an understanding of simple valuation models and how to calculate common return measures can help you make the most informed financial decisions possible.

This resource provides instruction for users to:

  • Use the constant growth stock valuation method
  • Calculate the value of a common stock, assuming no growth and constant growth
  • Calculate the dividend payment and value of a preferred stock
  • Compare preferred stock to bonds and to common stock
  • Apply time value of money concepts to a personal situation
  • Identify various bond features, including par value, coupon rate, and maturity
  • List two possible reasons why the required return on a bond may differ from its par value
  • Value a bond with annual and semiannual coupon payments
  • Calculate the yield to maturity (YTM) of a bond with annual and semiannual coupon payments
  • Analyze how bond values are affected by the coupon payment, time to maturity, market interest rates, and par value
• Valuation of Stocks and Bonds

UNDERSTANDING AND APPLYING CAPITAL BUDGETING TOOLS

One of a financial manager's most important responsibilities is capital budgeting, which means investing a company's money to increase profit. Capital budgeting may sound simple, but it is not. There is great room for error—especially when you need to forecast how much money a company will need and how much it will owe. First, you have to identify potential moneymaking projects, or assets, that correlate with a firm's strategy. You also have to forecast cash flow using various techniques, such as discounted cash flow.

New business ventures pose challenges. Test markets and surveys regarding consumer interest are helpful, but you still cannot know exactly what the future holds. As with most elements in finance, forecasting cash flow for new projects is as much an art as a science. However, you can use some relatively simple calculations to evaluate cash flow. If you know the tools to evaluate investment opportunities, you will be able to make informed decisions.

This resource provides instruction for users to:

  • Explain the capital budgeting process
  • Solve capital budgeting decisions with the Net Present Value (NPV) method
  • Use the payback method to make capital budgeting decisions
  • Identify factors that may impact project ranking
  • Show how the IRR method is used for capital budgeting decisions
  • Define capital rationing
  • Calculate the profitability index
  • Differentiate fixed versus variable costs
  • Perform a break-even analysis
• Understanding and Applying Capital Budgeting Tools

IDENTIFYING RELEVANT CASH FLOWS FOR CAPITAL BUDGETING

"Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has." —Margaret Mead, world-renowned anthropologist From business to politics, social sciences to sports, teams form the core of innovation, progress, and success. However, successful teams require communication and collaboration. Working well on a team means working well with others—a sometimes-difficult task. Evelyn, for instance, works for a nonprofit dedicated to providing afterschool activities for children. She must work with her fellow employees to brainstorm new activities to offer, find spaces to hold the activities, secure funding, advertise the different programs, and much more.

Pretty much everything the organization does involves teamwork. For the most part, everyone at the nonprofit works well together. However, one employee, Alan, doesn't pull his weight. He seems disinterested in projects, fails to show up on time to meetings and events, and doesn't always finish assigned tasks. Alan's failure to work well in the team setting starts to cause conflicts with other staff members tired of Alan's poor attitude and lack of work ethic. When Evelyn takes on the challenge of organizing a new cooking class for teens, she decides to try to figure out exactly why Alan doesn't work well with the team. Maybe she can take steps to help Alan become a better team member or, at the very least, improve the overall effectiveness of the team.

This resource provides instruction for users to:

  • Describe how effective teamwork contributes to professionalism
  • Recommend strategies to improve teamwork
  • Analyze the benefits of various technological tools for workplace teams
• Identifying Relevant Cash Flow For Capital Budgeting

UNDERSTANDING THE COST OF CAPITAL

The cost of capital is a vitally important component in evaluating investment projects. The cost of capital is the minimal required return on a firm's investment. Understanding the cost of capital is a key component in helping financial managers evaluate investment projects.

This resource provides instruction for users to:

  • Explain weighted average cost of capital (WACC) Use the constant growth stock valuation method
  • Calculate the dividend payment and value of a preferred stock
  • Calculate the value of a common stock, assuming no growth and constant growth
  • Calculate the yield to maturity (YTM) of a bond with annual and semiannual coupon payments
  • Calculate after-tax cost of debt Calculate the cost of preferred stock
  • Calculate the cost of equity using the dividend valuation model
  • Explain how RADR can be used to adjust for various risk factors among projects within a firm
  • Calculate the required return using the WACC formula
  • Describe why the WACC formula should be used to evaluate individual projects rather than the particular funding used for individual projects
• Understanding the Cost of Capital

MANAGING CURRENT ASSETS AND CURRENT LIABILITIES

Financial managers make long-term strategic decisions. However, many financial managers oversee the day-to-day business operations, including managing inventory, accounts receivable, and accounts payable. If you manage these well, you may increase profits. Of resource, you have to do more than simply appear profitable on paper; you also have to make sure you have enough cash on hand. You need cash to pay the bills, meet payroll, and invest short-term for more money. A competent financial manager manages a company's assets and debts effectively.

This resource provides instruction for users to:

  • Justify the importance of working capital management
  • State the purpose and steps to complete a cash budget
  • Complete a simple cash budget
  • Demonstrate the use of the cash conversion cycle
  • Explain how the cash conversion cycle is shortened
  • Justify the importance of credit standards
  • Explain the importance of inventory management
  • Compare unsecured and secured short-term liabilities
  • Calculate the cost of forgoing trade discounts
• Managing Current Assets and Current Liabilities

CAPITAL STRUCTURES, DIVIDENDS, AND INTERNATIONAL CONSIDERATIONS

For any business leader, the overall goal is to increase profits for his shareholders. Like other financial managers, the head of a company may use a variety of tools to achieve this goal. However, they most likely take advantage of other areas of finance also, such as capital structure, or the company's mix of debt and equity, and dividend structure, which is a way of distributing cash to shareholders. Finally, most financial managers at least consider international finance, which, as the name suggests, means entering foreign markets.

This resource provides instruction for users to:

  • Define capital structure
  • Describe, in theory, the optimal capital structure
  • Recognize how financial leverage affects Earning Per Share (EPS)
  • List two reasons why dividends matter Indicate when a dividend can be paid
  • Name the factors affecting Dividend Policy
  • List two common types of dividend policies
  • Define stock splits and stock dividends
  • Convert foreign currencies to home currency
  • Describe three methods of international expansion
  • Recall three sources of international risk Identify two techniques for managing international risk
• Capital Structures, Dividends, and International Considerations

Human Resources

OVERVIEW OF HUMAN RESOURCE MANAGEMENT

• Overview of Human Resource Management

EMPLOYEE RECRUITMENT AND PLACEMENT

Suppose a job vacancy has just been announced in your company. This change means you and the rest of the human resource (HR) department will be quite busy. Until you find the right candidate to fill the position, you and your team diligently work behind the scenes to plan the recruitment process and several other important activities. The first step is the job announcement. Before you even begin conducting actual interviews, you most likely conduct a job analysis, pinpoint where to recruit, and write a job description to attract the right candidate.

This resource provides instruction for users to:

  • Use methods, such as interviews, questionnaires, and observation, to collect job analysis information
  • Write job descriptions, including summaries and job functions, using Internet and traditional methods
  • List the internal and external sources of candidates
  • Identify the steps to recruit job candidates effectively
  • Develop a strategy to advertise the available positions
• Employee Recruitment and Placement

TRAINING AND DEVELOPMENT

• Training and Development

EMPLOYEE COMPENSATION AND BENEFITS

The last time you looked for a job, you probably wanted one with good benefits, such as health insurance, paid vacations, and the possibility of a salary increase after successful performance evaluations. The globalization of business and industry has increased the pressure on companies to compensate their workforce in the best ways possible.

Turnovers are costly for organizations. Companies also face the downtime and loss of productivity after employees quit. Therefore, understanding salary surveys, pricing of jobs, and trends in compensation is critical to line managers and human resource (HR) professionals so they can explain the factors affecting their company's pay plans.

This resource provides instruction for users to:

  • Explain the process of establishing pay rates
  • Evaluate the differences in compensating managerial and professional jobs
• Employee Compensation and Benefits

EMPLOYEE RELATIONS

Activists in the mid- to late-twentieth century began to move the world forward in terms of recognizing diversity and lessening the impact of laws that exclude entire groups from certain rights, such as gainful employment. Over the past 40 years, a number of laws and court cases sought to guarantee that everyone seeking employment or promotions would have equal opportunities.

Companies today are required to hire employees based on their credentials alone, without discriminating against their sex, gender, class, religion, or disabilities. As a human resource manager, you need to be familiar with employment laws and Supreme Court decisions so you can identify appropriate behaviors for hiring, promoting, and supporting employees. You should also research laws protecting the rights of workers to organize and join unions. A vital part of your job is developing policies and procedures that preserve employee rights.

This resource provides instruction for users to:

  • Describe the main features of employment discrimination laws Reasons Steps in Managing Diversity Assessing Effectiveness of Diversity Initiatives Strategies
  • Describe the main features of the collective bargaining process Campaign and Election The Supervisor's Role
  • Describe the key components of the grievance procedure
• Employee Relations

GLOBAL HR MANAGEMENT

Large companies constantly introduce new products, such as the iPhone and iPad. Success for these companies  stems from their ability to manage their facilities worldwide.

A global economy and the opportunities it provides to corporations demands new types of expertise, which traditional HR departments often lack. Although technology has eliminated a number of barriers to globalization, many significant barriers remain—notably those related to the selection of managers and employees and providing a support system to maintain productivity.  

This resource provides instruction for users to:

  • List the HR challenges of international business
  • Illustrate how inter-country differences affect HR management
  • Describe ways to improve international assignments through effective HR practices
  • Describe how to staff, train, and manage international employees
• Global HR Management

Business Information System

INTRODUCTION TO BUSINESS INFORMATION SYSTEMS

As technology and communication between businesses expand, professionals need to become versed in how technology, data, and people relate. Business information systems (BIS) are the lifeblood of organizations. BIS process data and provide information to users to help them make smart business decisions. Businesses take a group of interrelated groups that collect data and process it so that it has a meaningful outcome. This information benefits organizations by projecting outcomes, such as a sales forecast or a financial statement. Business information systems are needed to effectively manage a company. But not all information is useful; it must meet certain requirements before it is considered valuable to the user.

All BIS have five components, and the most important is the people component. Your role in the organization will help you gain experience in your job, will provide you with the opportunity to participate in systems development project teams, and may lead to lending your expertise in defining requirements for new systems. When you work in a business setting, finding ways to improve the company will require your technology and social skills. To be a successful employee in any business, you must be able to unite the two skills.

This resource provides instruction for users to:

  • Distinguish between data and information
  • Define information systems
  • Describe the component parts of an information system
  • Explain the importance of information at various levels of an organization
  • Describe various roles in organizational information systems
• Introduction To Business Information Systems

THE BUSINESS PROCESS

Businesses manage their processes by configuring and reconfiguring in response to changing technologies and the needs of the marketplace. To work in the business field requires an in-depth knowledge of the business process. Knowing how everything works together to form a unit will provide you with the big picture of your organization and give you an understanding of the intricate details of the business process.

This resource provides instruction for users to:

  • List examples of business processes
  • Explain the relationship between business processes and information systems
  • Define process model
  • Describe the components of a business process
  • Explain business processes transformations
• The Business Process

ORGANIZATIONAL STRATEGY AND INFORMATION SYSTEMS

The success of his business serves as an example of small business enterprise. To learn why certain companies are successful, and what the owners of the company can to do become successful, you need to examine Porter's models. Porter's models are management tools that help organizations align their information systems to meet their strategy.

When businesses apply these models and identify the correct strategy needed, they are able to pursue their own individual goals and objectives. Using these models when developing information systems helps businesses gain a competitive advantage.

This resource provides instruction for users to:

  • Explain the role of organizational strategy in creating information systems
  • Explain Porter's Five Forces Industry Analysis model
  • Explain Porter's Generic Strategies model
  • Explain Porter's Value Chain model
  • Explain how a competitive advantage can be accomplished through the use of information systems
• The Organizational Strategy and Information Systems

DATABASE CONCEPTS

Data in an organization is vital for decision making. Businesses today are ever expanding and become large corporations with thousands of chains worldwide. It would be nearly impossible for businesses today to function without some sort of control of their information.

Data are organized into operational databases in a certain way and managed in what is known as a database management system. To understand database management systems, you will need to learn about their functions and purposes and how collected data influences future decision making. Data, and subsequent knowledge, can secure an organization's future by helping the organization to make effective decisions. Many companies will go to great lengths to protect their information systems so that their data is unique to their organization.

This resource provides instruction for users to:

  • Explain why businesses use databases and database management systems
  • Identify different data types and their uses
  • Identify benefits related to databases and database management systems
  • Define terms related to databases and database management systems
  • Explain the difference between a database and a database management system
  • Explain the basic responsibilities of database administration
  • Explain the importance of collecting data for future decision making
• Database Concepts

INFORMATION SYSTEMS DEVELOPMENT

When it comes to developing information systems, no single approach is perfect for every organization. Different organizations have varying information needs. For example, the data information entered for a nonprofit organization will differ from that of a home-based business. Each organization uses the approach that best suits its needs and the skill levels of its information technology staff. These organizations will also be able to use their own data to assess their success and prepare for the future.

Regardless of the methodology used, organizations need to be detail-oriented when examining each possible task and scenario to be sure a system meets their needs. Therefore, developers need to work closely with staff and executives to have a clear understanding as to the businesses' goals and their need to meet the demands of their consumers or clientele. To understand information systems development, you will need to learn about the different steps necessary to create, implement, and maintain a new information system.

This resource provides instruction for users to:

  • Outline factors to consider in systems development
  • Describe various system development approaches
  • Describe each phase of the systems development life cycle
• Information Systems Development

ALTERNATIVE SYSTEMS DEVELOPMENT LIFE CYCLE

Goals can be accomplished in many ways.  In business, there must be various ways for companies to use systems development cycles. Without these different cycles, brands and companies would not be able to compete with each other or meet the needs of their own company. Each company must have its own strategy for success; without alternatives to standard systems, companies would all follow on the same path. The alternatives range from those that need little user input to others that require heavy user input. Together, these alternative methodologies account for less than half of all systems development methodologies that organizations use, but they can help organizations meet their specific needs.

This resource provides instruction for users to:

  • Explain the purpose of prototyping
  • Explain object-oriented systems development
  • Define rapid application development Explain eXtreme programming
  • Explain agile methods
• Alternative Systems Development Life Cycle

ERP AND SUPPLY CHAIN LOGISTICS

Think about how businesses were run prior to the mass expansion of companies. Departments worked independently of one another until someone combined the work of these departments to have an end result. This was not an effective tool for business because the process to understand the results and improve the organization would be extremely time consuming. 

To increase communication and efficiency within a department, organizations sometimes use functional systems. To increase communication and efficiency across all departments within an organization, they sometimes use cross-functional systems. All organizations have relationships with suppliers, customers, shippers, and other businesses to compete in the marketplace. To maintain these relationships, many times organizations will employ cross-organizational systems, enterprise resource planning (ERP) systems, or supply chain management systems.

This resource provides instruction for users to:

  • Explain the purpose of functional systems within an organization
  • Describe the advantages and disadvantages of a functional system
  • Identify types of functional systems
  • Explain the purpose of cross-functional systems
  • Compare the advantages and disadvantages of various cross-functional systems
  • Explain the purpose of cross-organizational systems
  • Compare advantages and disadvantages of cross-organizational systems
  • Define supply chain
  • Explain the difference between supply chain profitability and organizational profitability
  • Explain the four drivers of supply chain performance
• ERP an Supply Chain Logistics

COMPUTER NETWORKS

When you think about the term communication, you might envision having a conversation with a member of your family or sending a text message to a friend. While these types of communication are extremely common, especially with the development of the smart phone, they are not the only form of communication. Human interactions like the ones you have through text message or face-to-face with a friend could be classified as organizational communication in the business world. However, in the field of business and technology, communication takes on a much different use and perspective.

Technical communication is the communication that takes place between computers—essentially how computers talk to one another. Data that is stored in our computer is represented in a much different way than how we are used to reading and interpreting messages. With the vast development of technology, understanding the facets of computer communication and networks can help you improve organizational communication and collaboration within your company.

This resource provides instruction for users to:

  • Describe different ways computers communicate and transmit information
  • Define computer communication and networking terms
  • Explain different kinds of networks and their topologies
• Computer Networks

CLOUD COMPUTING AND WEB 2.0

 As opposed to logging onto a computer to complete a task, cloud computing and technologies, such as Web 2.0, allow users to accesses web-based services or remote networks to store and retrieve information. With the development of the cloud, individuals and companies no longer need to rely on the hardware of computers to complete and run applications. Cloud networks on the Internet are able to do much of the same hosting work as a standard computer. Prior to the sharing and hosting services on the Internet, a company's information and documents could only be accessed through a personal computer.

Now with the development of new technologies and networking capabilities, many aspects of business involve cloud computing and Web 2.0. For instance, organizations can now compile and share databases in a network everyone can access. As cloud computing and web hosting advances in their capabilities, companies will no longer need the hardware and software of a standardized computer.

This resource provides instruction for users to:

  • Define cloud computing
  • Explain the organizational use of cloud computing
  • Define Web 2.0
  • Compare the benefits and limitations of using Web 2.0 in an organization
• Cloud Computing and Web 2.0

INFORMATION SYSTEMS AND E-COMMERCE

Can you remember the first time you purchased something online? When the use of the Internet was in its infancy, many consumers were apprehensive to shop online mainly because of the insecurity of not knowing if the site was reliable or if they would ever see their purchases. Now, online shopping is a booming market that can often be done at the convenience of your smart phone or other handheld device.

E-commerce and e-business are growing parts of the business world. Today, organizations are expanding into global markets by using newer online capabilities. Online shopping has become such a large part of the global market that this change might indicate the fading away of traditional in-person shopping outlets, such as the mall or a local store. Even grocery stores allow their customers to make online purchases and have those goods delivered right to their front door.

To understand information systems in e-commerce, you must first learn the models of e-commerce that organizations use today. E-commerce is simply the buying and selling of products and services using the Internet. While many of us have participated in online shopping, you should have an understanding of how e-commerce plays an integral role in business. You should also have a grasp of the nature of e-business and the instant communications that are changing the way people interact.

This resource provides instruction for users to:

  • Describe different e-commerce models
  • Describe the impact of the Internet on commerce
  • Describe different e-commerce models
  • Explain the technology needed to support e-commerce
  • Explain the technology needed to support e-commerce
• Information Systems and E-Commerce

INFORMATION SYSTEMS MANAGEMENT AND ETHICS

In recent years, some companies have made questionable decisions for the sake of profits. Firms have gone bankrupt because of the unethical—sometimes illegal—decisions their employees have made. Most of these situations could have been avoided if the organizations had managed their employees better and explained and demonstrated the importance of ethical behavior in the workplace.

Competition is often a contributing factor to companies committing unethical business practices. In the business world, competition is a necessary and critical component that provides the consumer with choice. However, if an opportunity could provide a business with short-term success, this opens the gateway for corruption. When consumer needs cannot be met in a successful market, competition can turn to corruption. When it comes to information systems (IS), many IS-specific ethical issues exist. When a company lacks in a certain area, using an IS will assist that company in determining weaknesses so it can improve. While there is no methodology that quantifies the results of an IS, organizations can still make changes to their businesses to try to manage the results. Understanding how an organization manages and evaluates its IS department, including how it handles IS-related ethical issues, can help you maintain efficiency and integrity in your job performance.

This resource provides instruction for users to:

  • Explain the importance of information systems management
  • Analyze the role of the information technology department in information systems management
  • Explain the importance of ethics in information systems
  • Analyze various organizational approaches to managing ethics
• Information Systems Management and Ethics

INFORMATION SYSTEMS THREATS AND SECURITY

Since so many companies use the Internet and shared networks to conduct business, it is not uncommon for the threat of a disaster to occur through the World Wide Web. Without knowing it, your company's cyber security network could be compromised, causing monetary damages and large structural losses. To address these potential issues, companies will set up secure networks and monitoring systems to prevent the business's information from becoming compromised. One way to prevent threats to your company's information systems is to back up data. Many companies have an information technology (IT) department in place to protect the company's system from failing. These IT departments provide employees with Internet usage guidelines and security tactics to adapt to prevent major information disasters from occurring. While it is impossible to predict or prevent all threats, if a disaster does occur, knowing your organization's disaster recovery plan will help you get your company up and running.

This resource provides instruction for users to:

  • Identify the types of threats to information systems
  • Explain how an organization can keep its information secure
  • Explain the importance of backing up data
  • Explain the purpose of a disaster recovery plan
• Information Systems Threats and Security

Business Law

LEGAL ENVIRONMENT OF BUSINESS

The Commerce Clause of the Constitution is also an important source of business law. As you study court systems, remember that the United States has a federal court system, and each state has its own court system. Both systems have trial courts and appellate courts.

When individuals challenge laws, they initiate litigation. A person begins civil litigation by filing documents in the trial court.  When parties are involved in civil litigation, a judge or a jury decides the outcome of the case. However, in some instances, parties have a voice in the outcome of their cases. Alternative dispute resolution (ADR) has become an important tool used by parties to settle their legal differences outside the courtroom. Mediation and arbitration are two of the most frequently used types of ADR. When parties mediate, a neutral facilitator guides and helps them reach a conclusion.  

This resource provides instruction for users to:

  • Identify the sources of law in the United States
  • Describe the state and federal court systems
  • Categorize the jurisdiction of federal and state courts
  • Describe the steps involved in civil litigation
  • Compare arbitration and mediation as alternative methods of dispute resolution
  • Relate constitutional law to business and electronic commerce
• Legal Environment of Business

TORT AND CRIMINAL LAW

• Tort and Criminal Law

INTELLECTUAL PROPERTY LAW

Intellectual property transcends many different disciplines, from business to entertainment. Writers want to protect their novels from being copied without permission. Musicians want to protect the music they write from being used without permission. Business owners might have trademarks, patents, and trade secrets they want to protect because they are the key to the owners' successful businesses.

The protection they seek is provided for in the U.S. Constitution, state constitutions, legislation, and common law. The power to protect such works was given to Congress, but the framers of the Constitution decided to limit the length of time protection would be effective. Congress has passed legislation establishing the procedure for protecting property, and it has passed legislation to permit authors and inventors to ask that the protection for their works be extended. Legislation that protects copyrights, patents, and trademarks is federal law. State law usually governs the law of trade secrets.

This resource provides instruction for users to:

  • Define terms related to intellectual property law
  • Explain the legal protection available to the holder of a trade secret
  • Explain the legal protection available to a patent holder
  • Explain the legal protection available to a copyright holder
  • Explain the legal protection available to a trademark holder
• Intellectual Property Law

CONTRACT LAW PRINCIPLES

A contract requires the inclusion of certain elements to be considered an enforceable contract. Under some conditions, the contract must be in writing. If all of the elements of contract formation are not present, a valid contract does not exist.

Contracts are categorized by type. They can be formal or informal, and they can be express or implied. Other types of contracts depend on the basis for the agreement and whether the court decides that a contract exists to prevent a party from being enriched unfairly. Some contracts can be assigned or delegated to others, but in some instances, assignment or delegation could be considered a breach of contract. Remedies for breaches of contract range from money (damages) to equitable relief, such as damages, to specific performance. Other contracts fall within the rules set out by the Uniform Commercial Code rather than the rules established by courts deciding the common law.

This resource provides instruction for users to:

  • Analyze the elements of contract formation
  • Categorize the various types of contracts
  • Describe the various types of third-party rights to contracts
  • Explain the remedies available for breach of contract
  • Describe the applicability of the Uniform Commercial Code (UCC) to contracts for the sale of goods
• Contract Law Principles

NEGOTIABLE INSTRUMENTS

• Negotiable Instruments

AGENCY TRANSACTIONS

• Agency Transactions

EMPLOYMENT LAW

Employment law encompasses a variety of subjects. Workers who are injured during the resource of their employment may be entitled to workers' compensation benefits. The Occupational Safety and Health Act is designed to protect safety in the workplace. Child labor laws regulate the use of children in the employment realm, and Congress has established federal minimum hourly wages. Social Security and unemployment compensation laws are two examples of government programs that provide benefits to workers. Immigrants who come to the United States are required to conform to U.S. immigration and employment laws. While employing illegal immigrants is unlawful, foreign guest workers may obtain visas to work in the United States for a certain time period.

Unions are an important sector of the American workplace. Regulations for union organizing are established in the National Labor Relations Act. Rules relating to union elections, solicitation on company property, and interference with union elections are set forth in the act. Collective bargaining is important in deciding the terms of employment for union members. Negotiating an employment contract can take weeks or, in some cases, months. When the terms of the agreement have been reached, the agreement is called a “collective bargaining agreement.”

State right-to-work laws apply to union membership, dues, and wages. The laws are authorized by Congress but are opposed by unions. Employees can attempt to resolve labor conflicts by striking, picketing, or boycotting an employer. Management can attempt to remedy the same conflicts by locking out employees and hiring replacements. Laws for equal employment opportunity have been enacted to eliminate discrimination in the workplace. Some of the laws cover pay, hiring, and age and disability discrimination.

This resource provides instruction for users to:

  • Analyze the various employment, worker protection and immigration laws
  • Explain the laws related to organizing a union
  • Explain the laws related to the collective bargaining process
  • Analyze the various conflict resolution remedies available to labor and management during the collective bargaining process
  • Describe the various laws related to equal employment opportunity
• Employment Law

FORMS OF BUSINESS ORGANIZATION

Businesses are organized under state law. Each type of business has advantages and disadvantages for the owners. Sole proprietorships are easy to establish. With enthusiasm, some equipment or inventory, and a place to operate, a person can start a sole proprietorship. States require owners of sole proprietorships to apply for licenses to conduct their types of business, but no advance governmental approval is required to operate a business as a sole proprietorship.

In a partnership, two or more people conduct business for profit. Partnerships may be formed verbally or by a written document. They require little or no state government involvement and can last indefinitely, for a limited time, or for a limited purpose. Partnerships can be general partnerships, limited partnerships, or limited liability partnerships.

The corporate form of business organization is required to conform to state registration and filing requirements. The state office that grants permission for a business to be formed as a corporation must approve the name of the corporation and its existence. A corporation has the advantage of limited liability for its shareholders but has the disadvantage of double taxation. Corporations must be registered with the state to provide the name of the person who serves as resident agent to accept service of process and all other legal papers if the corporation is sued. The limited liability company (LLC) is one of the newer forms of business organization. An LLC retains features of the partnership but also has available to it the advantage of single taxation.

This resource provides instruction for users to:

  • Define terms related to forms of business organization in the United States
  • Compare the advantages and disadvantages of operating a business as a sole proprietorship
  • Compare the advantages and disadvantages of operating a business as a partnership
  • Explain the advantages and disadvantages of operating a business as a corporation
  • Explain the advantages and disadvantages of operating a business as a limited liability company
• Form of Business Organization

ETHICAL AND SOCIAL RESPONSIBILITY OF BUSINESS

Today's economy is a global one, and many businesses are adapting to work within an international climate. Some businesses are only involving themselves in the domestic economy, but all businesses have legal, social, and ethical responsibilities. All businesses are subject to the laws of the countries in which they operate. Businesses are responsible for becoming familiar with the laws of their nation and other nations with whom they will interact.

Ethics is a code of behavior. A code of business ethics is a code that businesses follow in the way they conduct business in a specific country. Ethical standards are not necessarily part of the legal framework of a nation. Conflicts can arise when a practice that is considered ethical in one country is considered unethical in the country that is the domicile of the corporation.

Social responsibility addresses issues different from ethical issues. Social responsibility is an obligation on the part of a company to act in a way that does not harm others. Social responsibility may be addressed when child labor is being used to manufacture products and when environmentally questionable practices are employed. The law, ethics, and social responsibility are interrelated in today's business environment.

This resource provides instruction for users to:

  • Explain the relationship of business ethics and social responsibility to the law
  • Compare the five major theories of ethics
  • Compare the four major theories of the social responsibility of business
• Ethical and Social Responsibility of Business

GOVERNMENT REGULATIONS AFFECTING BUSINESS

Government regulates business in two ways. First, congressional, state, and local legislation regulate business. For example, the first large-scale federal government regulation began in 1890 when Congress passed the Sherman Antitrust Act. The Sherman Act was designed to prohibit monopolies. Government at all levels continues to regulate business.

Second, business is regulated by the rules adopted by the administrative agencies. Administrative agencies play important roles in government at the national, state, and local levels.  The purpose of administrative agencies is to implement and enforce law enacted by the legislatures but consumer protection plays an important role in agency regulation.. Federal agencies range from the Internal Revenue Service and the Food and Drug Administration to the Federal Trade Commission. Each agency is charged with implementing the laws enacted by the legislature. Agencies pass regulations that have the force of law. State and local agencies are created in the same way as federal agencies and have similar functions.

This resource provides instruction for users to:

  • Explain the role of administrative agencies in regulating business
  • Evaluate the federal government's role in regulating consumer protection and product safety
  • Explain the federal government's role in environmental protection
  • Explain the various antitrust and unfair trade practice laws
• Government Regulations Affecting Business

PERSONAL AND REAL PROPERTY LAWS

Real property is land and structures that are firmly attached to the land. Personal property is property that is movable. Personal property can be tangible or intangible. Both types of property can be obtained by purchase, gift, or by bequest or devise in a will or inheritance.

When one person agrees to care for the personal property of another person, it is likely that a bailment has been created. A bailment creates responsibilities and potential liability for both parties. Real property can be obtained in the same ways personal property is obtained. However, different types of ownership relate to real property. Joint tenancy, tenancy by the entireties, and tenancy in common are examples.

This resource provides instruction for users to:

  • Explain how to acquire ownership of personal property
  • Explain the rights and responsibilities of the parties in a bailment relationship
  • Describe the various estates in real property
  • Describe the various forms of concurrent ownership of real property
  • Explain how to acquire ownership of real property
• Personal and Real Property Laws

INTERNATIONAL LAW AND GLOBAL BUSINESS

• International Law and Global Business

Business Math

WHOLE NUMBERS, FRACTIONS, AND DECIMALS

All businesses use whole numbers, decimals, and oftentimes, fractions. For example, you would use whole numbers to determine the amount of supplies to order or the number of software licenses to purchase. You would use decimals when preparing the bank deposit or filing the company's quarterly taxes. You might use fractions to represent budget categories or an amount in an advertised sale. The uses for numbers in business are almost as varied as the numbers themselves.

This resource provides instruction for users to:

  • Identify whole numbers Add, subtract, multiply, and divide whole numbers
  • Add, subtract, multiply, and divide whole numbers
  • Identify types of fractions
  • Convert decimals and fractions
  • Add, subtract, multiply, and divide fractions
  • Add, subtract, multiply, and divide decimals
  • Convert decimals and fractions
• Whole Numbers, Fractions, and Decimals

BANKING AND EQUATIONS

Banks offer a number of services. They provide loans, checking and savings accounts, debit cards, and ATMs. Knowing banking basics can help you make informed decisions and be an active participant in managing your funds. Solving equations is an essential skill when working in business or managing your money.

This resource provides instruction for users to:

  • Reconcile bank statements
  • Describe various banking transactions Write account transactions
  • Explain the elements of an equation
  • Solve equations using multiplication, division, addition, and subtraction
  • Use the problem-solving approach to analyze and solve word problems
  • Explain how equations are used to solve mathematical problems
  • Solve equations using multiple operations, containing multiple unknowns, parentheses, and proportions
• Banking and Equations

PERCENTAGES AND STATISTICS

Percents are used commonly in business. Knowing how to find percentages and convert between percents, decimals, and fractions is a fundamental skill that you should become comfortable with. Percent means per one hundred, so if your business is operating at 100% capacity, all machines are up and running. If the business is operating at 80% capacity, it means 20% of the machines can still be brought online to increase production.

Being able to use statistics and graphs to analyze data and share information is also an essential skill in today's workforce.

This resource provides instruction for users to:

  • Write a whole number, fraction, or decimal as a percentage and the reverse
  • Use the percentage formula to identify the unknown
  • Solve percentage problems by identifying the rate, base, and portion
  • Calculate the percentage increase, decrease, rates, or base in percentage problems
  • Identify measures of central tendency
  • Use mathematical equations to find the mean, median, and mode
  • Explain the use of frequency distributions and graphs for reporting data sets
  • Create and interpret a frequency distribution
  • Create and interpret a bar, line, and circle graph
  • Describe the statistical measures of dispersion
  • Calculate range and standard deviation
• Percentages and Statistics

TRADE AND CASH DISCOUNTS, MARKUP, AND MARKDOWN

In business, a continual balancing act exists between pricing to sell and pricing to earn a profit. Starting with the manufacturer's cost up through the chain of buyers to the ultimate consumer, pricing strategies and discounts are being offered to sell more merchandise. Once products are sold, businesses offer trade incentives to encourage timely payment. Incentives for paying within a certain period of time often involve additional discounts.

This resource provides instruction for users to:

  • Explain various merchandising terms
  • Describe how discounts and net price are established
  • Explain how manufacturers and distributors use trade discounts
  • Explain how cost, markup, and selling price can be related
  • Explain various merchandising terms
  • Explain the reasons for markdowns
  • Compute a markdown
• Trade and Cash Discounts, Markup, and Markdown

PAYROLL

The first paycheck you receive from a job is always a surprise. You might be expecting the dollar amount you were told when you were hired, or at least something close to it. However, what you expect will probably not be the amount that ends up on your paycheck or direct deposit. Employers are legally required to deduct taxes from your paycheck, and you will see other deductions on your pay stub if you contribute toward health insurance or retirement funds.

This resource provides instruction for users to:

  • Describe payroll issues that affect both the employer and the employee
  • Calculate gross pay based upon salary, hourly, piecework, and commission
  • Describe payroll issues that affect both the employer and the employee
  • Compute various tax withholdings and net pay
  • Compute the employer's share of taxes
• Payroll

INTEREST, DISCOUNTS, CREDIT, AND VALUE

When borrowing or investing money, it is important to understand the terminology being used and how the amount you will need to repay is determined. Not all credit or loan options are the same. Be aware of any fees that will be included, the interest rate, the time frame for the loan, and how often interest is calculated. You should also explore how paying off a loan early can save you money in interest.

This resource provides instruction for users to:

  • Explain the simple interest formula
  • Explain ordinary and exact time and interest
  • Calculate simple interest, maturity value, principal, rate, and time
  • Calculate ordinary time, exact time, due date, daily interest rate, and simple interest
  • Identify the elements of a promissory note
  • Calculate promissory note items
  • Define terms related to consumer credit
  • Calculate the amount financed, installment price, and finance charge
  • Explain how installment loans and closed-end credit are calculated
  • Calculate the installment payment and Annual Percentage Rate (APR)
  • Calculate the interest refund using the rule of 78
  • Explain the rule of 78 Explain open-end loans
  • Describe how compound interest, future value, and present value are calculated
  • Calculate the finance charge and balance for open-end credit
  • Calculate the future value, present value, and effective interest
• Interest, Discounts, Credit, and Value

ANNUITIES, SINKING FUNDS, STOCKS AND BONDS

Many types of investments are available to individuals. Each type comes with its own rewards and risks. As an investor, you will be asked to assess your willingness to take risks and to determine what your long-term investment goals are. Some investments, such as annuities and sinking funds, require regular contributions. Stocks and bonds are purchased in quantities at market price. Stockholders own shares in the company and hope to sell their shares at a price higher than when they bought the stock. Bondholders invest to earn interest and have the face value of the bond paid in full by a specific date.

This resource provides instruction for users to:

  • Explain annuities and sinking funds
  • Calculate the future value of an annuity, the present value of an annuity, and the sinking fund payment
  • Explain annuities and sinking funds
  • Calculate the future value of an annuity, the present value of an annuity, and the sinking fund payment
  • Define terms as related to stocks and bonds Interpret stock listings Interpret bond and mutual fund listings
  • Calculate and distribute dividends Interpret bond and mutual fund listings
  • Calculate the price of bonds Interpret bond and mutual fund listings
• Annuities, Sinking Funds, Stocks and Bonds

MORTGAGES

When you initially think about buying property, you may believe the agreed-upon selling price is the amount you will have to pay and that you can pay that amount over a number of years. However, if you need to borrow money to pay for the property, other costs are involved.

Lending institutions do not approve everyone's loan application. You need to have good credit rating, money to place as a down payment, and a way to afford monthly payments. Then there is the interest on the loan—lending institutions don't loan money and expect nothing in return. When securing a mortgage, there are many decisions to make. You should try to be as informed as possible before embarking on the process.

This resource provides instruction for users to:

  • Define terms related to mortgage payments
  • Explain how mortgage payments are calculated
  • Calculate the monthly mortgage payment and total interest
  • Produce an amortization schedule
• Mortgages

DEPRECIATION

Just as a new car loses some of its value as soon as it leaves the dealer's lot, business assets also lose their value. That loss in value is called depreciation. Businesses can deduct the amount of depreciation for the year from their taxable income. This saves them money on each year's tax filings.

This resource provides instruction for users to:

  • Explain depreciation methods for financial statement reporting
  • Explain depreciation methods for Internal Revenue Service (IRS) reporting
  • Calculate depreciation using the straight-line, units-of-production, sum-of-the-years'-digits, and declining balance methods
  • Calculate depreciation using various tax depreciation methods
• Depreciation

INVENTORY

Inventory plays a key role in most businesses. Retail businesses rely on accurately tracking inventory to keep inventory in stock and to determine the cost of remaining inventory. Companies that do assembly work rely on accurate inventory counts to supply upcoming orders. Inventory and overhead usually account for a large portion of a business's expenses and are also used to determine how much taxable income a business has.

This resource provides instruction for users to:

  • Explain the concepts of inventory, turnover, and overhead
  • Calculate ending inventory and cost of goods sold using the specific identification, weighted-average, FIFO (First In, First Out), LIFO (Last In, First Out), retail, and gross profit methods
  • Explain the concepts of inventory, turnover, and overhead Compute the inventory turnover rate and overhead
• Inventory

INSURANCE AND TAXES

Insurance and taxes both require money—from you. Insurance gives you the chance to protect your investment in property and vehicles. Health insurance is also available to help cover health-related costs and life insurance to help those you leave behind. When selecting insurance policies, you should compare coverage and cost. Taxes are a way for governments at all levels to raise money. Sales tax, income tax, and property tax will most likely have the largest impact on your finances.

This resource provides instruction for users to:

  • Define various terms related to insurance
  • Explain the purpose of insurance and how premiums and refunds are determined
  • Estimate life, property, and vehicle premiums and cancellation
  • Describe the various types of taxes collected by the government
  • Explain how different types of taxes are determined
  • Calculate sales, property, and income taxes
• Insurance and Taxes

FINANCIAL STATEMENTS

When you are involved in the running of a business, it is important to understand the business's financial situation. Did it turn a profit this year? How do current net assets compare to net assets at this time last year? What percentage were operating expenses of gross profits? By keeping balance sheets and other financial statements, the information necessary to answer these questions and many more is readily available.

This resource provides instruction for users to:

  • Explain the purpose of a balance sheet and income statement
  • Complete a balance sheet and income statement
  • Explain the purpose of a balance sheet and income statement
  • Complete a balance sheet and income statement
  • Describe the purpose of a financial ratio
  • Complete a balance sheet and income statement
  • Analyze financial statements using financial ratios and analyses
• Financial Statements

Business (Intro To)

THE BUSINESS ENVIRONMENT

The type of economic system a region has depends on a number of factors, which are often referred to as factors of production. The number of people who contribute to the production, known as labor, combines with the amount of capital, or money, needed to develop a business. In addition, these factors merge with available tangible and data resources. All economies are driven by the law of supply and demand. If they balance each other, the market price is reached—but that is rare. More often, a surplus or shortage is created.

A market economy is also one that revolves around the issue of competition. Four kinds are typically found and are influenced by several elements, including the number of other companies competing with the same type of product or service, how complicated entering and industry is, and how much control the company has over setting its prices. Finally, all businesses are affected by external environmental factors, including technology, the government, social standards, and the pressure to meet and exceed core competencies.

This resource provides instruction for users to:

  • Define the goals and functions of business
  • Identify the factors of production in an economic system
  • Explain the major features of a market economy
  • Explain the concept of supply and demand
  • Define the various degrees of competition in a free enterprise system
  • Explain each of the major types of economic systems
  • Define the dimensions of the external U.S. business environment
  • Explain emerging challenges and opportunities related to the U.S. business environment
• The Business Environment

BUSINESS ETHICS AND SOCIAL RESPONSIBILITY

• Business Ethics and Social Responsibility

NEW BUSINESS VENTURES IN THE U.S. AND INTERNATIONAL MARKETS

• New Business Ventures In the U.S. and International Markets

MANAGING THE BUSINESS ENTERPRISE

Whether for a small company with a handful of employees or for a large corporation with multiple departments and branches, being a manager takes a great deal of skill, experience, dedication, and hard work. The process of effective management traditionally begins by setting goals, which may be short or long term and may also be reflected in the company's mission statement. Once those goals have been put into words and become part of the company's purpose, managers must move on to the next step: creating the strategies to put those goals into motion.

Finally, an organization has to decide what organizational format fits it best. Some companies choose to follow a functional organization, while others prefer a divisional, a matrix, or an international organization. The informal groups that form within a company, however, tend to determine and disseminate the values found within its corporate culture.

This resource provides instruction for users to:

  • Identify the planning functions of effective management
  • Describe the four activities involved in the management process
  • Produce an organizational chart for various management levels and areas
  • Identify the basic skills required of an effective manager
  • Define corporate culture
  • Define organizational structure
  • Identify the building blocks for organizational structure
  • Map the organizational structure necessary for effective decision making
  • Explain the ways organizations can be structured
  • Identify emerging trends in organization design
• Managing The Business Enterprise

MANAGING AND MOTIVATING EMPLOYEES

An important factor in whether a company succeeds or fails is its employees. A company staffed with loyal, dedicated, and competent employees is one that has a strong chance to thrive and grow. Acquiring good employees begins with careful and thoughtful hiring. Before you look for applicants inside or outside of the company, each job must be analyzed and described. You cannot know if you are hiring the right person with the right skills if you don't know exactly what the job entails.

The hiring process often involves a combination of application forms, tests, and interviews. As you go through this process, keep in mind that a number of legalities are in place to prevent discrimination and to govern sexual harassment and workplace safety. Once the hiring process is over, training takes place. Ensuring employees are thoroughly trained is important, as is including a full discussion of indirect job details such as compensation, benefits, and incentives. The managerial style used with employees varies from one company to another, but overall, a democratic style is preferable to an autocratic one. A democratic style increases employee satisfaction and motivation, which leads to loyal workers.

This resource provides instruction for users to:

  • Define human resources
  • Outline the steps in human resource staffing
  • Identify ways a workforce is developed
  • Define various ways employees are compensated
  • Explain the legal issues associated with human resources
  • Explain why workers organize into labor unions and utilize collective bargaining
  • Explain the theories of motivation in the workplace
  • Explain strategies used to improve motivation and job satisfaction
  • Compare common management styles
• Managing and Motivating Employees

MARKETING PROCESSES

• Market Processes

PRODUCT PRICING, DISTRIBUTION, AND PROMOTION

Three of the most complex and important elements of business include pricing, distribution, and promotion. Knowing what numbers to put on a price tag is a far more complicated decision than many people are aware. Companies have to look at all costs of production and make sure the price for the item covers them—and this is just to break even.

Distribution also requires many decisions. To which stores should the products be sent? Who is going to sell the item—wholesalers, retailers, or a mix of both?

Finally, promotion is also an area where many choices have to be made. Consumers cannot buy a product, service, or idea if they don't know it exists. Promotion is what gets that information out to the public, and then works to describe it, proves it is the best option, and persuades customers to buy it. Many factors affect this process, including psychological methods, offering incentives, and choosing how and where to run ads.

This resource provides instruction for users to:

  • Define a product in terms of a value package
  • Describe the new product development process
  • Describe the stages of the product life cycle
  • Explain how price is determined for a product
  • Analyze pricing strategies and tactics
  • Explain the distribution mix
  • Describe common distribution strategies
  • Explain the promotion mix
  • Explain how products are advertised
  • Outline the personal selling process
  • Describe various promotional strategies
• Product Pricing, Distribution, and Promotion

PRODUCTIVITY AND QUALITY

Other important elements of business include productivity and quality. Part of operations planning is being able to make accurate and precise predictions. Managers forecast future demand by planning capacity, location, layout, quality, and methods. Scheduling is an element within productivity. How much the customer is involved depends on whether the service is low contact or high contact.

The four primary types of materials management for most companies include transportation, warehousing, purchasing, and inventory control. Productivity can be measured by growth rate, by industry, and companywide. Productivity and quality are used in today's marketplace as competitive tools. These tools include investing in innovation and technology, adopting a long-run perspective, and improving the service sector.

This resource provides instruction for users to:

  • Distinguish between goods production and service operations
  • Identify the factors involved in operations planning
  • Explain factors involved in operations scheduling
  • Explain factors involved in operations control
  • Relate quality to productivity
  • Explain how one can manage for quality
  • Identify the tools used for total quality management
  • Define supply chain management
  • Identify various strategies used to improve productivity and quality
• Productivity and Quality

INFORMATION SYSTEMS AND COMMUNICATION TECHNOLOGIES

• Information Systems and Communication Technologies

PRINCIPLES OF ACCOUNTING

Numbers, numbers, numbers—whether a company is new or old, big or small, independent or part of a chain, you can be assured its business will involve a great many numbers. It will have many assets and liabilities, plus owners' equity. Those numbers will be collected, analyzed, implemented, and discussed by a variety of people connected with the business.

While accountants, both certified public and private, are the main people who work with ratios and formulas, they are not the only ones. Managers and employees will be involved with these numbers, as will investors, tax authorities, and government regulatory agencies. You will likely make a number of investment decisions during your lifetime. Understanding how to evaluate a company's performance will be key to making wise decisions with your own money.

This resource provides instruction for users to:

  • Identify the roles of accountants in business
  • Define the different types of accounting
  • Identify the components of a balance sheet Identify the components of an income statement
  • Identify the components of a cash flow statement Identify the components of a budget
  • Explain the use of various financial ratios
  • Explain specific issues related to international accounting
• Principles of Accounting

BANKING AND FINANCE

No business, regardless of product, service, size, or location, can succeed without money being spent and earned. Understanding how money works, who has it, and where it can be invested is important. You need to know how to make your own financial plan. Money is something that can be divided up, moved around, and exchanged. It has a recognized value that is accepted by others. Many monetary resources are spendable, while others have to be converted to be spent. The nation's banking system consists primarily of deposit institutions, such as commercial banks and thrift institutions, and non-deposit institutions, such as pension funds, insurance companies, finance companies, and securities investment dealers.

Much of the money system in this country is ruled by the Federal Reserve, or the Fed, which has a number of essential roles in the United States, including making sure that the right amount of currency is circulated in the hopes of warding off either inflation or recession and clearing checks. While stocks and bonds are quite different from each other, they both play a very important role in the current world of business. Getting an inside look at stock exchanges such as NASDAQ and the New York Stock Exchange will give you a better understanding of how investments in companies often boil down to a series of transactions. Whether you realize it or not, all of these systems, regulations, and services affect your personal finances. Examining your finances and creating a sound financial plan will lead you confidently into the future and help to ensure long-term financial success.

This resource provides instruction for users to:

  • Describe the characteristics and functions of money
  • Describe the different kinds of financial institutions that make up the U.S. financial system
  • Identify special financial services in the U.S. financial system
  • Discuss the structure and function of the Federal Reserve System
  • Identify the tools the Federal Reserve System uses to control the U.S. money supply
  • Identify issues related to international banking
  • Define the different types of stocks and bonds 
  • Describe various investment opportunities
  • Analyze the process by which securities are bought and sold
  • Explain how the securities market is regulated
  • Describe the characteristics and functions of money
  • Describe various investment opportunities
• Banking and Finance

FINANCIAL AND RISK MANAGEMENT

The financial manager of a business must deal with all types of financial decisions. Some relate to short-term funds and to the daily operating expenses of a company. These funds might come from credit or secured or unsecured loans. Other decisions revolve around long-term funding, such as debt, equity, and hybrid financing. When making huge decisions such as these, the competent financial manager must keep the level of risk in mind. Making conservative decisions means less risk, but it usually also means less return. Aggressive decisions, on the other hand, carry more risk but have the potential for greater return.

If you have ever taken out an insurance policy of any kind, you know that the whole focus of any insurance company is risk. Companies sometimes take their risk to an insurance company and find out if it is insurable. If it is, then the insurance company will have a variety of plans that might be applied, including liability, workers' compensation, property, business interruption, life, group life, health, and disability income insurance plans.

This resource provides instruction for users to:

  • Describe the responsibilities of a financial manager
  • Distinguish between operating expenditures and capital expenditures
  • Identify sources of short-term funds
  • Identify sources of long-term funds
  • Explain the risk-return relationship
  • Define risk management
  • Outline the steps in a risk management process
  • Identify the types of insurance that can be purchased by a business
• Financial and Risk Management

Business Management

INTRODUCTION TO MANAGEMENT

The role of management in business today is different from what it was a generation ago, but many of the elements are still the same. Managerial success still rests on certain traits that good managers either possess or acquire. They are knowledgeable about their business, which gives them more insight and makes them better problem solvers. They are good communicators, and they understand that being a good listener is a particularly valuable skill. They can multitask when necessary, but they understand how to set priorities. They make a point of having good interpersonal skills, both inside and outside the workplace.

Managers all focus on the same functions—planning, organizing, leading, and controlling. Managers are charged with the day-to-day operations of the company, but they also need an eye turned toward the future. In the past few years alone, managers have seen how important it is to be flexible. A global economy has made transacting business more exciting but also more complicated. A more diverse workforce and customer base means managers often need to develop a better sense of different cultures. The rise of e-commerce has probably had the greatest effect on how people conduct business, which means managers need to understand its impact not just on clients and customers but on employees and the company itself.

This resource provides instruction for users to:

  • Describe characteristics of good managers
  • Describe the impact that management theories have had on the functions of management
  • Analyze how management theories and techniques have evolved over time
  • Identify current trends and issues facing managers
• Introduction To Management

SOCIAL RESPONSIBILITY AND MANAGERIAL ETHICS

Although companies sometimes question whether becoming socially responsible is too costly to the bottom line, research has shown that the impact on long-term profits is small if it exists at all. Some companies insist on doing only what is legally required; others base their involvement on customer or shareholder preferences, while still others make the issue a major part of their business. Ethical behavior is a matter of personal choice, but employees who work for a company with strong ethical standards are more likely to adhere to those standards.

Companies can help guide their employees' ethics through a series of actions, including hiring people from the start who have demonstrated high ethical standards, providing ethics training, offering support for employees who may be facing an ethical dilemma, and practicing ethical behavior at all levels. Some companies find that establishing their own code of ethical behavior is helpful because it provides a concrete guideline to help tackle any ambiguity about the ethics of an issue.

This resource provides instruction for users to:

  • Identify how an organization's social involvement can affect its economic performance
  • Describe the effects of shared organizational values
  • Recognize the factors that affect ethical or unethical behavior
• Managing In A Business Environment

SOCIAL RESPONSIBILITY AND MANAGERIAL ETHICS

Although companies sometimes question whether becoming socially responsible is too costly to the bottom line, research has shown that the impact on long-term profits is small if it exists at all. Some companies insist on doing only what is legally required; others base their involvement on customer or shareholder preferences, while still others make the issue a major part of their business. Ethical behavior is a matter of personal choice, but employees who work for a company with strong ethical standards are more likely to adhere to those standards.

Companies can help guide their employees' ethics through a series of actions, including hiring people from the start who have demonstrated high ethical standards, providing ethics training, offering support for employees who may be facing an ethical dilemma, and practicing ethical behavior at all levels. Some companies find that establishing their own code of ethical behavior is helpful because it provides a concrete guideline to help tackle any ambiguity about the ethics of an issue.

This resource provides instruction for users to:

  • Identify how an organization's social involvement can affect its economic performance
  • Describe the effects of shared organizational values
  • Recognize the factors that affect ethical or unethical behavior
• Social Responsibility and Managerial Ethics

DECISION MAKING

The process of decision making involves a number of steps that can simplify the process, if not the decision itself. Identifying the issue at hand is clearly the first step. From there, it is necessary to gather the required information to help figure out what sort of solution would work best. After formulating solutions, you can weigh the advantages and disadvantages of each, until you can finally make your selection and complete the process. Which steps you follow and how you follow them is in part determined by what sort of decision you make.

Depending on such factors as the nature of the situation and your own decision-making style, your decision for any given situation may be rational—or it may be based on intuition. If you are faced with a situation in which you have all the facts and everything is clearly spelled out, you will be able to make a rational, pragmatic decision. If you have a situation that isn't as clear, your decisions will likely be more intuitive—based on “feeling” rather than anything tangible. Intuitive decisions may be based on feeling, but in fact they are probably less random than we think. Our decision-making process, even when we make intuitive decisions, is based in part on our own knowledge, experience, and personal values. Sometimes a situation will be so unusual that it will call for a more creative approach to decision making than just following a series of steps. And for some situations, the decision doesn't have to be perfect—there are times when a decision that's “good enough” is all that is needed.

This resource provides instruction for users to:

  • Explain the steps to decision making
  • Describe decision-making styles
  • Identify the manager's role in decision making
  • Identify pitfalls to decision making
• Decision Making

PLANNING AND THE MANAGER'S ROLE

No company can succeed without planning. Through the planning process, companies can identify the goals they need to meet and then create a framework for attaining those goals. The actual goals can cover everything from increasing revenue to building cash reserves to gaining market share to improving product quality. Many companies compile lists of stated goals for the public; those goals tend to be very broad in scope. Plans can be short-term or long-term; they can be based on any issue the company needs to control.

Plans don't work as well with issues that rely on flexibility or creativity. When a plan works very well, managers are often reluctant to alter it for new situations, even if the new situation is different from the old one. The bottom line is that plans, like anything else, should be used intelligently and with an open mind.

This resource provides instruction for users to:

  • Explain the steps to goal setting
  • Identify types of plans
  • Explain the importance of having stated goals and plans
  • Describe the purposes of planning
  • Explain the challenges associated with goal setting and planning
• Planning and The Manager's Role

STRATEGIC MANAGEMENT AND PLANNING TECHNIQUES

Companies that want to succeed over the long-term need to understand strategic management. The process itself is straightforward: identify the company's mission and goals, perform both internal and external analyses of the company, decide what actions need to be taken, take the required actions, and evaluate the results of those actions. Different organizational strategies can help companies through the process. Companies need to choose the strategies that best fit their needs and be willing to adapt if necessary.

Strategic management gives managers a road map that shows where problems are and where they might develop. Armed with practical information, managers can prepare for changes and know how to accommodate those changes when they arrive. Strategic management also provides a stronger sense of unity among a company's seemingly disparate departments; it gives everyone a sense that they are working toward the same goals. Project management likewise consists of simple steps: stay on schedule, keep on or under budget, and follow the stated instructions and specifications.

This resource provides instruction for users to:

  • Describe organizational strategies
  • Explain strategic management process
  • Describe the project management process
  • Identify the challenges related to organizational strategies and processes that managers face in today's business environment
• Strategic Management and Planning Techniques

ORGANIZATIONAL STRUCTURE AND COMMUNICATIONS

Organizational structure—the formal arrangement of jobs within a company—takes many forms, depending on the company's needs and also on whether the company has an innovative streak. Smaller companies often use a simple structure, with authority concentrated centrally and few formal departments, to address their needs adequately. Companies with groups of employees who have the same skills may turn to a functional structure that allows those employees to work together.

Divisional structure is what we think of when we envision a traditional company—a group of autonomous departments tied together through a chain of command system. More innovative structures have been developed to accommodate different workplace needs, each with its virtues and flaws.  The Internet and email have led to a rise in informal communication among employees. This allows them to communicate more efficiently, but they need to be aware that with few boundaries, it is up to them to keep their messages focused and on point.

This resource provides instruction for users to:

  • Evaluate the strengths and weaknesses of an organizational structure
  • Explain issues dealing with chain of command
  • Analyze methods to manage organizational communication
• Organizational Structure and Communications

HUMAN RESOURCE MANAGEMENT

In simplest terms, human resources (HR) is the “people” side of management. The HR department in most companies oversees employee recruitment and hiring. Beyond that, HR plays a role in employee orientation, training, and career development; offers support when workplace issues arise; and handles compensation and benefits.

The modern workplace is constantly changing, and HR managers play a vital role in helping companies and employees face change. Management may have to change the way certain tasks are done, the role technology plays in how the work gets done, or how the people do their work and interact. Getting people to change can be particularly difficult, and HR's task in that case is to help those resistant to change become more accepting. In addition, the HR department is often called upon to help lessen the stress that comes with so many changes. This can include anything from helping redesign jobs to offering employee counseling.

This resource provides instruction for users to:

  • Identify the elements of the human resource management process
  • Explain how managers can minimize employee stress
  • Explain how managers can effectively deal with change
  • Explain contemporary issues that HR managers must face
• Human Resource Management

THE PSYCHOLOGY OF MANAGEMENT

A person's behavior is the result of several factors—two of the most important being learning and culture. Many companies give prospective employees behavior assessments; these may provide some basic information, but they don't truly define a person's behavior. It is relatively easy for managers to influence the behavior of their employees. They can employ simple techniques, such as positive reinforcement, negative reinforcement, and punishment.

Teams consist of people working together on one project. Team members may all have the same skills and background, or they may be cross-functional (each has a different skill or expertise). The most successful teams have goals that are clear and well communicated; communication, in fact, is a key component of an effective group or team. The best groups and teams are committed to their goals, and their members share a mutual trust.

This resource provides instruction for users to:

  • Identify principles of learning Identify factors that influence human behavior
  • Explain the impact culture has on one's behavior and personality
  • Explain factors that contribute to team success
  • Describe learning principles managers can utilize to affect employee behavior
  • Compare teams and groups
  • Explain approaches managers can take to effectively communicate with employees
• The Psychology of Management

MOTIVATING AND LEADING OTHERS

Giving employees an incentive to work harder—to strive to do their best—makes sense on many levels. It boosts profits and builds the company's reputation, and it also gives employees pride and a sense of accomplishment. The key is to find what motivates your employees most effectively. Today's workforce isn't easy to read; traditional rewards,  such as pay raises and promotions, may not be the best choice. For example, a growing number of people are either single parents or caring for an elderly parent at home. For these employees, the best reward may be more vacation time or the ability to telecommute.

The diverse needs of the workforce make it necessary for managers to take the time to figure out what the best motivators will be for individual employees. Finding out what motivates employees is one way to build their trust and loyalty. This is important for anyone in a leadership role. Successful managers are good leaders. They are confident and smart, driven and energetic. Most of all, they have a genuine passion for leading. There are many definitions of leadership, and different situations call for different leadership skills. The leader who plans everything methodically with little help from employees may differ from the leader who meets with employees to discuss ideas and plans and to get their input. Depending on where they work, each may still be an effective leader. The key factor that determines success is whether they treat their employees with respect and earn their trust and loyalty.

This resource provides instruction for users to:

  • Identify challenges faced by managers in motivating employees
  • Explain theories of motivation
  • Explain leadership challenges facing today's managers
  • Recognize various leadership theories
  • Identify current approaches to leadership
• Motivating and Leading Others

CONTROLLING ORGANIZATIONAL PERFORMANCE

Control systems are valuable for all types of businesses because they help identify what's getting done, what's not getting done, and what should be getting done. By using these systems, companies can take this information and put together action plans that will allow them to make improvements. Ultimately, these improvements can make business more profitable, better organized, and more competitive.

The type of control system depends on the type of business and its overall direction; some systems focus on marketing, others focus on administrative performance, and others focus on corporate culture. Many businesses will make use of more than one type of control system.

Modern business faces many of the same issues that have existed for generations, but an increasingly global business model and the rise of electronic communication (in particular the Internet) have meant that companies are now dealing with cultural and customer issues far beyond any scope they might have imagined. Control systems are vital to companies that want to make sure their operations are able to rise to these new challenges and opportunities.

This resource provides instruction for users to:

  • Explain characteristics of approaches to control systems
  • Diagram the control process
  • Explain why control is an important management function
  • Explain methods used to manage organizational behavior
• Controlling Organizational Performance

OPERATIONS MANAGEMENT

Operations management—the management of the production of goods or services—is one of the most critical components of the drive for obtaining the competitive edge. Taking it a step further is the value chain approach, which tracks products from start to the finish. Controlling the entire process is a way to make it more efficient, more accountable, and more profitable. Operations management and the value chain work for both services and tangible goods.

Quality is a crucial aspect of the production process. Companies strive to improve the quality of their products and services; the higher the quality, the stronger the competitive advantage. In evaluating a product to determine its quality level, companies need to look at every aspect—what the product does and how, the durability of the product and how easy it is to repair, and how the product looks and whether it is aesthetically pleasing. For quality service, the process is similar; companies look for timeliness, consistency of service, courtesy and helpfulness, convenience, and accuracy.

This resource provides instruction for users to:

  • Identify current issues of operations management
  • Explain why operations management is important to organizations and managers
• Operations Management

Supervision

DO YOU HAVE WHAT IT TAKES TO BE A SUPERVISOR?

Not everyone is cut out to be a supervisor; there are certain skills and competencies that a candidate must have to be qualified for the position. Perhaps you have always wondered if you have the skills and the desire to hold a management position, or maybe you are thinking about the next steps now that you have been promoted to a supervisory position. Your primary goal as a supervisor should be to create a sense of "can do!" through exploring different strategies and styles to become efficient and effective.

One of the first things that you and most people will want to know when they take on any new position is what will be the biggest challenges. Becoming a supervisor in an organization is no different; there are a number of challenges that you will face and will want to be prepared for in advance. This will help you get a sense of what you may deal with on a day-to-day basis and may provide you with clues as to what will be the source of your biggest frustrations. To get your feet wet and give you a first look at gauging whether or not you have what it takes to become a supervisor, you first need to understand the skills and competencies one must possess. You also should develop a better understanding about the challenges that supervisors are likely to experience.

This resource provides instruction for users to:

  • Describe characteristics and competencies needed to be an effective supervisor
  • Describe the role and responsibilities of the supervisor
  • Describe the role and responsibilities of the supervisor
  • Identify personal goals for improving effectiveness as a supervisor
  • Describe how globalization, technology, and diversity impact the supervisor's job
  • Explain what it means to act and react ethically as a supervisor
• Do You Have What It Takes To Be A Supervisor?

PAPERWORK AND PROFITABILITY

• Paperwork and Profitability

PEOPLE AND PRODUCTIVITY

Staffing an organization can be one of the most challenging jobs for the human resources department. They need to identify what type of personnel an organization needs and then recruit, hire, and train the new employees. When it comes to recruiting and retaining employees, the supervisor's relationship with human resources can have a huge impact.

Supervisors need to know how to control all elements of their working environment. Controlling deals with measuring performance and instituting controls that monitor productivity and profitability. In order for you to fully understand the best way to increase productivity and workflow, you must first understand how to staff your organization. This process is crucial to helping an organization meet its goals and fulfill its purpose. You must also understand the steps involved in the control process and how it can improve the efficiency and productivity around the office.

This resource provides instruction for users to:

  • Describe the human resource management process
  • Discuss the influence of government regulations on human resource decisions
  • Describe the human resource management process
  • Describe methods of evaluating performance to increase productivity and profitability
  • Identify compensation systems, training, and development plans as recruitment and retention strategies
  • List the characteristics of control systems
  • Compare positive and negative aspects of preventive, concurrent, and corrective supervisory control
• People and Productivity

WHO DECIDES WHAT AND HOW?

In the business world, it does not matter if you supervise workers in a woodshop, salespeople at a car dealership, or accountants at a major corporation; you will need to make decisions daily. To make the best decisions, you must be consciously aware of the decision-making process. Recognizing the decision-making process will help when you have to make more complicated decisions.

To fully understand the best way to make decisions, you must first understand the decision-making process and the different types of decision-making styles. Additionally, understanding the different types of problems, the different types of decisions, and making decisions that are ethical can help you succeed at reaching the next level as a supervisor.

This resource provides instruction for users to:

  • List the seven steps in the decision-making process and four types of decision-making styles
  • Discuss common decision-making errors Discuss common decision-making errors
• Who Decides What and How?

REWARDS AND RESULTS: WIN, LOSE, OR TIE?

• Rewards and Results: Win, Lose, Or Tie?

SUPERVISORS' LEADERSHIP STYLES

• Supervisors' Leadership Styles

WHEN AND HOW TO COMMUNICATE

Disagreements happen all the time, as it is a part of human nature to not necessarily agree with everyone you meet. However, just because two people disagree does not mean that their conversation existed without an understanding. In these situations, the two people do not see things the same way, but the communication between the two people may be perfect.

Communication essentially deals with the level of understanding as opposed to an actual agreement between the communicators. Successful supervisors have the ability to communicate effectively and efficiently. While outstanding technical skills are important, many experts say that developing your communication skills may help you climb the career ladder even faster as you move into management positions. To fully understand when and how to communicate, you must first understand the communication process, barriers to communication, and tips for giving effective feedback. As you go through, think about different areas where you can improve on your communication.

This resource provides instruction for users to:

  • Differentiate between formal and informal communication and how each affects performance
  • Describe assertiveness techniques that can be used to improve communication
  • Describe techniques and behaviors to overcome communication barriers and provide effective feedback
• When and How To Communicate

STIMULATING YOUR TEAMS' SUCCESSFUL PERFORMANCE

We are all probably familiar with the concept of team in relation to sports. The team concept is now becoming more prevalent in the business environment. Supervisors who understand how to utilize teams and deal with the challenges of working with them will likely be effective leaders. To fully understand the team concept in the business world, you first must understand team development. Supervisors must be familiar with certain strategies when working with teams to produce successful outcomes.

This resource provides instruction for users to:

  • Explain how group cohesiveness influences productivity
  • Identify characteristics of emergent leaders in an informal group
  • Describe how a team's morale and productivity reflect the supervisor's behavior and attitude
• Stimulating Your Teams' Successful Performance

KEEPING EMPLOYEES ON TRACK AND SAFE ON THE JOB

One of the main responsibilities of a supervisor is to conduct regular evaluations, or performance appraisals, of employees. There are different methods for conducting appraisals; the best methods will be able to do it with reason and accuracy. Another function of a supervisor is to maintain a safe and healthy work environment that facilitates high performance from employees. Having employees that feel secure can lead to better productivity from them.

To better understand the best ways to make sure that your employees remain both safe and on track while on the job, you must first understand the different methods for conducting performance appraisals and the best ways to do it fairly and accurately. You will also need to learn about the importance of consistent, positive, performance-related, informal, and formal feedback. Finally, you need to understand the Occupational Safety and Health Act (OSHA) and the methods of maintaining a safe and healthy work environment that can facilitate high performance from employees.

This resource provides instruction for users to:

  • Differentiate between formal and informal performance appraisals
  • Discuss ethical and legal issues that may emerge in performance appraisals
  • Describe individual and organizational responsibilities for risk management and workplace safety
  • Describe the leading causes of safety and health accidents and how they may be prevented
  • Discuss ways to cultivate a workplace environment that encourages health, wellness, and a "fully fit" workforce
• Keeping Employees On Track and Safe On the Job

OPPORTUNITIES: MANAGING CONFLICTS AND CHALLENGES

While there are wonderful and very enjoyable parts to a supervisor's job, there are other aspects that are not as enjoyable. Whether it is supervising neighborhood children or asking for quiet during a town hall meeting, conflict resolution, politics, and maintaining order are important and sometimes challenging aspects of everyday interactions among people.

To fully understand how to manage conflicts, you must first understand the basic elements that create conflict, conflict-resolution techniques, and the importance of positive conflict within an organization. You must also obtain an understanding of the political skills involved with disciplining and the strategies you can use to develop your negotiation skills with employees.

This resource provides instruction for users to:

  • Describe techniques for resolving conflict
  • Discuss negotiation strategies, organizational politics, and disciplinary interventions
  • Describe creative problem solving, active listening, and communication techniques that improve employee/supervisory relationships
• Opportunities: Managing Conflicts and Challenges

ATTENTION TO DETAIL

As a supervisor, you should ask yourself a few questions in regard to how you as both a worker and a leader deal with change. Do you consider yourself a person who likes change, or are you resistant to it because you prefer to stay in your comfort zone?  Think about how your answer will affect your capacity as a supervisor to advocate change and innovation in your organization.

While internal changes are pretty self-explanatory, external changes include the economy, marketplace, or advancements in technology. Any change, whether internal or external, affects supervisors and their jobs in a variety of different ways. Being able to identify the necessary changes that need to be made and adapt quickly to these changes will put the supervisor and organization ahead of all the others. To fully understand why change occurs in an organization, you must first understand what forces change in an organization and how to manage resistance to change. You must also obtain a firm grasp on the creativity and innovation in an organization and how to provide an environment that fosters innovative thinking.

This resource provides instruction for users to:

  • Describe traditional and contemporary views of change in employer-employee relationships
  • Explain how a supervisor's attitude toward change management impacts employees and the organization
  • Explain how a supervisor's attitude toward change management impacts employees and the organization
• Attention to Detail

BARGAINING A WIN-WIN SITUATION FOR ALL

• Bargaining A Win-Win Situation For All

Marketing

INTRODUCTION TO MARKETING

Marketing has become so pervasive that it is even a part of the architecture of modern cities throughout the world. Signage comes in all shapes, sizes, and colors, competing for our attention. Studies show that by the time you reach the typical retirement age, you will most likely have seen at least 2 million advertisements of some kind. Traditionally, advertising has been a fundamental source of revenue for radio, television, newspapers, and magazines. Today, advertisements are commonplace on the Internet and on any physical object with a surface that can be covered, such as the side of a city bus or a race car driver's fire-safety suit.

Amazingly, each ad has the same basic goal: to get consumers to purchase a specific product or service and to keep those customers coming back. Marketing is about making exchanges and creating relationships through the implementation of the four Ps: product, price, promotion, and place. These tools work in tandem to create powerful marketing strategies, which, in turn, meet customers' needs and wants. Marketing also works to create value for both customers and companies and to create a balance that keeps everyone happy.

This resource provides instruction for users to:

  • Describe the "4 Ps" of marketing
  • Define marketing
  • Describe a customer's perspective of value
  • Describe a company's perspective of value
  • Generalize the types of decisions marketers make
  • Analyze the role marketing plays in an organization
  • Analyze how ethical considerations impact marketing strategies
• Introduction To Marketing

STRATEGIC PLANNING

Any complex process needs a plan. A plan is like a map—it shows you where you want to go and helps you make sure you are heading in the right direction. In terms of marketing planning, you have to look to the future and know where you want your company to be. Often, this requires everything from composing a mission statement to creating a strong business portfolio.

High- and midlevel managers usually create the marketing plan from three levels of organization: strategic, functional, and operational. In doing so, managers may have to step back and look at the proverbial big picture of the company while also reviewing the basic four Ps of marketing: product, price, promotion, and place. When it comes time to put a marketing plan into action, it is essential that companies take time to determine who will do what. This is commonly done through an individualized organizational chart that outlines which department—and who within that department—is responsible for each job. Getting this figured out ahead of time is integral to a successful marketing plan.

This resource provides instruction for users to:

  • Analyze the roles and impact of strategic, functional, and operational marketing planning within an organization
  • Outline the planning process of creating a marketing plan
  • Explain the important considerations in implementing a marketing plan
• Strategic Planning

ANALYZING THE BUSINESS ENVIRONMENT

To truly meet customers' needs, marketing departments must carefully look at their customers and the business environment around them. When looking at your business, consider how your plans and decisions about your product or service might be influenced by the age, education, income, and economic status of your customers. When making key decisions, marketers need to understand the environment outside the company, or the macroenvironment.  

Successful marketers take the time to analyze different aspects of the business environment. They know that what they learn will help them to make better decisions. It will also help them see the “big picture” about what to do—and not do—next. A proper analysis of the business should also include studying how to achieve that delicate balance between keeping customers satisfied and earning a profit. Cutting the price of a product or service may please customers, but if done too much or too often, the company's value will decrease. Learning how to keep customers and still make money is rarely easy, but every company strives for that goal.

This resource provides instruction for users to:

  • Interpret how the economic, political, and legal environments could affect a marketing strategy
  • Interpret the marketing implications of the technological environment
  • Analyze how the internal operating environment of one's own company may affect marketing decisions
  • Describe how and why the competitive environment drives marketing decisions
  • Explain how an understanding of a target customer base affects marketing decisions
  • Explain how supplier considerations affect marketing decisions
• Analyzing The Business Environment

MARKET RESEARCH AND INTELLIGENCE

Marketers make many decisions in their role within a business, and to do so effectively, they need to have the most current and accurate data possible. They analyze demographic data and use the information to create detailed reports. In turn, they use these reports to identify which products and services to focus on, what advertising steps to take, and what decisions should be made—or completely rejected.

To make marketing decisions, people need information, which is abundant in the modern digital world. The process of data mining makes it possible to focus on the most relevant details and ignore the ones that aren't needed. The process begins with defining the problem or issue, followed by developing the basic design, defining the sample, collecting, reading, and analyzing the data, and turning the findings into a detailed and efficient report.

This resource provides instruction for users to:

  • Define market research and intelligence
  • Identify different ways in which market research findings are used
  • Describe market research methodology
  • Categorize primary and secondary data
  • Contrast qualitative and quantitative data
  • Describe how marketing research data is analyzed and interpreted
• Market Research and Intelligence

MARKET ANALYSIS AND STRATEGY

Analyzing the market is a complex process that involves a number of strategies. Demographics play a huge role in effective market analysis. In addition, research data allow marketers to segment the population into groups that share preferences, interests, or hobbies.

When companies consider different marketing strategies, they have to look at their target audience and the type of campaign.  Marketers must carefully consider their market and what the competition is offering. They must determine how they want their product to compare to the competition. Will it be the same but at a lower cost? Will it cost more but have more features? You will need to consider these issues when looking at positioning and differentiation strategies.

This resource provides instruction for users to:

  • Explain the concept of market segmentation
  • Differentiate various targeting strategies
  • Define targeting Illustrate examples of market positioning and differentiation
  • Define positioning and differentiation
  • Define customer relationship management (CRM)
  • Analyze different approaches to Customer Relationship Management (CRM)
• Market Analysis and Strategy

CONSUMER BEHAVIOR

Marketers spend an incredible amount of time, thought, and money taking the time to understand consumer behavior so they can make effective and informed decisions. When people decide to buy something, they tend to follow a specific process. They move from recognizing that they need something to researching the product or service. Once they have the information, they weigh their choices, make a decision, and make the purchase. Finally, they look back at their choice and decide if it was the right one.

How fast the public adopts any new service or product varies hugely. Some products hit the market, and everyone wants one; other products move along more slowly. The process of adopting a product moves through six stages: awareness, interest, evaluation, trial, adoption, and confirmation. During the last part of this process, buyers tend to stop and evaluate their purchasing decisions and decide if they made the right one.

This resource provides instruction for users to:

  • Outline the consumer decision process
  • Explain each step of the consumer decision process
  • Describe how consumers' social and cultural behaviors affect marketing
  • Describe how customers' personal characteristics affect marketing
  • Identify product adoption rates and processes
• Consumer Behavior

B2B MARKETING

When we think of the term marketing, we usually think of marketers trying to find ways to attract and interest consumers. However, this resource focuses on a different type of marketing: business-to-business (B2B) marketing. While marketing to consumers and businesses have some similarities, they also differ in many areas, including quantity, stakeholders, quantity of customers, and geographic concentrations.

A competent marketing department makes accurate forecasts of its goods and services. This allows the production department to know whether to back off or step up. For this reason, marketers must have a strong knowledge of the different types of demand (derived, inelastic, fluctuating, and joint) and how each one can potentially affect B2B marketing. A discussion of B2B marketing would not be complete without a look at buying centers. These are made up all the people involved in deciding to make a purchase from a company. Often these groups include initiators, users, gatekeepers, influencers, deciders, and of resource, buyers.

This resource provides instruction for users to:

  • Describe the B2B market structure
  • Distinguish derived, inelastic, fluctuating, and joint demand Identify B2B straight rebuy, modified rebuy, and new buy situations
  • Describe the importance of buying centers in B2B transactions
  • Explain the purchaser decision process in B2B marketing
  • Compare how business purchasing decisions are made with consumer purchasing decisions
• B2B Marketing

PRODUCT DEVELOPMENT & MANAGEMENT

The product-development process takes a product from the initial idea all the way to its launch to the public. Products have a life cycle, with each phase having its unique qualities and changes. Products move through the introductory phase to growth, profit, and sales. During the maturity phase, sales peak, and during decline, they drop along with profits. How much time each product spends in each phase depends entirely on its success level.

Product packaging and labeling is another element of this resource. What do you look for when you're scanning the shelves for toothpaste? What type of coloring, lettering, and other packaging gets your attention? These are important marketing factors. Some products—such as medication, cigarettes, and food—also require specific government labeling.

This resource provides instruction for users to:

  • Identify the steps in new product development
  • Define the stages of the product life cycle
  • Explain product packaging and labeling considerations
  • Compare organizational options for product development and management
• Product Development & Management

SERVICES MARKETING

Services are intangible, perishable, variable, and inseparable. The tangibility of any service varies greatly and creates what is known in marketing as the services continuum. Some services, such as a massage, leave you with nothing tangible. Others, such as an oil change, leave you with an article or substance. Services are also largely impacted by various factors, such as the comfort of the setting, the level of customer service, the ease of accessing the business, and how long you had to wait for the service.

In today's intensely competitive marketplace, many businesses have realized that core services alone are not enough to attract and maintain customers. Instead, many companies take their services a step further and augment them with extras, ranging from complimentary coffee to free computer use. In some businesses, paying an extra price can result in enhanced services, such as a first-class airline ticket compared to one from business class. The Internet plays a key role in marketing services available today.  Understanding how consumers perceive a company is essential in marketing.

This resource provides instruction for users to:

  • Compare differences in service marketing and product marketing
  • Define key characteristics of services in the market
  • Identify types of services
  • Explain the meaning of "services continuum"
  • Contrast core and augmented services
  • Produce examples of services from both consumer and B2B perspectives
  • Articulate how the buyer characterizes services in terms of quality
  • Explain the process of quality problem identification
• Services Marketing

INTEGRATED MARKETING COMMUNICATION

Marketing a brand, product, or service can be done in a variety of ways. You might hear an ad on the radio in the morning and then see an ad for the same product in your local newspaper that evening. You might watch a TV commercial and then see the same product on a billboard as you are driving to work.  When marketers match the right tools with the target group, it helps maximize the return on their marketing budgets. Marketers use integrated marketing communications (IMC) to make sure that their target market learns about their products and services.

Putting an IMC plan together using the best promotional tools results in a marketing communications mix, when the correct channels come together to reach customers and convey a company's value. Creating an effective IMC plan is essential when promoting a company's products or services. The process of creating the plan focuses on five complex steps: identifying the target market, establishing clear objectives about what you want to achieve, determining the budget, creating the strategy, and evaluating the program to see if it achieved everything you had hoped it would. Hopefully, the IMC plan can develop brand loyalty for consumers in the process.

This resource provides instruction for users to:

  • Define integrated marketing communication (IMC)
  • Show how advertising can be used as part of a promotion
  • Show how personal selling, sales promotions, and direct marketing can be used as part of a promotion
  • Show how PR can be used as part of a promotion
  • Explain the use of viral and guerilla marketing
  • Explain the importance of each phase in the development of an IMC plan
• Integrated Marketing Communication

PRICING

Some consumers believe that companies base their prices on what they think they can get away with charging. However, prices are a result of a close examination of demand, customer value, and cost, plus various competition-based pricing strategies. Deciding what price to put on any product or service is often determined in a six-step process. Putting too high a price on an item can scare away customers, while pricing it too low can wipe out any possible profits.

Most product lines feature a variety of prices to appeal to a wide range of customers. Prices are also heavily influenced by economic factors, such as recession, inflation, capacity, market shares, and demand. Each of these situations requires price adjustments. Other factors that influence pricing include legalities, ethics, and psychology. The Fair Trade Commission exists, in part, to make sure that pricing decisions are honest and legal. Federal and state governments also play a role in regulating prices.

This resource provides instruction for users to:

  • Explain demand, customer value, cost, and competition-based pricing
  • Outline the pricing process
  • Describe considerations for each step of the pricing process
  • Analyze considerations when developing a pricing strategy for a product line
  • Explain price adjustment considerations
  • Compare psychological, ethical, and legal considerations in pricing strategies
• Pricing

MARKETING CHANNELS AND SUPPLY CHAINS

When you walk into a store and see the shelves lined with products, you may not have given a lot of thought as to how they got there. A complex process of marketing and distribution channels and intermediaries are responsible for getting products from the manufacturer to the consumer. Knowing which channel to choose is a big responsibility because it can impact many aspects of the business.

Selecting the best distribution channel—or channels—is only the first step for marketers. Once channels are selected, they need be organized to minimize horizontal, interchannel, or vertical conflicts. Nurturing channel members typically involves training, supervising, and encouraging them, plus offering incentives, cutting costs, and improving productivity. Members need to be evaluated based on a standard set of performance factors ranging from sales and durability to cost benefits and inventory management. If a channel strategy is in place, it has to be monitored or it is certain to fail—and possibly bring the business down with it.

This resource provides instruction for users to:

  • Identify different types of distribution channels
  • Describe the concept of a supply chain
  • Identify likely members of a given distribution channel
  • Show how distribution channels can be organized
  • Show how distribution channels can be managed
  • Evaluate the effectiveness of a distribution channel strategy
• Marketing Channels and Supply Chains

Organizational Behavior

INTRODUCTION TO ORGANIZATIONAL BEHAVIOR

Organizational behavior is the study of how people interact in the workplace and how this interaction affects the organization. Managers are a key component within an organization and greatly impact internal interactions. They are the people who most directly influence the behavior of employees—whether through motivation, rewards, mentoring, or discipline.

Managers need to be good at planning, organizing, leading, and controlling, but they also need good interpersonal skills. How managers get along with their employees can have a big impact on how those employees do their jobs. If management provides a supportive work environment and employees feel valued and respected, they will be more content and more productive.

This resource provides instruction for users to:

  • Define organizational behavior and relate it to management
  • Discuss the field of organizational behavior and contributing disciplines
  • Define organizational behavior and relate it to management
  • Identify challenges of organizational behavior
• Introduction To Organizational Behavior

UNDERSTANDING BEHAVIOR OF SELF AND OTHERS

• Understanding Behavior of Self and Others

DECISION MAKING

A number of other factors might be part of the decision-making process, such as company policy, previous decisions that might serve as a precedent, time frame, and how many people are involved. Although expecting any decision to be accepted unanimously is unrealistic, everyone's voice should be heard throughout the decision-making process. If people feel their views have been taken seriously, they are more willing to stand behind a decision, even if they still harbor doubts.

This resource provides instruction for users to:

  • Identify common biases and errors in decision making and how these can influence management issues as related to organizational behavior
  • Discuss factors that influence perception and how these factors affect management decisions
  • Compare and contrast theories of perception and decision-making processes
  • Discuss factors that influence perception and how these factors affect management decisions
  • Explain how theories of perception and decision-making processes affect management functions related to organizational behavior
  • Evaluate an ethical dilemma as related to organizational behavior
• Decision Making

MOTIVATION

Determining what motivates employees is a critical element of running a business. Some people are motivated by a need to achieve, while others want recognition, and still others want to be popular. Motivation will determine how hard people work and how committed they are to achieving goals. The more motivated the employees, the more productive they are, and the better it is for the company. Some motivation theories are more complex than others, but they all have the same basic message: to achieve a particular result, you need to motivate employees to take the necessary steps to get there.

Giving employees a greater sense of belonging is a good way to motivate them. This could be in the form of increased job responsibilities, a greater say in aspects of their jobs, compensation-based rewards (for example, bonuses, stock options, and traditional pay raises), and benefits packages. In addition, companies can offer their employees motivation in the form of greater job flexibility.  

This resource provides instruction for users to:

  • Explain the concept of motivation by change
  • Analyze theories of motivation
  • Identify methods to involve and reward employees
  • Assess employee motivation and job satisfaction by using the job characteristics model
  • Evaluate an ethical dilemma as related to organizational behavior
• Motivation

EMOTIONS AND MOODS

• Emotions and Moods

GROUP BEHAVIOR AND TEAMS

• Group Behavior and Teams

LEADERSHIP AND POWER

At the heart of a successful organization is an effective leader. Leadership is a quality that most people claim to know when they see it. It is unclear whether leaders are “born,” or if people can be trained to lead. Some theorists believe that leaders possess specific traits that set them apart from others, such as their open personality and their ability to empathize with others. Other theorists believe that the skills that make a good leader are not quite so innate and that many of the skills a good leader needs can be taught. The most effective leaders make a point of listening to those they lead, learning what their employees want, and setting a good example for others to follow. Trust is another critical element for leadership. The leader needs to trust and be trusted.

Leadership and power are different. Power is based on dependency. Although some people use power beneficially, others use power plays to further their own goals or to coerce others into following them. One manifestation of power plays is office politics. Seasoned players can navigate their way around a political climate, but newcomers to the political game can wind up losing valuable time and influence in such an environment.

This resource provides instruction for users to:

  • Explain theories and approaches to leadership
  • Identify challenges of leadership and the effect that these challenges can have on organizational communication
  • Discuss the importance of trust as related to leadership
  • Compare and contrast the difference between power and leadership
  • Evaluate an ethical dilemma as related to organizational behavior
  • Analyze the impact of organizational politics
• Leadership and Power

CONFLICT AND NEGOTIATION

Conflict is what happens when two or more people disagree. For conflict to exist, however, the parties have to recognize their disagreement as conflict. The traditional management viewpoint is that conflict should be avoided whenever possible. Others believe that conflict is inevitable and needs to be addressed. Still others are concerned that a conflict-free environment keeps employees from challenging themselves by looking for ways to change the status quo. They see conflict as a healthy way to stir people to action and keep them from becoming complacent.

Disagreement isn't the only reason for conflict. Sometimes it comes from poor communication, and sometimes the problem is too many viewpoints to settle quickly on one. At this point, sometimes the conflict can be resolved with relative ease. Other times the issue is too complicated and the parties may be too unwilling to compromise. Before the damage from conflict becomes nearly irreparable, negotiation is a wise step.

Negotiation involves a neutral party stepping in, weighing the facts on all sides, and working out a compromise that everyone finds acceptable. Sometimes the neutral party comes from within the company. Other times the tension may be so great that someone from outside may be called in to arbitrate. Having a third party come in helps ensure that any decisions will be objective and fair, and it makes it easier for people to compromise without feeling embarrassed.

This resource provides instruction for users to:

  • Examine theories related to conflict
  • Describe the conflict process
  • Discuss how effective negotiating can occur
  • Identify challenges of negotiating
• Conflict and Negotiation

ORGANIZATIONAL STRUCTURE

Even the smallest company needs to have a structure in place to determine what work gets done, who does it, and what tools are needed to complete it. In a typical company, the structure might be made up of individuals, departments, a management structure, and an assortment of rules and regulations specific to the company's needs. Smaller companies—even one-person operations—will have a simple but clearly defined structure, while larger companies will have a more complex system.

Both the size and the type of company will help determine the organizational structure. A company that has to adhere to strict guidelines to satisfy its customer base might have a highly centralized structure with strong departments (think of bureaucracy). A company that thrives on innovation might have a much more open structure, with less emphasis on departments and a relaxed chain of command. Companies look to attract and retain employees who will fit within their structure, whatever that structure may be.  

This resource provides instruction for users to:

  • Discuss the elements that managers must consider when designing an organization's structure
  • Analyze how an organization's design may affect relationships with external companies
  • Identify types of organizational and structural designs
• Organizational Structure

ORGANIZATIONAL CULTURE

Organizational culture is made up of the company's core values, or the values that the public would most readily associate with the company. Below the core cultural values are a series of subcultures, or the values that each department within the company develops in addition to the core values. These sets of values mesh with one another and serve as a guide for employees.

The more employees embrace the company's cultural values, the stronger the culture will be. Managers can help this along by seeking out employees whose own values mesh with those of the company and by serving as role models for the employees as people who adhere to those values. The company's values form the basis for its norms, or standards, which run the gamut from dress codes to tolerance for risk. Ethical standards are also part of a company's values. Ethics include being fair in dealing with customers and other businesses, being competitive without being aggressive, and not justifying unethical behavior by saying that the end justifies the means.  

This resource provides instruction for users to:

  • Discuss methods for creating and sustaining a positive organizational culture
  • Explain the impact that organizational culture can have on behavior
  • Identify elements of a strong versus weak organizational culture
• Organizational Culture

FUNCTIONS OF HUMAN RESOURCES

The human resources function within companies serves several purposes. The first is employee selection: human resource professionals begin with a pool of applicants for a job opening and gradually narrow down that pool to find the most qualified candidates. When employees are hired, the human resources department is in charge of ensuring that their training is ongoing and appropriate. Training can be done formally or informally, in-house or offsite.  

To determine how well employees are performing, human resources professionals make sure each employee receives a performance evaluation. Evaluations measure how well employees are doing their jobs—their strengths and weaknesses, areas for improvement, and suggestions for achieving those improvements. Employees' immediate supervisors usually carry out performance evaluations, although some involve direct reports, colleagues, and even customers.

This resource provides instruction for users to:

  • Examine methods used in an organizational selection process
  • Identify methods to formally train employees with various learning styles
  • Analyze methods for improving performance evaluations
  • Discuss how diversity can be effectively managed
• Functions of Human Resources

CHANGE AND STRESS MANAGEMENT

• Change and Stress Management

Financial Accounting

FINANCIAL OPERATIONS OF CORPORATIONS

Corporations often start as small businesses and then grow into bigger businesses. For example, in 1978 college dropout John Mackey and his partner, Renee Lawson Hardy, began a small natural foods store in Austin, Texas. Today, Mackey is the CEO of Whole Foods Market, Inc., the latest incarnation of his small health food store. Corporations are business entities owned by stockholders and established under the specific state of residence. Incorporation occurs under the specific state's laws and regulations. However, states all follow basic procedures related to corporations, including granting a charter, or articles of incorporation. The charter authorizes the corporation to issue a specific number of stocks, among other things. A corporation has many of the same rights as a person. That is, a corporation can buy and sell property, can enter into contracts, and can sue or be sued.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Identify differences of accounting for financial operations of corporations between IFRS and GAAP
  • Describe how return on assets measures a company's success
  • Define terms related to business accounting
  • Show how to record the issuance of stock
  • Analyze a financial statement using standard profitability ratios
  • Explain how corporations pay dividends to stockholders
  • Explain how a corporation accounts for income tax
  • Define terms related to business accounting
  • Describe how stockholders' equity is recorded on the balance sheet
  • Prepare the stockholders' equity section of a corporation balance sheet
  • Illustrate how to account for income tax
• Financial Operations of Corporations

EARNINGS AND STOCKS

Destiny's Dolls is a toy manufacturer in Memphis, Tennessee. It issues quarterly cash dividends to stockholders, as many corporations do. However, at times Destiny's Dolls also issues dividends that are stocks—no cash involved! Barry Allen, Destiny's Doll's CEO, likes to rely on stock dividends when money is tight. This way, he can still offer dividends, which help attract and keep investors, to shareholders while holding onto the cash he needs. Understanding and accounting for the differences between cash dividends and stock dividends is important when it comes to accounting for earnings and stocks. It is also important to understand the difference between stock dividends and stock splits. Finally, being proficient at analyzing an income statement will help you whether you are a company insider, professional accountant, or potential investor.

This resource provides instruction for users to:

  • Explain the effects of stock dividends and stock splits on total stockholders' equity
  • Define terms related to business accounting
  • Show how to account for stock dividends
  • Describe how IFRS and GAAP differ in accounting for earnings and stocks with dividend reporting and preferred stock
  • Define terms related to business accounting
  • Report restrictions on retained earnings
  • Identify types of information found on a corporate income statement
  • Define terms related to business accounting
  • Describe how stockholders' equity is reported
  • Prepare the stockholders' equity section of the balance sheet
  • Analyze earnings on a corporate income statement
  • Define terms related to business accounting
• Earnings and Stocks

LONG-TERM LIABILITIES

You are the chief executive officer of the publicly traded soft-drink company Sweet Pea Drinks. In the past, you have issued stock to raise capital. However, you now want to expand your business into energy drinks. Therefore, for the first time, your company is issuing bonds, another potential source of capital. Basically, investors who buy bonds from your company are loaning you money.

The bond is your IOU, or your promise that you will repay these investors what you owe them, plus periodic interest. Bonds are considered long-term liabilities. Bonds have a terminology all their own, including principal amount, maturity date, and stated interest rate. These terms help bond issuers and investors communicate clearly on loan transactions. Bond aficionados should also have a good understanding of the concept of the time value of money. In the most basic sense, the time value of money says that a dollar today is worth more than that same dollar tomorrow. Think about it: you can invest that dollar today, perhaps at 4%. That dollar plus interest earned surpasses a plain old dollar any day.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Describe how bonds are issued and reported
  • Define terms related to business accounting
  • Recognize issues that companies face when bonds payable are issued
  • Explain the effective-interest method of amortization
  • Define terms related to business accounting
  • Recognize issues that companies face when bonds payable are issued
  • Explain how to account for retirement and conversion of bonds payable
  • Measure interest expense using the effective-interest method
  • Define terms related to business accounting
  • Outline the advantages and disadvantages of borrowing
  • List how accounting for long-term liabilities differ between IFRS and GAAP relating to fair value accounting on leases and pensions
• Long-Term Liabilities

INVESTMENTS AND CASH FLOW

Cash flow is the lifeblood of a business. Managing cash flow is essential to the successful operation of any business. Well-run businesses have adequate cash in the following accounts: operating accounts, or money used for day-to-day activities; investing accounts, or money used for long-term assets; and financing accounts, or cash used to raise more capital. Potential investors are interested in healthy cash flow. Creditors, too, are interested. They want to know if companies can repay their loans. In fact, many readers of statements of cash flows use them to analyze whether a business has sufficient cash to pay its bills and pay dividends by asking the following essential questions: How do you know if a company is doing a good job managing its cash? As a creditor, what sources of cash would you be considering when determining whether a business has the ability to pay its bills? As an investor, what concerns would you have about a business's cash position? If a business is profitable, does that mean it has sufficient cash in the bank?

This resource provides instruction for users to:

  • Distinguish among operating, investing, and financing cash flows
  • Define terms related to business accounting
  • Identify the purposes of the statement of cash flows
  • Define terms related to business accounting
  • Describe differences of accounting for investments and cash flows under IFRS and GAAP within the statement of cash flows from interest and dividend revenue
  • Identify the purposes of the statement of cash flows
  • Define terms related to business accounting
  • Prepare a statement of cash flows using the indirect and the direct method
  • Identify the purposes of the statement of cash flows
  • Define terms related to business accounting
  • Prepare a statement of cash flows using the indirect and the direct method
• Investments and Cash Flow

FINANCIAL STATEMENT ANALYSIS

Your New Year's resolution was to invest in the stock market. However, you feel torn between a hot-tech stock, a blue-chip stock, and a quirky retail stock. Your roommate Spencer has lots of opinions on this. Although Spencer may be great at predicting sports outcomes, your best bet for choosing good investments may be to read the companies' financial statements. Financial statements contain nuggets of important information for potential investors. For example, you can determine whether a company is incurring too much debt, generating adequate sales, or operating profitably. You can analyze these statements in several ways. For example, you can do a horizontal analysis, or study the percentage changes in comparative financial statements. Or you can do a vertical analysis, which highlights the relationship of each item to its base. With this, you can see relative changes in accounts over time. Financial statements also provide you the information you need for financial ratios. Using these ratios, you can determine a lot about a company and make a good investing decision, even if the decision is simply to do more analysis.

This resource provides instruction for users to:

  • Analyze comparative financial statements using a horizontal analysis
  • Analyze financial statements using a vertical analysis
  • Use and prepare common-size financial statements
  • Recognize the steps used in computing a percentage change in comparative statements
  • Explain a vertical analysis of a financial statement
  • Define terms related to business accounting
  • Indicate how IFRS compares to GAAP in financial statement analysis and the applicability of financial ratios as a segment of vertical analysis
  • Analyze comparative financial statements using a horizontal analysis
  • Analyze financial statements using a vertical analysis
  • Use and prepare common-size financial statements
  • Discuss how ratios are used to make business decisions
  • Use ratios to perform financial statement analysis
  • Explain a vertical analysis of a financial statement
  • Define terms related to business accounting
  • Discuss how ratios are used to make business decisions
  • Use ratios to perform financial statement analysis
  • Define terms related to business accounting
• Financial Statement Analysis

MANAGEMENT ACCOUNTING

Jonathan loves chocolate-covered potato chips, especially with pineapple and anchovy pizza. He buys them once a week at Bigg's grocery store. However, last Monday at Bigg's he couldn't find his potato chips anywhere. He asked his favorite Bigg's clerk, Jeff, about the missing chips. Jeff told him that the manufacturer had discontinued the line. “It must not have been selling enough,” Jeff said. Have you ever had a favorite product suddenly disappear from the store shelf? Why does this happen? How does a company determine which new products will be sold and which products will be discontinued? Welcome to the world of management accounting.

This resource provides instruction for users to:

  • Describe the difference between financial accounting and management accounting
  • Define terms related to business accounting Identify the six elements of the value chain
  • Define terms related to business accounting
  • Prepare a financial statement where costs are calculated
  • Explain how the value chain can be used to control costs
  • Use a cost-benefit analysis to weigh the benefits of a system against the cost to develop and run a system
  • Define terms related to business accounting
  • Describe how costs are reported on a financial statement
  • Explain how cost-benefit analysis is used to make business decisions
• Management Accounting

PROCESS COSTING

Let's say you are a master chocolatier. You trained in Paris. You opened your business, Jo's Sweet Chocolate Dreams, last fall. You know how to make scrumptious candies. However, how do you separate out the cost of making your chocolate? Process costing can help you determine the cost of actually making the product, shaping the product, and packaging the product.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Explain the difference between flow of costs in process costing and job order costing
  • Identify the four-step process costing procedure
  • Illustrate how to use the process costing procedure
  • Describe weighted-average method of accounting for process costs
• Process Costing

JOB COSTING

LaBella Garden Statues Ltd. has had a profitable five-year run. One of the main reasons for this success is that CEO Mary Fairie effectively prices the products. These prices set the stage for healthy customer demand, and therefore profit. For example, when Mary sets prices for her best-selling gnome statues, she considers everything from manufacturing costs to the metal and plaster used to make the statues. She also has to consider the salaries of the men and women who make the statues, as well as her own salary. Although she is not involved directly with the actual production of the statues, she still spends time planning for them. Job order costing is one aspect of cost accounting.

This resource provides instruction for users to:

  • Identify the two product cost systems that average costs across products
  • Explain the two steps managers use to determine the costs incurred in each job
  • Define terms related to job order costing
  • Describe how to allocate manufacturing overhead to a job's costing system
  • Use a manufacturer's job order costing system to trace materials, labor, and overhead
  • Account for completion and sale of finished goods
  • Adjust manufacturing overhead using accounting computations
  • Describe noninventoriable costs in job order costing
• Job Costing

COST-VOLUME- PROFIT ANALYSIS

Louise Lots owns a pool supply store. Her company has fixed costs, such as the salaries of her four employees. These costs are considered fixed because they do not rise and fall as Louise sells more pool supplies. However, Louise also has variable costs, including transportation costs. These costs are variable because the more pool supplies Louise sells, the more she spends on transporting the supplies. Both fixed and variable costs impact profits. Louise is also interested in knowing when she is making enough to break even. Her accounting friend Stu told her about using cost-volume-profit (CVP) analysis to determine a break-even point, or the point at which Louise's revenue and expenses are equal. When Louise or Stu uses the CVP model, they classify costs as either fixed or variable.

This resource provides instruction for users to:

  • Identify two types of cost behavior
  • Define terms related to business accounting
  • Explain the components of a CVP analysis
  • Use CVP methods to perform sensitivity analysis
  • Use CVP methods to plan profits
  • Define variable costing and absorption costing
  • Analyze how variable costing and absorption costing are used by managers
• Cost-Volume- Profit Analysis

BUDGETING

Each month, you maybe create a household budget with your spouse. You include estimates for grocery bills, car repair costs, and electric bills. Perhaps maybe you're the work for a small business, where you create budgets, but usually on an annual basis. You may also use estimates to predict costs for the company. There are many types of budgets used by companies. These budgets can help managers estimate sales, cost of goods sold, and operating expenses, among other important things. When you can effectively create and implement budgets, you can make better financial decisions. In effect, you are not shooting in the dark.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Explain the elements of a sensitivity analysis
  • Discuss how managers use budgets
  • Prepare various types of budgets
  • Use sensitivity analysis on budgeting

Your behavior represents a lack of customer-focus and professionalism. With both the external customer and the internal customer (your coworker), you showed a lack of respect. Handling simple transactions with no customer focus and professionalism can be detrimental to your career. A rude response to a customer inquiry can cause the customer to leave, hurting your company as a whole. This action does not reflect kindly when you apply for a promotion or raise. If you are not a team player when interacting with coworkers, these people may never come to you for help again or offer help when you need it. Treat everyone as a customer, and treat your customers with respect. When you combine respect with the attributes of professionalism, you are more likely to succeed as a professional.

This resource provides instruction for users to:

  • Describe how having a customer focus contributes to professionalism
  • Identify external customers
  • Analyze the benefits of having an external customer focus
• Budgeting

FLEXIBLE BUDGETS AND STANDARD COSTS

Flossie Smith owns Flossie's Flexible Straws, a plastic-straw manufacturing company. Flossie uses various budgets to identify and correct problems with the manufacturing and selling of her straws. Sometimes she finds ways to lower costs and improve her product. Flossie also uses sensitivity analysis, which creates a kind of “what if” scenario. For example, Flossie may want to predict the outcome of lowering prices or using more expensive raw materials. However, when Flossie bases her budget on a sensitivity analysis, sometimes the real-life results differ. When the results differ negatively, then Flossie has to find a way to make things better. When the results compare favorably, she wants to see how to continue doing more of the same.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Explain how companies use standard costs to develop flexible budgets
  • Explain how managers use flexible budgets
  • Prepare a flexible budget for the income statement
  • Use the flexible budget to show why actual results differ from the static budget
  • Compute standard cost variances for direct materials and direct labor
  • Analyze manufacturing overhead in a standard cost system
• Flexible Budgets and Standard Costs

COST SYSTEMS AND BUSINESS DECISIONS

Stella Udesky runs an Internet beauty supplies company called Stella's Steals. She has a home office and warehouse in Tampa, Florida. In today's global economy, Stella knows she must offer quality goods and services at competitive prices. To effectively set prices, Stella must know what her products and services actually cost. What other information does Stella need to keep her company running efficiently? She must know how to best manage her inventory. If Stella has too little inventory on hand, she won't be able to fill orders. If she keeps too much in her warehouses, she could incur unnecessary and prohibitive warehousing costs. For this reason, Stella decides to try the just-in-time inventory system to keep things in balance. Other important business questions for Stella may include the following: What is it costing her to maintain quality? When should she invest in new equipment, such as a new computer system? What happens if she opens another office?

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Discuss how cost systems can become more accurate
  • Use an activity-based costing system
  • Describe the difference between traditional cost systems and just-in-time systems
  • Explain the four types of quality-related costs
  • Use activity-based management to make decisions that increase profits and meet customer needs
  • Examine how financial information is utilized to make business decisions to maximize profits
  • Identify five types of short-term special business decisions
  • Assess how payback and accounting rate of return models are used to make longer-term capital budgeting decisions
• Cost Systems and Business Decisions

Management Accounting

ACCOUNTING AND THE BUSINESS ENVIRONMENT

Accounting is the information system that measures business activities. Such activities include purchasing inventory and then selling that inventory to customers, or providing a service. Information is then processed into reports, and the results are communicated to decision makers. Decision makers are often business owners or potential investors. It is very important that accounting reports are prepared with care and according to the Generally Accepted Accounting Principles (GAAP).

This resource provides instruction for users to:

  • Define primary accounting concepts and principles
  • Use accounting terminology in a business context
  • Explain components of the accounting equation
  • Use the accounting equation to record business transactions
  • Describe the differences between IFRS and GAAP on financial statement reporting
• Accounting and The Business Environment

RECORDING BUSINESS TRANSACTIONS

• Recording Business Transactions

THE ADJUSTING PROCESS

Beverly balances her checkbook the old-fashioned way each month. She sits down at the kitchen table and goes over all the checks she wrote, and she notes the checks that have been cashed. In a sense, she has created accounting periods, or time periods reflected by financial statements.

This resource provides instruction for users to:

  • Define the revenue principle and the matching principle
  • Explain the difference between accrual and cash-basis accounting
  • Apply the revenue and matching principles to the accounting equation
  • Articulate the importance of adjusting entries as a key to accrual accounting
  • Make adjusting entries
  • Prepare an adjusted trial balance
  • Prepare the financial statements from the adjusted trial balance
• The Adjusting Process

COMPLETING THE ACCOUNTING CYCLE

The basic steps of an accounting cycle include transactions, journal entries, posting trial balances, worksheets, adjusting journal entries, financial statements, and closing the books.  Learners will realize that the accounting cycle is a very important concept in finance. Learners will also become familiar with other terms, including current assets, current liabilities, liquidity, and accounting ratios. All of these terms, in one way or another, exist in financial statements and help gauge the financial condition of a company.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Explain the accounting cycle
  • Identify the elements of an accounting worksheet
  • Identify assets and liabilities as current or long term
  • Explain how ratios are used to analyze a company's financial statements
  • Prepare an accounting worksheet Use the accounting worksheet to complete the accounting cycle
  • Describe the steps involved in the closing process
  • Close revenue, expense, and withdrawal accounts
  • Use the current ratio and the debt ratio to evaluate a company
  • Describe how the closing process differs between IFRS and GAAP
• Completing The Accounting Cycle

MERCHANDISING OPERATIONS

• Merchandising Operations

MERCHANDISE INVENTORY

• Merchandise Inventory

ACCOUNTING INFORMATION SYSTEMS

As his son likes to remind him, when Sam graduated from accounting school, he did most of his computing with a pencil and pad of paper. Today, Sam relies on his computer. Most of the information Sam works with remains the same, whether he is working manually or automatically. However, accounting information systems have made Sam's life easier. He can process transactions faster and access information easier when using computer systems. In fact, he can even produce financial records while sitting on his deck in Florida by downloading information from his clients in Ohio.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Describe the elements of an effective accounting information system
  • Compare and contrast computerized and manual accounting systems
  • Explain how spreadsheets are used in accounting
  • Identify how various journals are used in accounting
  • Use various accounting journals
• Accounting Information Systems

INTERNAL CONTROL AND CASH

Carla balances her checkbook each month. She checks to see if the checks she wrote were cashed and if the bank charged unwarranted fees. When she does this, she is practicing a form of internal control. She is making sure that her money is safe and accounted for. The U.S. government has rules that require public companies to have internal controls. These rules help protect both those inside the firm, the managers and employees, and outsiders such as investors. Internal control means protecting your assets. Even when you lock your doors at night, you are using internal controls.

This resource provides instruction for users to:

  • Define internal control
  • Explain the objectives of an effective internal control system
  • Recognize how a bank statement is used as a control device
  • Apply internal controls to cash receipts and cash payments
  • Prepare a bank reconciliation
• Internal Control and Cash

RECEIVABLES

Martin runs a tea importing company. Sometimes his customers buy the tea on credit and never pay. In terms of accounting, Martin must determine how he can resolve this issue. He must also understand the difference between notes receivable and accounts receivable, and how an investor uses receivable information to evaluate a company. How does a company account for receivables that are never paid? How is Notes Receivable different from Accounts Receivable? How can you use receivable information to evaluate a company? This resource, “Receivables,” answers these questions.

This resource provides instruction for users to:

  • Define terms used for notes receivable
  • Assess how internal control over collections can be achieved
  • Design internal controls for receivables
  • Identify accounting information used for decision making
  • Describe the allowance method and the direct write-off method used in accounting
  • Use the allowance method to account for uncollectibles by the percent—of-sales and aging—of-accounts methods
  • Use the direct write-off method to account for uncollectibles
  • Account for notes receivable
  • Report receivables on the balance sheet
  • Use the acid-test ratio and days' sales in receivables to evaluate a company
  • Note the difference between IFRS and GAAP on accounting 
• Receivables

PLANT ASSETS AND INTANGIBLES

Lyle owns five gravel pits in Austin, Texas. How does his accountant deal with these natural-resource assets when it comes to depreciation? How do you account for assets that are completely intangible, such as copyrights and patents? When you account for natural resources and intangible assets, you will use methods of determining depletion and amortization.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Explain the general rule for measuring cost
  • Describe how measuring plant asset depreciation is achieved
  • Explain how depreciation affects income taxes
  • Select the best depreciation method for tax purposes
  • Identify natural resources and intangible assets
  • Account for natural resources and intangible assets
• Plant Assets and Intangibles

CURRENT LIABILITIES AND PAYROLL

Lee, the owner of a jewelry store in Butte, Montana, sometimes assumes short-term debts. These are simply bills he must pay within one year, which are also known as current liabilities. Current liabilities range from unpaid telephone bills to an invoice from a main jewelry supplier. Current liabilities can also include the 7% sales tax added to every sale. This tax is a current liability because Lee then owes this money to the state of Montana, the originator of the tax. Notes payable can also be current liabilities. The notes are written promises to pay specified dollar amounts, usually the loan plus interest, on specific dates to specified lenders.For example, Lee bought a new gem-polishing machine on June 15. He signed a $25,000, 120-day note, at 10% interest. Of resource, current liabilities have their own accounting implications. In addition to managing his current liabilities, Lee must also manage payroll because he has three employees. Lee must consider all the accounting and tax intricacies that accompany payroll. For example, he must ensure that his company is deducting the correct amounts from his employees' paychecks. Payroll, like current liabilities, impacts the accounting process.

This resource provides instruction for users to:

  • Define terms related to business accounting
  • Define terms related to payroll accounting
  • Recognize current liabilities of a known amount
  • Compute current liabilities
  • Compute payroll amounts
  • Use a payroll system
  • Record basic payroll transactions
• Current Liabilities and Payroll

PARTNERSHIP

• Partnership

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