Business advantage 3rd year/upper-intermediate

BUSINESS ADVANTAGE 3^RD YEAR/Upper-intermediate

Unit 8 THEORY: «The principles of project management»

«A project is a sequence of tasks with a defined beginning and end restricted by time, resources and desired results»

Project management is a process of bringing together systems of working, people and techniques to complete a project within set targets of time, budget and quality. Any one successful project will have a clearly set targets, clearly defined ownership and responsibility roles, be restricted by a timeline, be supported by senior management of an organization and linked to SMART* business objectives, i.e. specific, measurable, achievable, realistic and time-bound.

In any project it is essential to undertake a cost-benefit analysis to correctly assess where available resources used in current business activities are balanced with those required to keep the project running. Projects generally fail because of bad planning, a lack of resources, poor communication, undefined goals and lack of management support.

* Paul J. Meyer describes the characteristics of S.M.A.R.T. goals in Attitude is Everything. ^[2]

Specific

The first term stresses the need for a specific goal over and against a more general one. This means the goal is clear and unambiguous; without vagaries and platitudes. To make goals specific, they must tell a team exactly what is expected, why is it important, who’s involved, where is it going to happen and which attributes are important.

A specific goal will usually answer the 5 "W" questions:

· What: What do I want to accomplish?

· Why: Specific reasons, purpose or benefits of accomplishing the goal.

· Who: Who is involved?

· Where: Identify a location.

· Which: Identify requirements and constraints.

Measurable

The second term stresses the need for concrete criteria for measuring progress toward the attainment of the goal. The thought behind this is that if a goal is not measurable, it is not possible to know whether a team is making progress toward successful completion. Measuring progress is supposed to help a team stay on track, reach its target dates, and experience the exhilaration of achievement that spurs it on to continued effort required to reach the ultimate goal.

A measurable goal will usually answer questions such as:

· How much?

· How many?

· How will I know when it is accomplished?

Attainable

The third term stresses the importance of goals that are realistic and attainable. While an attainable goal may stretch a team in order to achieve it, the goal is not extreme. That is, the goals are neither out of reach nor below standard performance, as these may be considered meaningless. When you identify goals that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. The theory states that an attainable goal may cause goal-setters to identify previously overlooked opportunities to bring themselves closer to the achievement of their goals.

An attainable goal will usually answer the question:

· How: How can the goal be accomplished?

Relevant

The fourth term stresses the importance of choosing goals that matter. A Bank Manager's goal to "Make 50 peanut butter and jelly sandwiches by 2:00pm." may be Specific, Measurable, Attainable, and Time-Bound, but lacks Relevance. Many times you will need support to accomplish a goal: resources, a champion voice, someone to knock down obstacles. Goals that are relevant to your boss, your team, your organization will receive that needed support.

Relevant goals (when met) drive the team, department, and organization forward. A goal that supports or is in alignment with other goals would be considered a relevant goal.

A relevant goal can answer yes to these questions:

· Does this seem worthwhile?

· Is this the right time?

· Does this match our other efforts/needs?

· Are you the right person?

Time-bound

The fifth term stresses the importance of grounding goals within a time frame, giving them a target date. A commitment to a deadline helps a team focus their efforts on completion of the goal on or before the due date. This part of the S.M.A.R.T. goal criteria is intended to prevent goals from being overtaken by the day-to-day crises that invariably arise in an organization. A time-bound goal is intended to establish a sense of urgency.

A time-bound goal will usually answer the question:

· When?

· What can I do 6 months from now?

· What can I do 6 weeks from now?

· What can I do today?

Unit 9 THEORY: «The 4Cs of marketing and e-marketing»

«The management process responsible for identifying, anticipating and satisfying customer requirements profitably»

Chartered Institute of Marketing

The concept of the 4Ps of product, price, place and promotion was defined by Jerome McCarthy in 1964 as the combination of all factors which a manager can utilize to satisfy market needs.

· Product – what the customer wants from the product or service and what needs it satisfies

· Price – how the price compares with competitors and how you can make a profit

· Place – how and where you sell

· Promotion – how you reach your customers (marketing and advertising your product and service)

Some marketing theorists believe that 4Ps model is able to adapt to the changing face of marketing in the digital world, while others believe it is now obsolete and a new paradigm is required to meet the new challenges.

Those who favour the existing model argue that it is sufficient to add or subtract from the existing model. Three new Ps have been added by some marketers. These include People, which encompasses the skill level of employees, Process, which means the tools to ensure you offer a consistent service, and Physical evidence, which includes premises, employees and paperwork.

People who criticize the 4Ps argue that it needs a clearer customer focus. Recent marketing theory has added the more customer-orient 4Cs. Customer wants and needs is included in Product, Cost to the customer is included in Price, Convenience for the customer is included in Place and Communication with the customer is included in Promotion.

· Convenience for the customer – point of sale (the location)

· Customer wants and needs – finding a solution to customer problems

· Cost to the customer – the total price a customer pays, including things like shipping

· Communication with the customer – two-way communication with customers about products

Unit 10 THEORY: «What is branding?»

«…the sum of the functional and emotional characteristics, both tangible and intangible, that a customer attributes to a product or service»

Paul Stobart

Brand identity is the sum of the words, images and ideas that a consumer associates with a brand. Brands are at the centre of being perceived by the customer as better or more relevant and are a company’s most strategic asset. Brands allow companies to influence the demand for a product by manipulating factors other than price. For many companies the relationship between brand awareness and sales is so acute that they follow consumers’ purchasing intentions and brand loyalty levels via surveys.

Brands also allow consumers to make informed purchase decisions and differentiate between the plethora of alternatives in any one product category such as clothing and shampoo. In the parts of the world where basic needs for everyday survival have been met, brands also give people something they can aim at and help to define identity.

Brand Loyalty

Brand loyalty is the situation when a consumer is reluctant to switch from buying and consuming the product from the brand he knows nad trusts. It consists of a consumer’s commitment or preference to repurchase the brand and can be demonstrated by repeated buying of the product or service or other positive behaviors such as word of mouth advocacy. It is more than simple repurchasing behavior, since customers may repurchase a brand also due to:

· Situational constraints

· A lack of viable alternatives

· Out of convenience

Such loyalty is then referred to as “Spurious Loyalty”.

Three reasons why brand loyalty is important:

1. Higher sales volume. Through reducing customer loss.

2. Premium pricing ability. As loyal consumers are less sensitive to price changes, generally, they are willing to pay more for their preferred brand.

3. Lower costs for advertising, marketing and distribution. Brand loyalists are willing to search for their favorite brand and less sensitive to competitive promotions.

Unit 11 THEORY: «Activity-based costing (ABC)»

«ABC offers management accurate information by delineating costs and tracing them to individual products and product lines»

Professor Robert S. Kaplan

ABC is an accounting method, developed in 1980s, which means a business can accurately measure data about the true operating costs of specific activities such as planning and distribution and associate them to the goods and services produced. It empowers a business to decide which products, services and resources increase profitability and which add to losses. Harvard Business School Professor Robert S. Kaplan is often seen as ABC’s founding father. After a slack period during the 1990s because of the difficulty of putting the theory into practice, in 2007 he and Steven Anderson published a new book to make ABC work better called Time-Driven Activity-Based Costing (TDABC), where they tried to relate the measurement of cost to time.

Traditional cost-accounting methods start with labour and materials as the two largest costs in producing goods and services, but take on account of operating costs, as these were minimal when traditional accounting methods emerged with factory line production. Overhead costs such as electricity and water have risen and product ranges have grown rapidly, but companies still relied on the traditional method and accounted for these overhead costs in an uncoordinated way.

In comparison, ABC allots factory and corporate overhead costs as well as labour and capital resources costs to business activity categories and it enables an assessment to be made of the total cost of producing each product or service.

Unit 12 THEORY: «The concepts of microfinance»

«Microfinance has become the buzzword of the decade, raising the provocative notion that even philanthropy aimed at alleviating poverty can be profitable to institutional and individual investors»

Forbes Magazine

Microfinance is the provision of financial services to low-income people – these are consumers and the self-employed who live on less than $1 a day. These people lack access to traditional banking services such as current accounts, savings accounts, credit facilities, insurance and the ability to transfer funds across borders mainly because they do not have the assets which a traditional bank requires as collateral.

In developing countries, particularly in rural areas, many activities do not involve money at all. Low-income people tend to fulfil their everyday needs by bartering things that are surplus such as agricultural products, jewellery and hand-made crafts. However, there are cases such as weddings, sickness and improving housing where some form of finance is necessary. This usually means recourse to moneylenders, who charge very high interest rates, but are extremely convenient.

Microfinance is considered a tool for socio-economic development and is not part of the charitable network. It is hoped that microfinance will help low-income people out of poverty, whereas destitute people should be the recipients of aid.

Unit 13 THEORY: «Business ethics and Corporate Social Responsibility»

«Corporate Social Responsibility (CSR) is the commitment by business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life that is both good for the business and good for development»

The World Bank

The United Nations uses the term ‘global corporate citizenship’ to describe multinational companies’ obligations to respect human rights, improve workers’ conditions and to protect the environment. CSR is about conducting business in a way that meets or goes above the expectations that any one society has of a business. CSR lays the foundation of companies’ ethics, principles and values, helps to reduce the environment impact of business activities and improves overall working conditions.

On the one hand, it is argued that this management of the environmental and social risks has a positive effect on the market value of a company in the long term, adds to operational efficiency in terms of brand recognition and value and increases shareholder support. On the other hand, some CSR professionals argue that the measurement of the work-life balance relative to the efficient provision of customer service is the correct definition of the role of CSR.

Corporate Reputation Quotient of Harris-Fomburn

The Corporate Reputation Quotient of Harris-Fomburn is a comprehensive measuring method of corporate reputation that was created specifically to capture the perceptions of any corporate stakeholder group such as consumers, investors, employees, or key influences. The instrument enables research on the drivers of a company’s reputation, and allows to compare reputations both within and across industries.

Six drivers of the Corporate Reputation Quotient

This business reputation model has the following 6 drivers of corporate reputation with subsequent 20 attributes:

Emotional Appeal	Workplace Environment
- good feeling about the company - admire and respect the company - trust the company	- is well managed - appears to be a good company to work for - appears to have good employees
Products and Services	Financial Performance
- company believes in its products and services - company offers high quality products and services - develops innovative products and services - offers products and services that are good value	- history of profitability - appears a low risk investment - strong prospects for future growth - tends to outperform its competitors
Vision and Leadership	Social Responsibility
-has excellent leadership - has a clear vision for the future - recognizes and takes advantage of market opportunities	-supports good causes - environmentally responsible - treats people well

Making random checks, these criteria taken together result in lists of most reputable and/or visible companies.

Unit 14 THEORY: «Corporate strategic planning»

«In preparing for battle, I have always found that plans are useless, but planning is indispensable»

Dwight D. Eisenhower

Corporate strategic planning is how an organization defines its future direction over a year, three to five years or even longer, and it outlines how the organization will make decisions regarding the allocation of capital and labour resources to follow this strategy. A strategic plan is usually a document that describes the steps necessary for an organization to grow and become more relevant or profitable, and it involves techniques such as SWOT or PEST (Political, Economic, Socio-cultural and Technological) analysis that affect growth and profitability.

The strategic planning process is often a matter of bridging the gap between the current economic situation and the ideal situation. Its benefits include ensuring that all members of the organization are working towards fulfilling common objectives and that a company’s resources are allocated as efficiently as possible. An excellent corporate strategy should outline where an organization is heading and give employees a sense of belonging and purpose. Moreover, a corporate strategic plan for a company operating in a slow growth economy, such as Europe, is very different from one for a company operating in an explosive growth economy such as Chine.

A criticism of corporate strategic planning is that it is not adaptable enough for situations where the economy is in a state of flux and is unpredictable or when there are abrupt and unexpected changes in the business environment. Critics comment that a corporate strategic plan always forecasts favourable conditions and only works well if the domestic or world economy is stable over the period of the plan.

Дата добавления: 2015-11-04