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Business English 1 UPLOADANO NA: www.referada.hr

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E N G L E S K I 11. Three sectors of the economy

2. Types of economies

3. PublicPrivate sectors4. Role of gov ernment

5. NationalisationPrivat isat ion6. Company struc ture

7. Management

8. Management and cultural diversi ty

9. Recruitment10. Labou r relat ions

11. Presentatio ns

12. Letter lay ou t, Parts of letter

13. Giving goo dbad news14. Request ing act ion, apolo giz ing

15. Making com plaints

16. Faxes , e-mail

17. Bus iness f inance

18. Produc t ion

19. Produc ts

20. Marketin g21. Adv ert is ing

22. Promo t ional tools

23. Market structu re and com pet i t ion

24. Acc oun t ing and f in ancia l statements

25. Takeovers, mergers, bu you ts, franchisin g


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ECONOMY

The relatioship between production, trade and the supplay of money in a countryor region.

The system by wich countrys wealths is produced and used. The carefull use of money, time, effort and natural resources.

ECONOMIZE

- To save money, time and resources.- Spend less than before.

ECONOMIST

- A person who studies and is shilled in economics.

ECONOMIC

- Counected with trade, industry and the management of sole profitable.- Adjective meaning of or relating to an economy or economics.

ECONOMICS

- the sientific study of the way in wich wealths is produced and used.

ECONOMICAL

- Using time, money end goods carefull and without waste.- Means using a minimum of resoures.- Or cheap.

INFRASTRUCTURE

- The basic systems and structures that a country needs to make economicactivity possible, for example:

transport, comunication, and power supplies,

CULTIVATED

- To prepare and use land for growing crops and plants.- To develop a particular scill or quality in yourself.

CULTIVATED AREA

-

Also infrastructered more hausestipical informatic

GROSS NATIONAL PRODUCTGNP- The total value of goods and services produced in a countrys economy,

including income from abroad in a year.

GROSS DOMESTIC PRODUCTGDP- The total value of goods and services produced in a countrys economy,

not including income from abroad.


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FACTOR OF PRODUCTIONOR INPUT- Are resources used by the firms in their production process, namely land

and the natural resources in it, labour, capital and information (in recentdefinition).

EXTERNALITIESOR SPILLOVERS- Are costs imposed on other without their receving compensation, or

benefits received by others without their paying the proper costs.- Something that is not directly connested to an industrial prosess or

economic activity but has an effect on it.

MICROECONOMICS

- Concerns the economic factors affecting individual consumers andcompanies.

- Is the study of a part of the economy such as the operations of onecompany or person.

MACROECONOMICS

- Is the study and analysis of the economy as a whole.- Is the study of the economy of a whole area, for example a whole country

or the whole of a particular industry.

EQUILIBRIUM

- Is a state of balance, for example, when supply meets demand.

ECONOMETRICS

- Is the apllications of mathematical and statistical models to economictheories and problems.

AGGREGATE DEMAND

- Is the total amount spent in a country by consumers, companies and thegovernment.

ENDOGENOUS

- Means coming from or controlled from within; e.g. variabled that are totallyunder the control of a company and government.

EXOGENOUS- Means coming from or controlled from without; uncontrollable variables.

FISCAL

- Adjective meaning related to public finances connected with governmenttaxes, debts and spending.

INFLATION

- A rise in general level of prices and an increase in the money supply.

SCARCITY

- A sortage of something; insufficient supply meet demand.


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CAPITAL

- Money or propertly used to produce welth.- The accumulated stock of goods used for the production of furthes goods.

COST OF L IVING- A measure of the amount of money that has to be paid for essentials such

as food, accommodation, heating, clothing.

STANDARD OF LIVING

- A measure of the amount of disposable income that people have to spendon both necessities and luxuries.

- Amount of wealth or comfort that a person, group or country has.

BALANCE OF PAYMENTS

- The difference between what a country pays for its imports and recives for

its exports.

PROTECTIONISM

- The practice of restricting imports in order to increase the sales ofdomestic products.

FLUCTUATE

- To change constantly, to show irregular variation.

SUPPLY

- An amount of something that is available to be sold, bought, used etc.

FREE ENTERPRISE (com pany or bus iness)

- When people can own capital and organize their businesses in any waythey like without being prevented by the government.

INPUTS

- Ideas, advice, effort or money that you put into something to help itsucceed.

MARKET

-

The activity of buying and selling goods or services or the value of thegoods or services sold.

MONETARISM

- The ides that an economy can be controlled by its central bank influencingthe money supply.

For example, the central bank can influence the amount of bank leading byincreasing or lowering interest rates.


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THE THREE SECTORS OF THE ECONOMY

EXTRACTizvui- to remove raw materials, such as gold or oil, from a place for example the sea

or the ground, so they can be used in an industrial manufacturing process.

- to separate a substance or chemical from raw materials.

THE PRIMARY SECTORincludes the agr icu l tu re, and the extraction of raw materials from the earth.

- FARMING- FISHING- MINING

THE SECONDARY SECTORincludes the manufacturing industry and construction, in which raw materials areturned into finished products;

- MANUFACTURING- CONSTRUCTION

THE TERTIARY SECTORincludes the commercia l servicesthat help industry produce and distribute goods tothe final consumers such as:1. COMMERCE (pro met) - the buying and selling of goods and services2. TRADE (trgov ina)the activity of buying, selling or exchanging goods within acountry or between countries.

- HOMEo retailo wholesale

- FOREIGNo importo export

3. SERVICE TO TRADE

- BANKING- FINANCE- INSURANCE- TRANSPORT-

COMMUNICATIONo advertisingo telecommunicationso post

4. WELL AS ACTIVITIES such as:( takoer I aktivnosti kao to su)

- EDUCATION- HELTH CARE- LEISURE- TURISAM


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PRIMARI PRODUCTIONS SECONDARYPRODUCTIONS

TERTIARY INDUSTRIES

digg ing i ron ore

vaenje eljezne rudeweld ing meta l

varenje metalaadvertis ing prod ucts

proizvodi ograavanja

min ing co a l

rudnici ugljena

mil l ing metal

usitnjavanje metala

calculat ing prices

odreivanje cijenapump ing o i l

naftne crpkepress ing meta l

preanje metaladis t r ibu t ing added va lue

distribucija dodatne koristi

cutt ing metal

obrada metalamarket ing prod ucts

proizvodi marketinga

smel t ing i ron

talionice eljezat ransporta t ion

transport

laying cables

izraivanje uadimaintenance

odravanje, servis

assembl ing

spajanje

packag ing products

pakiranje proizvoda

bui ld ing

graenje

DEFINITIONS:1. to convert itselfto change from one thing to another2. to serve needsto satisfy peoples desires or requirements

3. labour inputmanual work4. to stumble onto discover something by accident5. to be dubiousto be uncertain, disbelieving


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ECONOMIC SISTEMS 1

All economies have to answ er tree basic quest ion s (fund amental problems ):

WHATshould be produced;for instance, what quantities of goods or services should be produces?

HOWshould production be organised?for instance, should machinery be used, how many workers should be

employed?

FOR WHOMshould production take place?for instance, should everybody be entitled to an identical share of

production or should some receive more than others?

Fore dif ferent econom ic systems are:

1. TRADITIONAL OR SUBSISTENCE ECONOMIES:- Is one where there is little specialisation and little trade.- e.i. economy where specialisation and trade are limited, and where is a great

degree of self-sufficiency.- It is called a subsistence economy because it is very difficult without a great

deal of specialisation and trade to provide the basic necessities for living.- It is a tradicional economy because it is the type of economy that has existed

all ower the world since man began being economically active.

2. FREE - MARKET ECONOMIES:Or free-enterprise economy

Laisses feaire systems andUnplanned economis

- Is one where decisions are made through the market mechanism.- The forces of demand and supply without any government interference

determine how resources are allocated.- e.i. An economy where resources are allocated through the marker

mechanism.- How production should be organised is equally defermined by what is most

profitable.- Production is allocated to those who can afford to pay.

3. COMMAND OR PLANNED ECONOMIES:- Is one where all economic decisions are made by the government.- The government decides what to produced, how it is to be prodiced and how it

is to be allocated to consumers.- e.i. An economy where resources are allocated by the state through a system

of planning.- By state planing, goods and services can be produced to satisfy the needs of

all the citizens of a country, not just those who have the money to pay forgoods.


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4. MIXED ECONOMIES:- Is one where some goods and services are produced in the free-market sector

of the economy, but others are produced by the state.- e.i. an economy where some resources are allocated via the market

mechanism and some via the state.

ECONOMIC SYSTEMS 2

FREEMARKET VERSUS COMMAND AND MIXED ECONOMIES:There are no pure free-market economies nor pure command economies in the wordtoday.

- The most importand free-market economy today is USA. In USA 75% of totaloutput is produced by the private sector and other 25% is produced by thegovernment.

- e.i. an economy where 75% of the goods are provided by the private sectorwoud be colled a free market economy.

- The most planned economies of the world are for example USSR or Poland. Inthere countrys 75% of the goods and services are provided by the state.

- In a mixed economy, such as UK or France or Norway, the balance betweenstate provision and free-market procision is more or less equal.

PUBLIC GOODS sach as defence or MERIT GOODS sach as education aregoods whose resources are allocated via a taxes and governmentspendingprogramme.

EFFICINECYthe way of production when we are doing something well withoutwasting time, money and energy.- Aspects of efficiency are:

1. Distr ibut ion of resourc es:

for example in medicin in USA if you have a money, you can get freatment.In UK, treatment is given on the basic of need.

2. Choice:

In USA, consumers have the freedom to choice unther the UK NationalHealth Services there is far less choice.

Other aspect are:3. Cost

4. Quality

5. Quant i ty of goo ds

6. Degree of which an economy is stable

7. Rate at which the economy grow s

8. The degree to whic h the long -term interests of the econ om y are taken

into consid erat ion .


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PUBLIC SECTOR ENTERPRISES

- The state output are produced or turn out by:o the public sector e.i. the state,o the government departments sach as:

Department of Health and Social Security for health care, Education Departments for education ect.

o businesses owned by government Pablic corporation or Nationalised industry and Public limited companies

o and businesses owned by local authority Municipal Enterprises

- The public sector produces a significant proportion of total output.

1. PUBL IC CORPORATIONS OR NATIONALISED INDUSTRY

- The most important type of business in the public sector who include for

example in UK:o The Central Electricity Generating Board,o National Coal Board,o Post Office,o British Steel Corporation ando British Rail

- Pablic corporation is established by an Act of Parliament.- The only shareholder in the corporation is the government.- It is run by a Board of Directors. Targets given by the government have to be

achieved by this Board.- The person direstly responsible for the public corporation in government is the

relevant government minister.- The activities of pablic corporations can act a three bodies as watchdogs:

1. Nationalised Industry Consumer Concil,2. The Select Committes on Nationalised Industries and3. The Monopolies and Mergers Commission.

- Finance:1. from retained profit,2. borrowing from banks,3. government loans,4. new share capital by government.

2. PUBLIC L IMITED COMPANIES

- The government also ownes shares and as such conform to the legalrequirements of joint-stock companies.

3. MUNICIPAL ENTERPRISES

- A business owned by a local authority.- Examples of such municipal enteprises incude:

o Bus companies,o Golf courses,

o Creamatoriums ando Sports complexes.


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- The local authority controls the enterprise by appointing a Trading Committee,made up of unpaid councillors.

- This committes, in turn, appoints full-time staff to carry out the day-to-dayrunning of the enterprise.

PRIVATE SECTORS ENTERPRISES

BUISNESS ORGANISATIONan organisation established with the purpose ofproducing and selling goods and services.

LIABILITY (odgovornost)the responsibility to settle a debt.Two types of liability:

- LIMITED LIABILITY (ograniena odgovornost)o responsibility to the value of the investment in the United companiy.o A legal safeguard that allows shareholders to be liable for their

companys debts only up to and including the value of theirshareholding.

- UNLIMITED LIABILITY (neograniena odgovornost)o The risk to sell personal assets (property) to pay for business debts.o A legal obligatin on the owners of a business organisation to pay all

debts of the business. Even their own personal wealth may be claimed.

ASSETS (aktiva; imovina)items of value belonging to a person or a company suchas shares, a piece of land, a building or a machine that cam be sold to pay a debt.

DEBTORS (dunik)person who owes moneyCREDITORS (vjerovnik)person to whom one owes money

DEBENTURE (obveznica)certicificate given by a business corporation etc. as areceipt for money lent at a fixet rate of interst until the principal is repaid.

SHARE (dionica)one of the equal parts into which the capital of a company isdivided

- ORDINARY SHARE (obine dionice)on which dividends are paid according

to profits after payments on preference.- PREFERENCE SHARE (povlatene dionice)one on which a fixed dividendis guaranteed before payment are made on others.

- EQUITYordinary stocks and shares not bearing fixed interest.

GROSS PROFIT MAKGIN (mara)the difference between the price that a productor service is sold for and the cost of producing it, without including overheads.

OVERHEADS (trokovi)a companys general costs for activities not related toparcticular products.


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MERCHANT BANK (trgovaka, poslovna banka)a bank that deal with businessrather than the general public. They advise an and arrange finance for investmentand takeovers, and advise financial institutions on where to make investments.

BANKRUPTnot having enough money to pay your debts.

BANKRUPTCYwhen someone is judged to be unable to pay their debts by a cortof low, and their asseta are shared among the people and businesses that they owemoney to.

MORTAGAGE (hipoteka)legal arrangment where you borrow money from afinancial institution in order to buy land or a house, and you pay back the money overa period of years. If you do not make your regular payments, the lender normally hasthe right to take the property and sell it in order to ger back their money.

1. SOLE TRADE OR SOLE PROPRIETORSHIP- The simplest and commonest form in the UK.- These are businesses owned by one person only and that person may employ

other workers.- Also one person provides the capital, has complete control of the business,

keeps all the profit and bears the loss and has unlimited liability.- If sole proprietor goes bankrupt, all the assets of the business sach as shop or

factory and machinery and all the proprietors personal possessions sach ashouse and car etc. can be sold.

- They are commonly hound in many professions such as: shop owners,plumbers, doctors, hairdressers etc.

o Advantages:- It is simple to set up.- The owner can have complete control of the business.- There is no legal requirement to publish accounts.

o Disadvantages:- Unlimited liability.- Great difficulty in obtaining finance.- The firms is too small.

2. ORDINARY PARTNERSHIP:- Are unlimited liability businesses with between two and twenty partners orshareholders.

- They are commonly hound in professions such as: medicine, accountancy andthe law.

o Advantages:- It is cheap and easy to form,- Having more than one owner,- Amount of money can be raised for investment in the businesses.- There is no need to disclose publicly the accounts.- Partners who do not work in the business can have limited liability

this sort of partnership is known as a limited partnership.


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o Disadvantages:- Unlimited liability for ordinary partners,- Partners have to trust each other,- If one partner leaves, the whole partnership is dissolved and new onehas to be formed by the remaining partners.

3. JOINTSTOCK COMPANIES:- Are most important form of buisnesses organisations in UK, because that

companies are bigger and produce a larger proportion of total output.- Joint-stock companies are owned by shareholders, minimum two by law.- Shareholders elect a Board of directors ana Chairman and Board of Directors

appoint managers to run the day-to-day business of the company.- The shareholders have limited liability.- There are two types of joint-stock company:

o A PRIVATE LIMITED COMPANY OR LTDusually the smaller of thetwo types. It can range from a small famioly business, with just few

shareholders, to much larger companies. The shares of the companyare not freely available for purchase by the general public.

- from two to fifty members, provide the capital which is divided into shares,- obtain capital from the profits or by borrowing from banks,- controlled by a Board of Directors elected by the shareholders,- shrares can not be sold publicly.- limited liability,- legal requirements documents to the Registra of Companies, publication of

annual accounts,- mediumsized companies in manufacturing and relailing.

o A PUBLIC LIMITED COMPANY OR PLCusually the biggereof thetwo types. The company must have 50.000 pound worth of capitalwhen it is formed and the shares must be freely available for purchaseby the general public on a stoch exchange.

- from two to hundreds of thousends of shareholders,- one vote for each share they own,- limited liability,- legal requtements, set out in the Companies Act,- publish their accouunts,- shareholders are owners elect the Board of Directors,-

sell their shares on the Stock Exchange,- the profit which is not re-invested in the company is out as a dividend.- Anyone buying 51% of the shares gains control of a company.

Advantages of joint-stock companies:- they have access to wider sources of capital,- shareholders have limited liability- can enjoy economies of scale,

Disadvatages:- accounts have to be made available to the public,

- it is very expansive to form,


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Finance:- borrowing from the banks or finance houses,- issue debentures,- issue shares.- Issue of new equity.


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THE RULE OF GOVERMENT

Major areas of responsibility:1. the maintenance of a low level of unemployment,2. price stability (low levels of inflations),

3. high economic granth,4. a balance of foreign trade (more export than imports)

* more jobs more money* lower inflation . cheaper production.. more export .. more money* a surplus of exports over imports .. more money* surplus (import) .. deficit (export)* higher grouth . better income . more money* higher standard of living . social welfare (health, comfor, hapiness)

Two views of the role of government:Left wing views:

- essential in providing the economic ifrastructure (public transport, trains, busesand teleconnunications) and srevices such as education, helth care, socialsecurity (unemployment and sickness benefits, old age pensions)

Right wing views:- restricted to activities such as defence (army, navy, airforce) the police, and

the justice system, prisons and so on.

To much regulation is bad for business and leads to inefficiency.Many of these activities can be left to private enterpise and the market system.

Vocabulary:

1. obviousevident,2. inexpensivelow cost,3. inconsisten with or contrary toto be at use with4. bad healthillnis5. remembered or not forgottento be born in mind,6. poor or unemployed peopleneedy, underclass7. rich or wealthy peopleoverclass8. successedachivements

9. unwillingly, not eagerlyreluctant10. global or worldwideplanetary11. costlyexpensive12. disposed ofspent, used of consumed,13. on our behalfdone for us14. a physiciana medical doctor15. ailments(non-serious) illnesses16. to resort to forceto use violence,17. to coerceto compel people to do something against their will18. a morticiansomeone who arranges funerals19. a plumbersomeone who fixes water pipes

20. a host ofa large number of


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NATIONALISION AND PRIVATISATION

ECONOMIES OF SCALEthe reduction in unit cost and increase in profit obtainerwhen goods are produced in large quantities.

PRIVATISATIONa change in the production of goods and services from the publicsector to the private sector. It often refers to the sale of government-owned firms toprivate sector.e.i. the transfer of government controlled company or industrs into private ownership.

- Advantages:o competitionlower prices,o more choice,o improved quality,o sensitive to the demands of consumers,o innovation.

More efficiently managed company brings more choice, lower prices, better quality

and innovation new productsDIVERSIFICATION.

NATIONALISATIONthe purshase of a private company by the public sector.e.i. the process or result of bringing a comapany or different somapnies in the sameidnustry under central government control.

- Advantages:o exploits economies of scale better than several smaller firms,o avoids natural monopolies,o impoves performance,o prevents massive job loss,o the government can control the economy more easily,o preserve national defence interests,o socially right.

MONOPOLYa situation where a business activity is controlled by only onecompany or by the government, and other companies do not compete with it.

NATURAL MONOPOLYan industry where there is only one produces because ofthe nature of the activity.A monopoly situation that arises because only one firm can fully exploit all theeconomies of scale existing in the industry.

Electricity is on example of a natural monopoly, as it would not be very efficient tohave two companies supplying the same area, as this would result in two sets ofcables, pylons, transformers ets.

COMPETITION:- choice,- quality,- price,- inovation.

SOCIALLY RIGHTfor the benefit of everybody in sociaty.


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COMPANY STRUCTURE

Basic words used in relaton to company organization with DEFINITIONS:autonomusindependent, able to take dicisions withaut consalting a

higher authority,

decentralizationdividing an organization into decisionmaking units that are notcentrally controlled,

functiona specific activitiy in a company, e.g. production, marketing, finance.

hierarchya system of authority with different levels, one above the other,

line authoritythe power to give instructions to people at the level below in the chainof command

report toto be responsible to someone and to take instuctions from him or her

subordinatespeople working under someone else in a hierarchy

Company structure or organizational structure are:HIERARCHICAL OR PYRAMIDAL STRUCTURE:

- have most organizations, where is one person or a group of people at the topand an incresting number of people below them at each successive level.

STAFF POSITION:- its holder has no line authority and is not integrated into the chain of

command.

FUNCTIONAL STRUCTURE:- today, the most large manufacturing organizations have a functional structure.

For example production and marketing departments cannot take financialdecisions withaut cosulting the finance department.

- Functional organization is efficient, but there are two standard criticisms.Firstly, people are usually more concerned with the success of theirdepartnent than that of the company and secondly, separating functions isunlikely to encourage innovation.

MATRIX STRUCTUER OR MATRIX MANAGEMENT:- is that structure in wich people report to more than one superior. This is one

way of keeping authority at lower levels, but it is not necessarily a very efficientone.

Verbs for describing structure are:- consists of- contains- insludes- is compsed of

- is made up of- is divided into


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e.g.The company consists of five main departments.The marketing departments in made up of three units.The sales department is divided into two sections.

Verbs frequently used do describe company organizationinclude:- to be in charge of- to be responsible for,- to support or to be supported by,- to assist or to be assisted by,- to be accountable to,- to be responsible to someone.

e.g.The marketing department is in charge of the sales force.The marketing department is responsible for advertising, sales promotions and

market research.The five department heads are accountable to the Managing Director.

Example of part pf a company organization chart:

ChairChair p erson (predsjedavatel j ; Uprava)Board of Directors with a ChairmanGB

or President - US

DEPARTMENTS

Produ ct ion Market ing Finance Research and

Development

Human

Resources

SECTIONSProduct ion contro l

- scheduling

- materials control

Purchasing

Manufacturing

- tooling- assembly- fabrication

Quali ty contro l

Engineer ing support

Sales

Sales promotio n

Advert is ing

Financial Management

- capital requirements

- found control- credit

Account ing

Responsible

for

recrui tmentand

personnel

matters

Charge of

training

Managing DirectorGB

OrChier Executive Offocer - US


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Synonymsverbs who mean the same are:1. con sist of - to be made up of,

- to be composed of,- to divided into,- to be included

2. imm ediate bos s - superior

3. respon sib le to - report to

4. l ine fo commandchain of command


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COMPETITION AND COMMUNICATION

Competetionimportant:- to maximaze productiviti,- to maximaze crativity,

- to maximaze inovation,- to maximaze welts.

- to account forto explain (objasniti)- to full behind (zaostati)- different industrial bells are situated on the outskritsETHOSway of thinking; the set of ideas, aims and moral attitudes belonging to she- members of an organisation- fierce competition- aquired someonehead husing

Conclusion:- isolared groups dont have chance to developed so fast (bad)- group of people (creative) is important

Communication:Linking words:

- This story all began This story all begin- In spite of . Despite - In fact Actually- Fortunately .. Luckily- Even though Although ..- But xy decided to ..- Next . Then ..- Finally .. Eventually ..- To begin with .. At first - After + ing After xy had p.p. he/she

Essay:- On the whole (generalising)- But . (contrast)-

Another point in favour is ... (focusing)- Although (contrast)- Also (addition)- A further (disadvantage, sequence)- Yet .. (contrast)- What? (rhetorical question, effect)- Taking every thing into consideration- Finally (sequence)

General speaking:- For xy it is

- In fast .. (aditional / real information)- But sadly .. (personal comment)


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- On the other hand . (contrast)- Another xx is ..- In spite of (contrast)- What?- All things considered ..

- In conclusion


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WHAT IS MANAGEMENT?

MANAGEMENTthe activity or shill of directing and controling the work of acompany or organization. Management, as we perform it today is a fairly recent idea.

- set objectivities,

- work out how to achive tham,- analyze the activities- divide the work into activities and individual jobs- select people to manage these activities and perform the jobs- form effective teams,- motivate their staff to work well,- train and develop their staff,- measure the performance of their staff.

- to set objectivites,- to allocate resources,

- to take responsibility,- to establish and maintain good relations,- to deal vith a crisis.- to adopt idea.

MANAGERsome one whose job is to manage all or parts of a company ororganization or a particular activity.

- they set objectives for their organization and then work out (decide) how toachive them,

- they analyse the activities of the organization and the relations among them,- they divide the work into disitinct activities and then into individual jobs,- they select people to manage these activites and perform the jobs,- they often need to make the people responsible for performing individual jobs

form effective teams,- they have to be goods at communication and motivation,- they need to communicate organizations objectives to the people responsible

for attaining them,- they have to motivate their staff to work well, to be productive and to contribute

something to the organization.- they make decisions about pay and promotion,- they have to measure the performance of their staff, and to ensure that the

objectives and performance targets set for the whole organization and forindividual rmployees are reached,- they have to train and develop their staff, so that their performance continues

to improve.

Layers:5. TOP MANAGER:

- high level, the person of people in charge of an organization who consider theneeds of the future and take responsibilitiy for inovation.

o The top managements role: Long range (term) planning, Policy making, The relations of the company with the outside word,


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Making decisions on the future of the company, the sort ofproduct lines and how to face up to the competation

Balance todays objectives and needs against those of the future Take responsibility for innovation Establish and maintain good relations with customers, major

supplier, bankers and goverments agencies. Work for a team.

6. M1SENIOR MANAGER:- the most important managers in an organization sach as company chairmen

and directors who sat objective and decide how their organization can achievethem. This involves developing strategies, plans and precise tactics andallocating resources of people and money.

7. M2MIDDLE MANAGER:

- managers between senior and junior managers, the person who run aogranization day to day.

8. M3JUNIOR MANAGER:- managers at the lowest level.

ENTREPRENEURSare people who are alert to so-far undiscovered profitopportunities.

- they perceive opportunities to form new technologies and prodicts,- they are happy to risk their own or other peoples capital,- they are frequently unconventional, innovative people.

PUBLIC RELATIONS - PR- they can relate with customers, with other comomanies, with banks and nou

profitable organizations.

CREATIVITYproducing (generating) new and original ideas and things.Createdo something

INNOVATIONthe the introduction and implementation (putting into practice) newthings.

Innovateto implemente

SET OBJECTIVESsomething that you are traying to achieve.


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MANAGEMENT AND CULTURAL DIVERSITY

What are the element that makes management different?- hubits, social status, cultural divide, education and expirence.

Cultural divide exist:- In the countries of North America and north-west Europe, where management

is largely based on analysis, rationality, logic and systems ando North America + Europa:

analysis, rationality, logic, systems individualist, status, pay-for-performance matrix organisation, universalists

- The Latin cultures of southern Europe and South America where personalrelations, intuition, emotion and sensitivity are of much greater importance.

o Southern Europe + South America:

Personal relations, intuition, emotion, sensitivity Colletivist culture, loyolity, particularist

- the largely Protestant cultures sach as Canada, the USA, Britan, theNetherlands, Germany, Scandinavia are essentially individualist.

- In such cultures, status has to be achieved and young, dinamic, aggressivemanager with an MBA (a Master in Business Administration degree) canquickly rist in the hierarchy.

- In most Latin and Asian cultures status is automatically accorded to the bosas,who is more likely to be in his fifties or sixties than in his thirties.

- In northen cultures , the pripciple of pay-for-performance often successfullymotivate salespeople. The more you sell, the more you get paid.

But the principle might (snaga, sila) well be resisted in more collectivist cultures, andin countries where rewards and promotion are expected to come with age andexpirience.

US Multinational company:- curtular differences- export management to subsidares or adapt methods to the local culture- given a huge quarterly bonus under a new policy imposed by head office.

Glocalisationglobal companier in local environment. The idea that companis shuldthink globally, but use methods in each particular place that are suited to it.

Grosscultural managementmanaging multinationals + glocalisation

VOCABULARY:

rationalitythe use of reasoning than emotions or belifsintuitionundesrstanding or knowing without consciously using reasonstatusrespect, prestige or importance given to someoneseniorityhaving a higer rank because one is older

ofendedto have hurt feelings because someone is being disrespectfulrewardmoney or something else given in recognition of good work


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bonusadditional money given for better work or increased productivityhumiliationa feeling of shame and loss of diginity or self-esteemto resigneto give up a job or positionetnicalaccording to accepted moral standards


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RECRUITMENT

VOCABULARY:appl icant(natjecatelj, kandidat za posao) person who applies for the job.

appl icat ion(zahtjev, molba za posao)making of a request, We made anapplication to the court for an enquiry.

appl icat ion form(obrazac za molbu) form to be filled in when applying for job.

apply(podnijeti molbu, natjecati se) to reply to an advertisement

candidateor appl icant

Curr icu lum vitae or CV (GB) or resum e (US)(kratak ivotopis) brief writtenaccount of ones past history e.g. education, employment used when applying for a

job.

employm ent agencies(zavod za zapoljavanje) - business establichment whichhelps person or companes to find a job or candicates for job.

in terview(razgovor, intervju za posao) - meeting between employers and applicantsfor formal consultation or examination.

Job descr ip t ion(opis posla)

job vacancies(potranja za poslom, oglasi) - many people read the job vacancieswhen looking for work in newspapers or on the internet.

References(preporuka) statement about a persons character or abilities

Short l isted (ui izbor)- sellected to attend an interview.

CURRICULUM VITAE or RESSUMEparts:

Curriculum vitae

My name:

My address: My phone numbers:My e-mail address:

My date of birth:

Nationality: always begin with a capita l let ter: Franch , German, JapanMarital status:

Objective:

Work experience or professional experience:

Education of qualification:


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Computer skills:

Languages:

Hobbies and interests:

Refferences or testimonials (US): min im un o f two refereesThe fol low ing peop le can prov ide references:

When employees GIVE NOTICE i.e. inform their employer that thay will be leavingthe company (as soon as their cintract allows), company carry out the foffowingsteps:

21. Try to discover why the person has resigned,22. Examine the job description for the post, to se whether it need to be

changed (or indeed, whether the post needs to be filled).

23. Establish whether there is an internal candidate who could bepromoted (or moved sideways) to the job.

24. Either hire a job agency (of for a senior post, a firm of headhunters),or advertise the vacancy.

25. Reseive applications, curricula vitae and covering letters, and makea preliminary selection (a shortlist)

26. Follow up the references of candidates who seem interesting.27. Invvite the short-listed candidates for an interview.28. Make a final selection.29. Write to all the other candidates to inform them that they have been

unsuccessful.


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LABOUR RELATIONS:

VOCABULARY:col lect ive bargain ing(zajedniki sporazum) negotiations between unions andemployers about their member wages and working conditionas.

a str ike(trajk) a stoppage of work, as a protest against working conditions, lowpay and so on.

a go slow (GB) or s low dow n (US) a deliberate reduction in the rate ofproduction, as a protest.

work ing- to-ru ledebliberately obeying every regulation in an organization, whichseveraly disrupts normal operation

indu str ia l act iona general term for strikes, go-slows, work-to-rules and so on.

to p icket (trajkaka straa) to protest outside a factory or other workplace, andtry to persuade workers and delivery drivers not to enter.

Industrial relations:- Workers in many industries are organized into unionswhich attempt to protect

their members interests.- Unions are known as labor unions (US) or trade unions in Britain, because

they are largely organized according to area of worktrade or skill.- In other countries (France) unions are largely organized political because

employessworkers or staff in different idustries join a union with a particularpolitical position.

- The functionrole of unionsare:o to attempt a ensure fair wagespay,o reasonable working hours and safe working coditions for their

members,o they take part in collective bargaininggroup negotiations with

employers,o pursue with management the grievances - complaints of individual

employees ,o defend workers who cosider that they have been victimizedunfairly

trated,o insist on the reinstatement of a worker who was unfairly sacked

dismissed,- The most powerful weapon on union is to go on strikestop working.- Workers on strike picket their place of workstand outside the entrance

and traying to persuade other workers and delivery drivers not to enter.- Unions sametime take other forms of industrial action,because striking

workers dont gat paid, sach as:o a go-slow (GB) or slowdown (US),o a work-to-rule

- Labour relationsare usually better because employers consider unions as

necessary partners, to be regularly cosuleted on matters which concern them.


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Synonyms:

1. area of worktrade,2. employeesstaff,3. functionrole,4. wagespay,

5. collective bargaininggroup negotiations,6. grievancescomplaints,7. victimizedunfairly treated,8. sacheddismissed,9. to go on strikestop working,10. distegardedignored,11. adversaryenemy,12. uneconomicunprofitable

Phrases:

1. to go on strike,2. to joint a union,3. to picket a factory,4. to reinstate a workers,5. to take industrial action.

Peoplethe most important resources and the most costly resources.

Conf l icts between:

- the emplyerwho wants to minimise his wage,- the employeewho wants to achieve the highest pay.

Indu str ia l relat ionsthe relations between employees and employers ormanagement.

Trade un ionsassociations of people who join together in their common interests toregulate the relations between employees and employers.

- Workers pay a small subscription which the union uses to employ skilledofficials to act on the workers behalf.

- Employers have discussions and negotiations with a small number of people

rather than many.

Trade union s aims (ci l jevi):

- improved wages and reduced working hours,- improved working conditions,- full employment (important for pension, helth insurance, lown-current account),- job security,- benefits for members who are sick, retired or on strike,- improved social security schemes such as unemployment, sickness benefits

and pensions,- participation in company decision processes.


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Collest ive bargain ingtalks between representatives of employers and tradeunions to decide pay rates and other terms and conditions of employment.

Restr ict ive pract ises(methods or weapons used in on industrial dispute) are:1. STRIKE:

A) officialwith union approval and backing the union provides strike payfrom funds coutributed by members,

B) unofficial or wildcat strike the workers cease work without unionbacking,

2. OVERTIME BAN:- the workers refuse to work additional hours,

3. WORK TO RULE:- work is slowed down and productivity is reduces,

4. GO SLOW or SLOWDOWN:- work at a slower pace, causing a full in output,

5. PICKETING:- occupy the promises,

6. BLOCKING:- workers refuse to work on or move certain machines or equipment or refuse to

work with other people or groups.

Labour re lat ions:

1. The role of function of unions:- work is changing all the time,- unions are necessary voice,- to reach the widdle ground (nai zajedniku sredinu).

2. The attitude governments and companies . Should have in relation tounions:

- trade union is very important for working people (Germany, Japanstrongunions, USAbodly organised unions),

- important for social peace and team working,-

trade unions must be dinamic (unositi promijene)


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BUSINESS FINANCE:

The company needed more money for:- promotion,- pay their day-to-day material costs and

- to finance investment:o to start up a new product or company,o or to buy new factories and machineryo or to fund research and development.

The sources money for companies are:1. Retained profit:- major sources, this is money that the company has made in profits and instead

of being given out to shareholders in dividents. It is kept back by the companyfor investment.

- retained profit - profit who is not distrubuted to shareholders, but kept

back for investment purposes.

2. Borrowing money or Loans:- from a bank and paid back in rebural instalments- or redamptionpaying back.

- from the money markets; firms can go to a financial centre and borrow moneyfrom a wide variety of institutions sach as person funds and insurancecompanies.

- one form of such borrowing is debentures or loan stocka fixed interestsecurity issued by a company in return for a loan of money. Thecerificate can be sold ana resold if decired.

- from the finance housesa bank that specalised in hire-purchase loans.- haire purchasea form of borrowing where the good being purchased is

the property of the lender up to the final payment, when it becomes toproperty of the borrower.

- Firm also can rent goods on a leasing agreement.- leasing or renting.

- from the government; the government has been particularly keen to help small

firms.

3. Equity capital or new equity:- a company can gain further money by selling new shares in the company.- equitythe monetary value of shareholdings in a firm at a particular

moment in time.

4. Government grants (novana pomo drave):- company has also obtain grants for new investment from the government.- Usually recive them for:

o Investing in high unemployment areas,

o Investing in new technology,o Restructuring and running down older industries.


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Companys capital:Internal capital:

- shareholders capital- reserves

External capital:

- borrowing money,- grants,- new equity capital

Money markets (Stock exchange)sell shares (GB) or stocks (US)

Difference between shares and bounds:SHARES BOUNDS

1. their owner is the owner of thecompany,

2. they enlarge the owners capital,

3. no paying back,4. dividents

1. they owner is not the owner of thecompany,

2. they enlarge the external capital,

3. invested money must be given back,4. interest (kamata)

Balance sheet:1. assets (imovina),2. liabilities (potraivanja)3. owners equity

assets = liabilities + equityliabilities = assets - equity

DIVIDENDa part of the profits of a company for a particular period of time that ispaid to shareholders for each share that they own.

STOCK MARKETa market wher company stares are traded

OVERDRAFT- to take out more money than you have in your account; paid withincome on the account.

LOANa sum of money borroved from a bank; paid back with regular instalments


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PRODUCTS:

Definitions:1. a productis defined by marketers as anything capable of satisfying a need

or want (including services such as a bank loan, a haircut, a meal in a

restaurant, or a skiing holiday).

2. a brandis a name (or sometimes a sign, symbol of design) used to identifythe goods or services of a particular manufacturer, seller or supplier, and todifferentiate them from the goods or services of competitiors.

3. a product lineis a group of closely related products, wich usually have thesame function and are sold to the same customer groups through the sameoutlets (prodajno mjesto).

4. a product mixis the set all the product lines and items offered by a

company.

5. convenience goodsare cheap and simple low involvement productswhich people use regularly and buy frequently with little effort, withoutcomparing alternatives.

6. speciality goodsare durable goods with unique characteristics thatinformed consumers have to go to a particular store to buy.

7. shooping goodsare hight involvement products for which consumersgenerally search for information, evaluate different models, and compareprices, and take time to make a selection.

8. product eliminationis the process of withdrawing products from the marketwhen they are no longer profitable.

9. Line fillingmeans adding further items in that part of a product range whicha line already covers, in order to compete in competitors nichers, to utilizeexcess production capacity, and so on.

10. line-stretchingmeans lengthening a companys product line, either moving

up-market or down-market in order to reach new customers, to enter growingor more profitable market segments, to react to cimpetitiors inituatives, and soon.

11. credit facilitiesthe possiblitiy of paying for a product over an extendedperiod.

12. guaranteea promise by a manufacturer or seller to repair or replacedefedtive goods during a certain period of time.

13. shelfa surface in a store on wich goods are displayed.


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14. brand switcherconsumers who buy various competing products ratherthan being loyal to a particular brand.

15. product line cyclethe standard pattern of sales of a product over theperiod that is marketed.

16. profitabilitythe extent to which an activity provides financial gain.

17. opportunitypossibilities of filling unsatisfied needs in sectors in wich thecompany can produce goods or servicies effedtively.

18. market sharethe seles of a company expresed as a percentage of sales ina given market

19. immagethe set of beliefs that the public at large holds of an organization.

20. nichea small, specialized but profitable segment of a market.


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PRODUCTION:

Vocabulary:1. subcontractorany company that provides goods or services for another

one,

2. component- any of the pieces or parts that make up a product, machine, etc.

3. outsourcing or contracting outbuying products or processed materialsfrom other companies rather than manufacturing them,

4. capacitythe (muximum) rate of output that can be achieved from aproduction process,

5. plantthe buldings, machines, equipment and other facilities used in theproduction process

6. locationthe geographical situation of a factory or other facility.

7. inventorythe stock of any item or resources used in an organizaion(including raw materials, parts, supplies, work in process and finishedproducts),

8. lead timethe time needed to perform an activity (i.e. to manufacture ofdeliver something)

Operat ions managers:

- decide what to manufacture,- decide where to manufacture the different products,- how much productive capacity their factories and plants shuld have,- how much inventory to maintin.

Jus t-in-t ime (JIT) prod uct ion :

- or lean production, or stockless production, or continuous flow manufacture,- noting is bought or produced until it is needed,- is usually credited to Taiichi Ohno, who was vice-president for manufacturing

with Toyota in Japan in te early 1950s.


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MARKETING:

Marketing:- activities to design and sell a product or service by cousidering buyers wants

and needs, for example where and how they will buy it, how much they will be

willing to pay etc.- is the process of developing, pricing, distributing and promoting the goods or

services that satisfy customers needs.- distributing goods from the manufacturer to the final cousumer.

MARKET MIX4 Ps:- Product, include: quality, features, style, brand name, size, packaging,

services and guarantee.

- Price, includes things like: basic list price, discounts, payment period andcredit terms.

- Promot ioninclude: advertising, publicity, sales promotion and personalselling.

and- Placeinclude factors such as: distribution channels, coverage of the market,

locations, points of sale, inventory size etc.Are:- the set of all the various elements of a marketing programme, their integration

and the amount of effort that a company can expend on them in order toINFLUENCE the target market.

Vocabulary:dis t r ibu t ion channelall the companies or individuals involved in moving aparticular good or service from the producer to the consumer,

t o lounch a produc tto introduce a new product onto the market,

market opp ortun i t iespossibilities of filling unsatisfied needs in sectors in wich acompany can probitably produce goods or services,

market researchcollecting, analysing and reporting data relevent to a specificmarketing situation (such as a proposed new product).

market segmentat iondividing a market into distinct groups of buyers who havedifferent requirements or buying habits,

packag ingwrappers and containers in wich products are sold,

poin ts of sa leplaces where goods are sold to the publicshops, stores, kiosks,market stalls, etc.

produc t concep tan idea for a new product, wich is tested with targer consumersbefore the actuals product is developed,


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pro duc t featuresattributes or characteristics of a product: quality, price, reliabilityetc.

sales representat ivesomeone who contacts existing and potential customers, and

tries to persuade them to buy goods or services,

a product m anager or a brand managerpearson who looks for ways to increasesales by changing the marketing mix.

se l l ing co nceptassumes that resisting consumers have to be presuaded byvigorous hard selling techniques to by non-essential goods or services.Product are slod rather than boughton the contrary.

market ing con ceptassumes that the producers task is to find wonts and fill them.You dont all what you make, you make what will be bought.

Marketers have (can) to:- identify or anticipatea consumer need;- developa products or service that meets that needany cometing products or

services;- persuadetarget customers to try the product ir servuce;andmodifyit.- designparticular features, attractive packaging and effective advertising, that

will influenceconsumers wants.

What is Marketing?- Can be defined as all the potential customers shareing a particular need or

wants.- Marketing combines:

o market research, new producet development, distribution, advertising,promotion, product improvement and so on,

- Seccessful marketing understands the customer so well that the product orservice satisfies a need so perfectly that the customer is desperate to buy it.

- Marketing opportunities are possibilities of filling unsatisfied needs.- Makret segmentation are dividing a market into submarkets or segments

according to customers requirements or buying habits.- Market targetmarketers have:

o

identify conusmer needs and anticipate them by developing newproducts;o design marketing strategis;o plan marketing programmes;o organize;o and control the marketing effort.

- Marketing can also involve the attempt to influence or change consumersneeds and wants.

- Marketing also involves regulating the level, timing and character of demand.


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MARKETING STRATEGIES:

Companys marketing strategies:- Are sets of principles designed to achieve long-term objestives, obviously

depand on its size and position in the market.

- Other factors are:o the extent of the companys resources,o the strategies of its competitors,o the behaviour of the consumers in the targer market,o the stage in the product life-cycle of the products it markets, ando the overall macro-economic environment.

- Aim of a market leader is to remain the leader and the best way to achieve thisis to increase market share even futher.

- A market can be incerased by:o finding new users for a product,o stimulating more usage of a product, oro exploiting new uses.

- To protect a market share, a company can:o innovate in: products, customer services, distribution channels, cost

reductions and so on,o extend and stretch its product lines to leave less room from

competitors,o confront competitors directly in expensive sales promotion campaigns.

- Market challengers can:o attempt to attack the leader oro increase their market share by attacking various market followers.

- If they attack the leader, market challengers use stratergies also available tomarket leaders such as:

o product innovation,o price reductions,o cheaper or higher quality varsions,o improved services,o distribution channel innovations,o manufacturing cost reduction,o internsive advertising and so on.

WERBS:

1. prod uct l i fe cycle,2. determinin g factors,

3. dist ibu t ions chann el,

4. prod uct l ine,

5. sales prom ot ion ,

6. economy scale.


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ADVERTISING:- to advertise,- advertiser,- adverisement,- advertising,

Vocabulary:

word-o f -mouthfree advertising, when satisfied customers recommend products totheir friends,

inst i tut ion al advert is ingadvertising that mentions a companys name but notspecific products,

advert is ing agenciescompanies that handle advertising for clients,

accoun ta contract with a company to produce its advertising,

advertis ing bu dbetthe amount of money a company plans to spend in developingits adverising and buying media time of space,

briefthe statement of objectives of an advertising campaign that a client works outwith an advertising agency,

advertis ing campaignthe advertising of a particular product or service during aparticular period of time

target marketa defined set of customers whose needs a company plans to satisfy,

media plannersthe people who choose where to advertise, in order to reach theright customers,

thresho ld effectthe fact that a certain amount of advertising in necessary toattract a prospective customers attention,

CPM (Comparat ive pari ty method)choosing to spend the same amount onadvertising as ones competitors.

CCA (Coun ter-cyc l ical l advert is ing)advertising during periods or seasons whensales are normally relatively poor.

How to be benef i t f rom advertis ing?

- Firms benefit from advertising if increased sales and profits more than coverthe cost of carrying out the advertising but we also benefit as consumers andcitizens.

Advert is ing?

- let us know what goods are available ana provides information about them;

- allows as to compore different products in order to make the best choice;


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- increases the size of firms and competition between firms bringing greaterefficiency and lower prices;

- helps to raise the quantity and quality of goods produced so raising livingstandards;

- gives indirect benefits, such as: keeping down the cost of newspapers and

magazines, provicing commercial television and generally making our livesmore interesting;

- creates jobs in the advertising industry itself and through greater sales ingeneral.

Corpo rate advert is ing:

1. company websites;2. annal reports;3. newspaper articles;4. sponsorship of international or local sport and cultural events,

MEDIUMa way of communicating information and news to people.

THE MEDIA all the organisations, such as: television, radio, and the newspaperthat provide information for the publich.

MEDIA COVERAGEthe ammount of time given to an event by the media.

AIDA attention- interest- desire- action

SLOGANa phrase used by advertisers;- short;- easy to remember;- easy to repeat;

Media for advet is ing:

- making the product of service known to a wider andience1. print media;newspapers, magazines, brochures, leaflets, journals 2. broadcast media;TV, radio, cinema

3. outdoor advertising;posters, hoardings, billboards 4. point of sale advertising;window, displays, stands 5. endorsement;famous people speak on behalf of a product 6. transportation advertising;signs on public transport rehicles, in stations ..7. other media;calendars, matcbooks, pens 8. skywriting

Cllient company and advertising agency = account

Advertising accountugovor agencije i firme

OTSopportunities of see


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PROMOTIONAL TOOLS:

Standard promotional tools are;1. advertising;2. sales promotions;

3. public relations;4. personal selling.

Advert is ingtelling people publicly about a product or service in order to presuadethem to buy it.

Sales p romo t ionsan activity such as: special advertisements or free gifts intendedto sell a product or service.Can be aimed at distributors, dealers, retailers, salles force, encouraging them toincrease their activities in selling a particular product.

Sach as:- free samples (the initial trial of a new product.)- coupons- price reductions- competitions.

Are temporary tactics designed to stimulate either earlier or stronger sales of aproduct.

Publ ic relations (PR)the activity of telling the public about an organization person,product etc. so that people think of them in good way.Relations between a corporation and its investors, customers, shareholders.Publicityany mention of a companys products that is not paid.

Is concerned with maintaining, improving or protecting the imageof a company orproduct. The most important element of PR is publicity.

Personal sel l ingis the most expensive promotional tool, and is generally onlyused sparingly, e.g. as a complement to advertising.As well as:

- prospecting for customers,- spreading information about a companys products and services,-

selling these products and services, and- assisting customers with possible technical problems


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ACCOUNTING AND FINANCIAL STATEMENTS

Vocabulary:bookkeep ingwriting down the details of transactions (debits and credits);

account ingkeeping financial records, redording income and expenditure, valuingassets and liabilities, and so on;

manageria l accou nt ingpreparing budgets and other financial reports necessaryfor management;

cost account ingworking out the unit costs of products, including materials, labourand all other expenses;

tax account ingcalculating an individuals or a compans liability for tax;

audit inginspection and evaluation of accounts by a second set of accountants;

crative accountingusing all available accounting procedures and tricks todisguise the true financial position of a company;

The most common terms in accountingVocabulary:shareho lders (GB) or sto ckh olders (US)a companys owners;

earn ings or incomethe revenues received by a company during a given period,minus the cost of sales, operating expenses, and taxes

l iabi l i t iesall the money that a company will have to pay to someone else in thefuture, including taxes, debts, and interest and mortgage payments;

tu rnoverthe amount of business done by a company over a year

assetsanything owned by a business (cash investments, buildings, machines, andso on) that can be used to produce goods or pay liabilities.

deprectat ion (GB) or amort izat ion (US)the reduction in value of a fixed asset

during the years it is in use (charged against profits)

debtors (GB) or acco unts receivable (US)sums of money owed by customers forgoods or services purchased on credit

creditors (GB) or accou nts p ayable (US)sums of money owed by suppliers forpurchases made on credit

stoch (GB) or invento ry (US)the value of; raw materials, work in progress, andfinished products stored ready for sale

overheads (GB) or overhead (US)the various expenses of operating a businessthat cannot be charged to any one product, process of department.


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ACCOUNTraun, korist, probitak, platiti ili srediti rauneStatement of money to be paid or received for goods, services.

BOOKKEEPING raunovodstvo kao sektor firmeThe recording of all money received into and paid out of a company in a book or on a

computer file.

ACCOUNTING raunovodstveni izvjetaj, to do bookkeepingBookkeepers record business transaction.The work of keeping cheking accounts and analysing financial records in order tosupplay people with informations.

ACCOUNTANCY raunovodstvo kao znanstvena disciplinaProfession of an accountant. The study to become an accountant.

ACCOUNTANT raunovoa

Person whose profession is to keep and examine business accounts.

Accountants do:- record cash flows, and the value of assets and liabilities, and they calculate

profits and losses and so on.- supply people with informations.

Companies generally include three financial statementsin their annual reports:1. the profit and loss account (GB) or income statement (US);2. the balance sheet3. the chas flow statement

THE PROFIT AND LOSS ACCOUNT shows:- revenne (turnover) sales,- expenditure (overheads and costs).

The profit should be greater:- taxation (part of profit goes to the government)- dividend (part is distributed to shareholders),- retained profit (part is tetained by the company).

THE BALANCE SHEET shows:-

the financial situation on a particular date, generaly last day of the financialyear,- the companys assets,- the companys liabilities,- shareholders funds.

Businesss assetsconsist of its cash investment and proparty debtors (amounts ofmones owed by customers for goods or services purchased on credit)

Liabilitiesconsist of all the money that a company will have to pay to someone else,such as: taxes, debts, interest and mortgage payments, as well as money owed to

suppliers for purchases made on credit which are grouped together an a balancesheet as creditors.


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ASSETS = LIABILITES + OWNERS (basic accounting equation)

NET ASSETS = OWNERS OR SHAREHOLDERS EQUITY include:- share capital (money recived from issue of shares),- share permium (money realized by selling shares at above their nominal

value)- companys reserves (including the retained profits)

THE CASH FLOW STATEMENTS shows:Also:Source and application of funds statement (GB) orThe statement of changes in financial position (US)

- the flow of cash in and out of the business between balance sheet dates,- sources of funds; include:

o trading profits,o depreciation provisions,o borrowing,o the sale of assets,o the issuing of shares,

- applications of funds; include:o the purchase of fixed of financial assets,o the payment of dividends,o the repayment of loans,o trading losses


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MARKET STRUCTURE AND COMPETITION

Vocabulary:Market sharesa companys sales expressed as a percentage of the total market;

Promot ionshort term tactics designed to stimulate stronger sales of a product;

Monopo lythe situation in wich there is only one seller of a product;

Compet i t ioncompanies offering similar goods or sevices to the same set ofcustomers;

Slogana short and easily memorized phrase used in advertising;

Market segmentat ionthe division of a market into submarkets according to theneeds or buying habits of different groups of potential customers;

Nichea small and specific market segment;

Differential advan tagea factor which makes you superior to competitors in acentain respect;

Turnovera businesss total sales revanue;

Recessiona period during wich an economy is marking below its potential;

Perfect com pet i t ionexists when products are homogeneous, and there are agreat many firms to small to have any influence on the market price, and firms caneasily enter and exist the industry;

A monopo lyis a market in a particular product in which a single producer can fixand artificial price;

Monopsonyis the situation in which there is only one buyer;

Monopo l is t ic com pet it ionexists when many producers of slightly differentialedproducts are able to sell than at well above their marginal cost;

Natura l monop olyis an industry in which the efficinets existence of more than oneproducer is impossible; examples include public utilities such as water, gas andelectricity, where it would be inefficient to have several competing companies layingtheir own networks of pipes of cables.

An o l igopo lyis a consentrated market dominated by a few large suppliers:

Econom ies of sca leare factors which cause the average cost of productingsomething to fall as output incerases;

Barr iers to entryare economic or technical factors that make it difficult orimpossible for firms to enter a market or compete with existing suppliers;


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A d ominan tf i rm ol igopo lyis one in which a market leader can indicate itspreferred price to smaller competitors;

A carte lis a group of producers or sellers who fix prices and quantities in order toavoid competition and increase profits. This is illegal in many countries, most notably

the USA.


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TAKEOVERS, MARGERS, BUYOUTS

Vocabulary:To innovate(innovation)designed new products and bringing them to the work;

To diversi fy(diversification)to expand into new fields;

To merge(a merger)to unite, combine, amalgamate, intergate or join together;

A ra idbuying another companys shares on the stoch exchange, hoping topersuade enough other shareholders to sell to take control of the company;

A takeover bida public offer to a companys shareholdersto buy their shares, at aparticular price during a particular period, so as to acquire a company;

Horizontal integrat ionto merge with or take over other firms producing the same

type of goods or services;

Vert ical integrat ionjoining with firms in other stages of the production or sale of aproduct;

Backward in tegrat iona merger with or the acquisition of ones suppliers;

Forward integrat iona merger with or the acquisition of ones marketing outlets;

Synergycombined production that is greater than the sum of the separate parts;


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FRANCHISING

Franchisethe right given by one business to another to sell goods or services usingits name.

Franchiseesomeone who is sold a franchise;

Franchisora company that sells a franchise;

Franchies feea fixed sum of money that franchisee pays to franchisor at the start ofpranchise agreement.

Franchise formata type of business which franchisor sells.

Management services feefranchise pays the fee to the franchisor.

Operations manuesinstructions about the business from the franchisor.

Master franchiseeperson which franchisee set up as a supervisor.

Advertising feebuyer of franchise pays for advertising to franchisor.

Documents

BE1-cijela-skriptaa