Test Bank For International Business Law and Its Environment - 10th - 2018 All Chapters

BUSINESS AND ITS ENVIROMENT
g g g



MANAGEMENT:gIsgdefinedgasgagmanagementgprocessgthatgisgresponsiblegforgplanning,gorganiz
ing,gandgleading,gcontrollinggandgcoordinatinggorganizationalgactivitiesgtogachievegcertaingbusinessg
objectives.gItgcangalsogbegdefinedgasgaggroupgofgpeoplegappointedgbygthegownersgofgthegbusinessgt
ogrungtheirgbusinessgongtheirgbehalf.

BUSINESS: g Refersgtogallgcommercialgactivitiesgthatgaregundertakengbygvariousgorganizationsgandgin
dividualsgwhogproducesggoodsgandgservicesgtogsatisfyghumangneedsgandgwantsgprofitably.

SYSTEM: g Refersgtogthegcollectiongofgallginterdependencegpartsgthroughgaggregationgsogthatgatgth
egendgwegcanghavegonegmeaningfulgactivitygthatgmakesgsense.

GOODS: g Refersgtogallgtangiblegthingsgthatgsatisfyghumangneedsgandgwants.gTheregaregthreegtypesgofg
goodsgwhichgaregconsumerggoods,gcapitalggoodsgandgdurableggoods.

SERVICES: g Thesegaregnongtangiblegthingsgthatgaregusedgtogsatisfyghumangneedsgandgwants.gForgexa
mplegteachinggandgteaching.

PRODUCTS: g Itgisgagcombinationgofggoodsgandgservices.

NEEDS: g Thesegaregessentialgproductsgforgthegbiologicalgexistencegofgagman.gExamplesgofgsuchgincl
udegfood,gsheltergandgclothing.

WANTS: g Thesegaregproductsgthatgmangcanglivegagnormalglifegwithoutgthem.gForgexamplegcellgphone
sgandgposhgcars.

DEMAND: g Itgisgthegamountgofggoodsgandgservicesgthatgconsumersgwishgandgaregablegtogbuygatgag
givengpricegovergaggivengperiodgofgtime.gDemandgisgdefinedgingtermsgofgquality,gtimegandgprice.

SUPPLY: g Thisgisgthegamountgofggoodsgandgservicesgthatgmanufacturersgwishgandgaregablegtogoffer
gtogagmarketgatgaggivengperiodgofgtimegandgprice.


BUSINESSgOBJECTIVES
Thesegaregaimsgorggoalsgwhichgagbusinessgseeksgtogachieve;gthisgisgthegreasongforgthegexistencegofgagb
usiness.

IMPORTANCEgOFgBUSINESSgOBJECTIVES
• Theygclarifygwhatgthegbusinessgisgworkinggtogachieve.

• Itgaidsgthegdecisiongmakinggprocess.

• Itgcangbegusedgasgagwaygofgmeasuringgthegperformancegofgangorganization.

• Itgcangbegusedgasgagwaygofgmeasuringgperformancegofgindividuals.

• Usedgforgspecializationgandgdivisiongofglabour.

, • Cangaidgplanning.



S-Specific

M-

MeasurablegA-

AchievablegR-

Realistic

T-Timegframe

LEVELSgOFgOBJECTIVES
• STRATEGIC g OBJECTIVES: g Thesegaregobjectivesgthatgaregmadegbygtopglevelgmanage
ment.gTheygconstitutegthegoverallgpurposegofgthegorganization.gThesegobjectivesgwillgdeter
minegthegpolicygformulation,gimplementationgandgevaluation.gThegstrategicggoalsgnormall
yglastglongergforgevenlygtheglifegspangofgthegorganization.gThegobjectivegwillgbegdelegatedg
togthegjuniorgmanagementgwhogwillgthengspecializegongdifferentgareas.g.



• TACTICAL g OBJECTIVES: g Thesegaregmiddleglevelgobjectives;gtheygrangegfromgagyeargt
ogfivegyears.gThesegwillgbegbrokengdowngfromgstrategicgtogcomegupgwithgspecializedgobject
ives.gThesegobjectivesgaregmadegbygthegfunctionalgmanagersgwhomgincludegAccountinggan
dgFinance,gHumangResources,gProduction,gSalesge.t.c.gTacticalgobjectivesgwillgshapegthegstr
ategicgobjectives



• OPERATIONAL g OBJECTIVES: g Theygaregimplementedgbygtheglowglevelgmanagersgwh
ogincludegsupervisorsgandgforeman.gTheygmakegobjectivesgongthegdaygtogdaygrunninggofgt
hegbusiness.gThesegaregtheglowglevelgobjectivesgwhichglastgnotgmoregthangagyear.

RELATIONSHIPgBETWEENgLEVELgOFgOBJECTIVESgANDgORGANISATIONALgCH
ART
Shareholders

Directors

Strategicgobjectives

gManagergDirectors



FunctionalgManagers
Tactical
objectives Dep’tgFunctionalgManagers

, Shopgfloorgworker Operationalgobjectives

BUSINESSgUNITSgORgBUSINESSgORGANISATIONS
Businessgunits

Businessgunitsgaregcategorizedgintogvariousgcategories.gThesegcangbegdiagrammaticallygillustratedgasgf
ollows.

FranchisegBusinessgJoi

ntgStockgCompaniesgPa

rtnership

SolegtradergPu

blicgsectorgPri

vategsector




PrivategLtdgCompanies

gPublicgLtdgCompanies




SOLEgTRADERS
Thisgisgagbusinessgthatgisgformedgbygagsinglegpersongwhoginjectsgmoneygintogthegbusinessghopinggto
gmakegprofitsgandgenjoygthosegprofitsgonghisgown.gTheygraisegmoneygtogcommencegbusinessgfromgf

riendsgandgrelatives.gThegbusinessgisgrunnedgandgownedgsolelygbygagsinglegperson.gLabourgtogrungth
egbusinessgorgforgassistancegisgfromgthegfamilygmembers.gThegfollowinggaregthegadvantagesgofgoper
atinggasgagsolegtrader.

ADVANTAGES

, • Fastgdecisiongmakinggprocess.

• Minimumgtradinggformalities.

• Thesegbusinessesgenjoygprivacy.

• Thegbusinessgisgmoregflexible.

• Operatinggasgagsolegtradergallowsgself-employment.

DISADVANTAGES

• Poorgdecisions.

• Lackgofgcontinuitygaftergdeathgofgthegowner.

• Unlimitedgliability.

• Nogeconomiesgofgscale.

• Nogemploymentgofgspecializedglabour.

PARTNERSHIPS
Duegtogthegproblemsgfacedgbygsolegtraders,gthegmembersgofgdifferentginstitutesgwillgagreegtogpoolgtog
ethergfundsgsogthatgtheygcangstartgagbusiness.gAgpartnershipgisgaglegalgandgbindinggagreement
betweengtwogtogtwentygmembersgwhogcontributegtheirgmoneygtogstartgagbusiness.gBeforegpartners
’gstartsgexecutinggduties,gtheyghavegtogdrawgupgagpartnershipgdeedgofgagreement.gTheregaregtwog
differentgtypesgofgpartnersgwhogcangbegeithergdominantgorgsleeping.

DOMINANT g PARTNERS

Thesegaregpartnersgwhogcontributegtheirgmoneygintogthegbusinessgbutgwillgactivelygtakegpartgunder
gthegdaygtogdaygrunninggofgbusiness.gForgexamplegangaccountantgwhoghasgcontributedgmoneygintog

thegbusinessgcangworkgasgangaccountantgofgthatgcompany.gThisgimpliesgthatgdecisionsgmakinggproc
essgisgparticipatedgbygthesegpartners.

SLEEPING g PARTNERS

Thesegonlygcontributegmoneygintogthegbusinessgbutgtheygaregnotgactivelyginvolvedgingthegdaygtogdaygr
unninggofgthegbusiness.gSleepinggpartnersgdognotgcontributegtowardsgthegdecisiongmakinggprocess.

PARTNERSHIPgDEEDgOFgAGREEMENT
Thisgisgagdocumentgthatgoutlinesgthegrules,gpolices,gproceduresgandgguideglinesgtogvariousgpartnersgi
ngthegorganization.gThisgdeedgofgagreementgasgagdocumentgisgusedgtogreducegthegprobabilitygofgcon
flictsgamonggmembers.gThegdocumentgcontainsgthegfollowing:

• Namegofgthegcompany.

• Namesgofgthegpartners.

• Entitlementgofginterestgongdrawings.