Business English 1

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ENGLESKI 1
1. Three sectors of the economy
2. Types of economies
3. Public Private sectors
4. Role of government
5. Nationalisation Privatisation
6. Company structure
7. Management
8. Management and cultural diversity
9. Recruitment
10. Labour relations
11. Presentations
12. Letter layout, Parts of letter
13. Giving good bad news
14. Requesting action, apologizing
15. Making complaints
16. Faxes, e-mail
17. Business finance
18. Production
19. Products
20. Marketing
21. Advertising
22. Promotional tools
23. Market structure and competition
24. Accounting and financial statements
25. Takeovers, mergers, buyouts, franchising

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ECONOMY
The relatioship between production, trade and the supplay of money in a country
or 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 economic
activity 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 hauses tipical informatic
GROSS NATIONAL PRODUCT GNP
- The total value of goods and services produced in a countrys economy,
including income from abroad in a year.
GROSS DOMESTIC PRODUCT GDP
- The total value of goods and services produced in a countrys economy,
not including income from abroad.

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FACTOR OF PRODUCTION OR INPUT

- Are resources used by the firms in their production process, namely land
and the natural resources in it, labour, capital and information (in recent
definition).
EXTERNALITIES OR 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 and
companies.
- Is the study of a part of the economy such as the operations of one
company 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 economic
theories and problems.
AGGREGATE DEMAND
- Is the total amount spent in a country by consumers, companies and the
government.
ENDOGENOUS
- Means coming from or controlled from within; e.g. variabled that are totally
under 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 government

taxes, 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 LIVING
- 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 spend
on 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 of
domestic 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 (company or business)
- When people can own capital and organize their businesses in any way
they like without being prevented by the government.
INPUTS
-

Ideas, advice, effort or money that you put into something to help it
succeed.

MARKET
- The activity of buying and selling goods or services or the value of the
goods or services sold.
MONETARISM
- The ides that an economy can be controlled by its central bank influencing
the money supply.
For example, the central bank can influence the amount of bank leading by
increasing or lowering interest rates.

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THE THREE SECTORS OF THE ECONOMY

EXTRACT izvui
- 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 SECTOR
includes the agriculture, and the extraction of raw materials from the earth.
- FARMING
- FISHING
- MINING
THE SECONDARY SECTOR
includes the manufacturing industry and construction, in which raw materials are
turned into finished products;
- MANUFACTURING
- CONSTRUCTION
THE TERTIARY SECTOR
includes the commercial services that help industry produce and distribute goods to
the final consumers such as:
1. COMMERCE (promet) - the buying and selling of goods and services
2. TRADE (trgovina) the activity of buying, selling or exchanging goods within a
country or between countries.
- HOME
o retail
o wholesale
- FOREIGN
o import
o export
3. SERVICE TO TRADE
- BANKING
- FINANCE
- INSURANCE
- TRANSPORT
- COMMUNICATION
o advertising
o telecommunications
o post
4. WELL AS ACTIVITIES such as:
( takoer I aktivnosti kao to su)
- EDUCATION
- HELTH CARE
- LEISURE
- TURISAM

Business English 1
PRIMARI PRODUCTIONS
digging iron ore
vaenje eljezne rude
mining coal
rudnici ugljena
pumping oil
naftne crpke

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SECONDARY
PRODUCTIONS
welding metal
varenje metala
milling metal
usitnjavanje metala
pressing metal
preanje metala
cutting metal
obrada metala
smelting iron
talionice eljeza
laying cables
izraivanje uadi
assembling
spajanje
packaging products
pakiranje proizvoda
building
graenje

TERTIARY INDUSTRIES
advertising products
proizvodi ograavanja
calculating prices
odreivanje cijena
distributing added value
distribucija dodatne koristi
marketing products
proizvodi marketinga
transportation
transport
maintenance
odravanje, servis

DEFINITIONS:
1. to convert itself to change from one thing to another
2. to serve needs to satisfy peoples desires or requirements
3. labour input manual work
4. to stumble on to discover something by accident
5. to be dubious to be uncertain, disbelieving

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ECONOMIC SISTEMS 1
All economies have to answer tree basic questions (fundamental problems):
WHAT should be produced;
for instance, what quantities of goods or services should be produces?
HOW should production be organised?
for instance, should machinery be used, how many workers should be
employed?
FOR WHOM should production take place?
for instance, should everybody be entitled to an identical share of
production or should some receive more than others?

Fore different economic 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 and
Unplanned 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 for
goods.

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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
FREE MARKET VERSUS COMMAND AND MIXED ECONOMIES:
There are no pure free-market economies nor pure command economies in the word
today.
-

The most importand free-market economy today is USA. In USA 75% of total
output is produced by the private sector and other 25% is produced by the
government.
e.i. an economy where 75% of the goods are provided by the private sector
woud be colled a free market economy.

The most planned economies of the world are for example USSR or Poland. In
there 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 between

state provision and free-market procision is more or less equal.

PUBLIC GOODS sach as defence or MERIT GOODS sach as education are

goods whose resources are allocated via a taxes and government spending
programme.
EFFICINECY the way of production when we are doing something well without
wasting time, money and energy.
- Aspects of efficiency are:
1. Distribution of resources:
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 National
Health Services there is far less choice.
Other aspect are:
3. Cost
4. Quality
5. Quantity of goods
6. Degree of which an economy is stable
7. Rate at which the economy grows
8. The degree to which the long-term interests of the economy are taken
into consideration.

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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. PUBLIC 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 and
o 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 and
3. 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 LIMITED COMPANIES

- The government also ownes shares and as such conform to the legal
requirements 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 and
o 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-day
running of the enterprise.

PRIVATE SECTORS ENTERPRISES

BUISNESS ORGANISATION an organisation established with the purpose of
producing 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 their
shareholding.
- 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 such
as shares, a piece of land, a building or a machine that cam be sold to pay a debt.
DEBTORS (dunik) person who owes money
CREDITORS (vjerovnik) person to whom one owes money
DEBENTURE (obveznica) certicificate given by a business corporation etc. as a
receipt 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 is
divided
- 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 dividend
is guaranteed before payment are made on others.
- EQUITY ordinary stocks and shares not bearing fixed interest.
GROSS PROFIT MAKGIN (mara) the difference between the price that a product
or service is sold for and the cost of producing it, without including overheads.
OVERHEADS (trokovi) a companys general costs for activities not related to
parcticular products.

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MERCHANT BANK (trgovaka, poslovna banka) a bank that deal with business
rather than the general public. They advise an and arrange finance for investment
and takeovers, and advise financial institutions on where to make investments.
BANKRUPT not having enough money to pay your debts.
BANKRUPTCY when someone is judged to be unable to pay their debts by a cort
of low, and their asseta are shared among the people and businesses that they owe
money to.
MORTAGAGE (hipoteka) legal arrangment where you borrow money from a
financial institution in order to buy land or a house, and you pay back the money over
a period of years. If you do not make your regular payments, the lender normally has
the 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 as
house 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 or
shareholders.
- They are commonly hound in professions such as: medicine, accountancy and
the 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 one
has to be formed by the remaining partners.
3. JOINT STOCK 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 LTD usually the smaller of the
two types. It can range from a small famioly business, with just few
shareholders, to much larger companies. The shares of the company
are 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,
- medium sized companies in manufacturing and relailing.

o A PUBLIC LIMITED COMPANY OR PLC usually the biggereof the

two types. The company must have 50.000 pound worth of capital
when it is formed and the shares must be freely available for purchase
by 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, buses
and teleconnunications) and srevices such as education, helth care, social
security (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. obvious evident,
2. inexpensive low cost,
3. inconsisten with or contrary to to be at use with
4. bad health illnis
5. remembered or not forgotten to be born in mind,
6. poor or unemployed people needy, underclass
7. rich or wealthy people overclass
8. successed achivements
9. unwillingly, not eagerly reluctant
10. global or worldwide planetary
11. costly expensive
12. disposed of spent, used of consumed,
13. on our behalf done for us
14. a physician a medical doctor
15. ailments (non-serious) illnesses
16. to resort to force to use violence,
17. to coerce to compel people to do something against their will
18. a mortician someone who arranges funerals
19. a plumber someone who fixes water pipes
20. a host of a large number of

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NATIONALISION AND PRIVATISATION

ECONOMIES OF SCALE the reduction in unit cost and increase in profit obtainer
when goods are produced in large quantities.
PRIVATISATION a change in the production of goods and services from the public
sector to the private sector. It often refers to the sale of government-owned firms to
private sector.
e.i. the transfer of government controlled company or industrs into private ownership.
- Advantages:
o competition lower 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 products DIVERSIFICATION.
NATIONALISATION the purshase of a private company by the public sector.
e.i. the process or result of bringing a comapany or different somapnies in the same
idnustry 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.
MONOPOLY a situation where a business activity is controlled by only one
company or by the government, and other companies do not compete with it.
NATURAL MONOPOLY an industry where there is only one produces because of
the nature of the activity.
A monopoly situation that arises because only one firm can fully exploit all the
economies of scale existing in the industry.
Electricity is on example of a natural monopoly, as it would not be very efficient to
have two companies supplying the same area, as this would result in two sets of
cables, pylons, transformers ets.
COMPETITION:
- choice,
- quality,
- price,
- inovation.
SOCIALLY RIGHT for the benefit of everybody in sociaty.

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COMPANY STRUCTURE
Basic words used in relaton to company organization with DEFINITIONS:
autonomus independent, able to take dicisions withaut consalting a
higher authority,
decentralization dividing an organization into decision making units that are not
centrally controlled,
function a specific activitiy in a company, e.g. production, marketing, finance.
hierarchy a system of authority with different levels, one above the other,
line authority the power to give instructions to people at the level below in the chain
of command
report to to be responsible to someone and to take instuctions from him or her
subordinates people 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 top
and 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 financial
decisions 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 their
departnent than that of the company and secondly, separating functions is
unlikely 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 efficient
one.
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 organization include:
- 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:
Chair Chair person (predsjedavatelj; Uprava)
Board of Directors with a Chairman GB
or President - US
Managing Director GB
Or
Chier Executive Offocer - US

Production

Marketing

DEPARTMENTS
Finance

Research and Human

Development Resources

SECTIONS
Production control
- scheduling
- materials control
Purchasing
Manufacturing
- tooling
- assembly
- fabrication

Sales

Financial Management
- capital requirements
Sales promotion - found control
- credit
Advertising
Accounting

Responsible
for
recruitment
and
personnel
matters
Charge of
training

Quality control
Engineering support

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Synonyms verbs who mean the same are:

1. consist of
- to be made up of,
- to be composed of,
- to divided into,
- to be included
2. immediate boss - superior
3. responsible to

- report to

4. line fo command chain of command

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COMPETITION AND COMMUNICATION

Competetion important:
- to maximaze productiviti,
- to maximaze crativity,
- to maximaze inovation,
- to maximaze welts.
- to account for to explain (objasniti)
- to full behind (zaostati)
- different industrial bells are situated on the outskrits
ETHOS way of thinking; the set of ideas, aims and moral attitudes belonging to she
- members of an organisation
- fierce competition
- aquired someone head 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?
MANAGEMENT the activity or shill of directing and controling the work of a
company 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.

MANAGER some one whose job is to manage all or parts of a company or

organization or a particular activity.
- they set objectives for their organization and then work out (decide) how to
achive 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 for
individual 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 the
needs 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 of

product 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. M1 SENIOR MANAGER:
the most important managers in an organization sach as company chairmen
and directors who sat objective and decide how their organization can achieve
them. This involves developing strategies, plans and precise tactics and
allocating resources of people and money.
7. M2 MIDDLE MANAGER:
managers between senior and junior managers, the person who run a
ogranization day to day.
8. M3 JUNIOR MANAGER:
managers at the lowest level.

ENTREPRENEURS are people who are alert to so-far undiscovered profit

opportunities.
- 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.
CREATIVITY producing (generating) new and original ideas and things.
Create do something
INNOVATION the the introduction and implementation (putting into practice) new
things.
Innovate to implemente
SET OBJECTIVES something 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 and
o 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 personal
relations, 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, the
Netherlands, Germany, Scandinavia are essentially individualist.
In such cultures, status has to be achieved and young, dinamic, aggressive
manager with an MBA (a Master in Business Administration degree) can
quickly 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 successfully
motivate salespeople. The more you sell, the more you get paid.

But the principle might (snaga, sila) well be resisted in more collectivist cultures, and
in countries where rewards and promotion are expected to come with age and
expirience.
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.
Glocalisation global companier in local environment. The idea that companis shuld
think globally, but use methods in each particular place that are suited to it.
Gross cultural management managing multinationals + glocalisation
VOCABULARY:
rationality the use of reasoning than emotions or belifs
intuition undesrstanding or knowing without consciously using reason
status respect, prestige or importance given to someone
seniority having a higer rank because one is older
ofended to have hurt feelings because someone is being disrespectful
reward money or something else given in recognition of good work

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bonus additional money given for better work or increased productivity

humiliation a feeling of shame and loss of diginity or self-esteem
to resigne to give up a job or position
etnical according to accepted moral standards

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RECRUITMENT
VOCABULARY:
applicant (natjecatelj, kandidat za posao) person who applies for the job.
application (zahtjev, molba za posao) making of a request, We made an
application to the court for an enquiry.
application form (obrazac za molbu) form to be filled in when applying for job.
apply (podnijeti molbu, natjecati se) to reply to an advertisement
candidate or applicant
Curriculum vitae or CV (GB) or resume (US) (kratak ivotopis) brief written
account of ones past history e.g. education, employment used when applying for a
job.
employment agencies (zavod za zapoljavanje) - business establichment which
helps person or companes to find a job or candicates for job.
interview (razgovor, intervju za posao) - meeting between employers and applicants
for formal consultation or examination.
Job description (opis posla)
job vacancies (potranja za poslom, oglasi) - many people read the job vacancies
when looking for work in newspapers or on the internet.
References (preporuka) statement about a persons character or abilities
Short listed (ui izbor)- sellected to attend an interview.
CURRICULUM VITAE or RESSUME parts:
Curriculum vitae
My name:
My address:
My phone numbers:
My e-mail address:
My date of birth:
Nationality: always begin with a capital letter: Franch, German, Japan
Marital status:
Objective:
Work experience or professional experience:
Education of qualification:

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Computer skills:
Languages:
Hobbies and interests:
Refferences or testimonials (US): minimun of two referees
The following people can provide references:
When employees GIVE NOTICE i.e. inform their employer that thay will be leaving
the company (as soon as their cintract allows), company carry out the foffowing
steps:
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 be
promoted (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 make
a preliminary selection (a short list)
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:
collective bargaining (zajedniki sporazum) negotiations between unions and
employers about their member wages and working conditionas.
a strike (trajk) a stoppage of work, as a protest against working conditions, low
pay and so on.
a go slow (GB) or slow down (US) a deliberate reduction in the rate of
production, as a protest.
working-to-rule debliberately obeying every regulation in an organization, which
severaly disrupts normal operation
industrial action a general term for strikes, go-slows, work-to-rules and so on.
to picket (trajkaka straa) to protest outside a factory or other workplace, and
try to persuade workers and delivery drivers not to enter.
Industrial relations:
- Workers in many industries are organized into unions which 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 work trade or skill.
- In other countries (France) unions are largely organized political because
employess workers or staff in different idustries join a union with a particular
political position.
- The function role of unions are:
o to attempt a ensure fair wages pay,
o reasonable working hours and safe working coditions for their
members,
o they take part in collective bargaining group negotiations with
employers,
o pursue with management the grievances - complaints of individual
employees ,
o defend workers who cosider that they have been victimized unfairly
trated,
o insist on the reinstatement of a worker who was unfairly sacked
dismissed,
- The most powerful weapon on union is to go on strike stop working.
- Workers on strike picket their place of work stand 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 relations are 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 work trade,
2. employees staff,
3. function role,
4. wages pay,
5. collective bargaining group negotiations,
6. grievances complaints,
7. victimized unfairly treated,
8. sached dismissed,
9. to go on strike stop working,
10. distegarded ignored,
11. adversary enemy,
12. uneconomic unprofitable

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.
People the most important resources and the most costly resources.
Conflicts between:
- the emplyer who wants to minimise his wage,
- the employee who wants to achieve the highest pay.
Industrial relations the relations between employees and employers or
management.
Trade unions associations of people who join together in their common interests to
regulate the relations between employees and employers.
- Workers pay a small subscription which the union uses to employ skilled
officials to act on the workers behalf.
- Employers have discussions and negotiations with a small number of people
rather than many.
Trade unions aims (ciljevi):
- 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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Collestive bargaining talks between representatives of employers and trade

unions to decide pay rates and other terms and conditions of employment.
Restrictive practises (methods or weapons used in on industrial dispute) are:
1. STRIKE:
A) official with union approval and backing the union provides strike pay
from funds coutributed by members,
B) unofficial or wildcat strike the workers cease work without union
backing,
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 relations:
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 to
unions:
- trade union is very important for working people (Germany, Japan strong
unions, USA bodly 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 machinery
o 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 company
for 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 redamption paying back.
-

from the money markets; firms can go to a financial centre and borrow money
from a wide variety of institutions sach as person funds and insurance
companies.
one form of such borrowing is debentures or loan stock a fixed interest
security issued by a company in return for a loan of money. The
cerificate can be sold ana resold if decired.
from the finance houses a bank that specalised in hire-purchase loans.
haire purchase a form of borrowing where the good being purchased is
the property of the lender up to the final payment, when it becomes to
property 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.
- equity the 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

1. their owner is the owner of the

company,
2. they enlarge the owners capital,
3. no paying back,
4. dividents

BOUNDS

1. they owner is not the owner of the

company,
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 + equity
liabilities = assets - equity
DIVIDEND a part of the profits of a company for a particular period of time that is
paid to shareholders for each share that they own.
STOCK MARKET a market wher company stares are traded
OVERDRAFT - to take out more money than you have in your account; paid with
income on the account.
LOAN a sum of money borroved from a bank; paid back with regular instalments

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PRODUCTS:
Definitions:
1. a product is 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 brand is a name (or sometimes a sign, symbol of design) used to identify
the goods or services of a particular manufacturer, seller or supplier, and to
differentiate them from the goods or services of competitiors.
3. a product line is a group of closely related products, wich usually have the
same function and are sold to the same customer groups through the same
outlets (prodajno mjesto).
4. a product mix is the set all the product lines and items offered by a
company.
5. convenience goods are cheap and simple low involvement products
which people use regularly and buy frequently with little effort, without
comparing alternatives.
6. speciality goods are durable goods with unique characteristics that
informed consumers have to go to a particular store to buy.
7. shooping goods are hight involvement products for which consumers
generally search for information, evaluate different models, and compare
prices, and take time to make a selection.
8. product elimination is the process of withdrawing products from the market
when they are no longer profitable.
9. Line filling means adding further items in that part of a product range which
a line already covers, in order to compete in competitors nichers, to utilize
excess production capacity, and so on.
10. line-stretching means lengthening a companys product line, either moving
up-market or down-market in order to reach new customers, to enter growing
or more profitable market segments, to react to cimpetitiors inituatives, and so
on.
11. credit facilities the possiblitiy of paying for a product over an extended
period.
12. guarantee a promise by a manufacturer or seller to repair or replace
defedtive goods during a certain period of time.
13. shelf a surface in a store on wich goods are displayed.

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14. brand switcher consumers who buy various competing products rather
than being loyal to a particular brand.
15. product line cycle the standard pattern of sales of a product over the
period that is marketed.
16. profitability the extent to which an activity provides financial gain.
17. opportunity possibilities of filling unsatisfied needs in sectors in wich the
company can produce goods or servicies effedtively.
18. market share the seles of a company expresed as a percentage of sales in
a given market
19. immage the set of beliefs that the public at large holds of an organization.
20. niche a small, specialized but profitable segment of a market.

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PRODUCTION:
Vocabulary:
1. subcontractor any 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 out buying products or processed materials
from other companies rather than manufacturing them,
4. capacity the (muximum) rate of output that can be achieved from a
production process,
5. plant the buldings, machines, equipment and other facilities used in the
production process
6. location the geographical situation of a factory or other facility.
7. inventory the stock of any item or resources used in an organizaion
(including raw materials, parts, supplies, work in process and finished
products),
8. lead time the time needed to perform an activity (i.e. to manufacture of
deliver something)
Operations 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.
Just-in-time (JIT) production:
- 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 MIX 4 Ps:
- Product, include: quality, features, style, brand name, size, packaging,
services and guarantee.
-

Price, includes things like: basic list price, discounts, payment period and
credit terms.

Promotion include: advertising, publicity, sales promotion and personal

selling.

and
- Place include 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 to
INFLUENCE the target market.
Vocabulary:
distribution channel all the companies or individuals involved in moving a
particular good or service from the producer to the consumer,
to lounch a product to introduce a new product onto the market,
market opportunities possibilities of filling unsatisfied needs in sectors in wich a
company can probitably produce goods or services,
market research collecting, analysing and reporting data relevent to a specific
marketing situation (such as a proposed new product).
market segmentation dividing a market into distinct groups of buyers who have
different requirements or buying habits,
packaging wrappers and containers in wich products are sold,
points of sale places where goods are sold to the public shops, stores, kiosks,
market stalls, etc.
product concept an idea for a new product, wich is tested with targer consumers
before the actuals product is developed,

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product features attributes or characteristics of a product: quality, price, reliability

etc.
sales representative someone who contacts existing and potential customers, and
tries to persuade them to buy goods or services,
a product manager or a brand manager pearson who looks for ways to increase
sales by changing the marketing mix.
selling concept assumes that resisting consumers have to be presuaded by
vigorous hard selling techniques to by non-essential goods or services.
Product are slod rather than bought on the contrary.
marketing concept assumes 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 anticipate a consumer need;
- develop a products or service that meets that needany cometing products or
services;
- persuade target customers to try the product ir servuce;and modify it.
- design particular features, attractive packaging and effective advertising, that
will influence consumers 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 or
service 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 target marketers have:
o identify conusmer needs and anticipate them by developing new
products;
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 consumers
needs 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, and
o the overall macro-economic environment.
- Aim of a market leader is to remain the leader and the best way to achieve this
is 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, or
o 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 or
o increase their market share by attacking various market followers.
- If they attack the leader, market challengers use stratergies also available to
market 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. product life cycle,
2. determining factors,
3. distibutions channel,
4. product line,
5. sales promotion,
6. economy scale.

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ADVERTISING:
- to advertise,
- advertiser,
- adverisement,
- advertising,
Vocabulary:
word-of-mouth free advertising, when satisfied customers recommend products to
their friends,
institutional advertising advertising that mentions a companys name but not
specific products,
advertising agencies companies that handle advertising for clients,
account a contract with a company to produce its advertising,
advertising budbet the amount of money a company plans to spend in developing
its adverising and buying media time of space,
brief the statement of objectives of an advertising campaign that a client works out
with an advertising agency,
advertising campaign the advertising of a particular product or service during a
particular period of time
target market a defined set of customers whose needs a company plans to satisfy,
media planners the people who choose where to advertise, in order to reach the
right customers,
threshold effect the fact that a certain amount of advertising in necessary to
attract a prospective customers attention,
CPM (Comparative parity method) choosing to spend the same amount on
advertising as ones competitors.
CCA (Counter-cyclicall advertising) advertising during periods or seasons when
sales are normally relatively poor.

How to be benefit from advertising?

- Firms benefit from advertising if increased sales and profits more than cover
the cost of carrying out the advertising but we also benefit as consumers and
citizens.
Advertising?
- 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 greater
efficiency and lower prices;
helps to raise the quantity and quality of goods produced so raising living
standards;
gives indirect benefits, such as: keeping down the cost of newspapers and
magazines, provicing commercial television and generally making our lives
more interesting;
creates jobs in the advertising industry itself and through greater sales in
general.

Corporate advertising:
1. company websites;
2. annal reports;
3. newspaper articles;
4. sponsorship of international or local sport and cultural events,
MEDIUM a way of communicating information and news to people.
THE MEDIA all the organisations, such as: television, radio, and the newspaper
that provide information for the publich.
MEDIA COVERAGE the ammount of time given to an event by the media.
AIDA attention
- interest
- desire
- action
SLOGAN a phrase used by advertisers;
- short;
- easy to remember;
- easy to repeat;
Media for advetising:
- making the product of service known to a wider andience
1. 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 account ugovor agencije i firme
OTS opportunities of see

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PROMOTIONAL TOOLS:
Standard promotional tools are;
1. advertising;
2. sales promotions;
3. public relations;
4. personal selling.
Advertising telling people publicly about a product or service in order to presuade
them to buy it.
Sales promotions an activity such as: special advertisements or free gifts intended
to sell a product or service.
Can be aimed at distributors, dealers, retailers, salles force, encouraging them to
increase 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 a
product.
Public 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.
Publicity any mention of a companys products that is not paid.
Is concerned with maintaining, improving or protecting the imageof a company or
product. The most important element of PR is publicity.
Personal selling is the most expensive promotional tool, and is generally only
used 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:
bookkeeping writing down the details of transactions (debits and credits);
accounting keeping financial records, redording income and expenditure, valuing
assets and liabilities, and so on;
managerial accounting preparing budgets and other financial reports necessary
for management;
cost accounting working out the unit costs of products, including materials, labour
and all other expenses;
tax accounting calculating an individuals or a compans liability for tax;
auditing inspection and evaluation of accounts by a second set of accountants;
crative accounting using all available accounting procedures and tricks to
disguise the true financial position of a company;
The most common terms in accounting
Vocabulary:
shareholders (GB) or stockholders (US) a companys owners;
earnings or income the revenues received by a company during a given period,
minus the cost of sales, operating expenses, and taxes
liabilities all the money that a company will have to pay to someone else in the
future, including taxes, debts, and interest and mortgage payments;
turnover the amount of business done by a company over a year
assets anything owned by a business (cash investments, buildings, machines, and
so on) that can be used to produce goods or pay liabilities.
deprectation (GB) or amortization (US) the reduction in value of a fixed asset
during the years it is in use (charged against profits)
debtors (GB) or accounts receivable (US) sums of money owed by customers for
goods or services purchased on credit
creditors (GB) or accounts payable (US) sums of money owed by suppliers for
purchases made on credit
stoch (GB) or inventory (US) the value of; raw materials, work in progress, and
finished products stored ready for sale
overheads (GB) or overhead (US) the various expenses of operating a business
that cannot be charged to any one product, process of department.

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ACCOUNT raun, korist, probitak, platiti ili srediti raune

Statement of money to be paid or received for goods, services.
BOOKKEEPING raunovodstvo kao sektor firme
The 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 bookkeeping
Bookkeepers record business transaction.
The work of keeping cheking accounts and analysing financial records in order to
supplay people with informations.
ACCOUNTANCY raunovodstvo kao znanstvena disciplina
Profession 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 statements in their annual reports:
1. the profit and loss account (GB) or income statement (US);
2. the balance sheet
3. 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 financial
year,
- the companys assets,
- the companys liabilities,
- shareholders funds.
Businesss assets consist of its cash investment and proparty debtors (amounts of
mones owed by customers for goods or services purchased on credit)
Liabilities consist 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 balance
sheet 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) or
The 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 shares a companys sales expressed as a percentage of the total market;
Promotion short term tactics designed to stimulate stronger sales of a product;
Monopoly the situation in wich there is only one seller of a product;
Competition companies offering similar goods or sevices to the same set of
customers;
Slogan a short and easily memorized phrase used in advertising;
Market segmentation the division of a market into submarkets according to the
needs or buying habits of different groups of potential customers;
Niche a small and specific market segment;
Differential advantage a factor which makes you superior to competitors in a
centain respect;
Turnover a businesss total sales revanue;
Recession a period during wich an economy is marking below its potential;
Perfect competition exists when products are homogeneous, and there are a
great many firms to small to have any influence on the market price, and firms can
easily enter and exist the industry;
A monopoly is a market in a particular product in which a single producer can fix
and artificial price;
Monopsony is the situation in which there is only one buyer;
Monopolistic competition exists when many producers of slightly differentialed
products are able to sell than at well above their marginal cost;
Natural monopoly is an industry in which the efficinets existence of more than one
producer is impossible; examples include public utilities such as water, gas and
electricity, where it would be inefficient to have several competing companies laying
their own networks of pipes of cables.
An oligopoly is a consentrated market dominated by a few large suppliers:
Economies of scale are factors which cause the average cost of producting
something to fall as output incerases;
Barriers to entry are economic or technical factors that make it difficult or
impossible for firms to enter a market or compete with existing suppliers;

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A dominant firm oligopoly is one in which a market leader can indicate its
preferred price to smaller competitors;
A cartel is a group of producers or sellers who fix prices and quantities in order to
avoid 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 diversify (diversification) to expand into new fields;
To merge (a merger) to unite, combine, amalgamate, intergate or join together;
A raid buying another companys shares on the stoch exchange, hoping to
persuade enough other shareholders to sell to take control of the company;
A takeover bid a public offer to a companys shareholders to buy their shares, at a
particular price during a particular period, so as to acquire a company;
Horizontal integration to merge with or take over other firms producing the same
type of goods or services;
Vertical integration joining with firms in other stages of the production or sale of a
product;
Backward integration a merger with or the acquisition of ones suppliers;
Forward integration a merger with or the acquisition of ones marketing outlets;
Synergy combined production that is greater than the sum of the separate parts;

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FRANCHISING
Franchise the right given by one business to another to sell goods or services using
its name.
Franchisee someone who is sold a franchise;
Franchisor a company that sells a franchise;
Franchies fee a fixed sum of money that franchisee pays to franchisor at the start of
pranchise agreement.
Franchise format a type of business which franchisor sells.
Management services fee franchise pays the fee to the franchisor.
Operations manues instructions about the business from the franchisor.
Master franchisee person which franchisee set up as a supervisor.
Advertising fee buyer of franchise pays for advertising to franchisor.

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