SECOND EDITION

Angela Dawson | Jan Dunne | Alek Kwiatkowski

Contributing Author
Jo Lamont
Second edition published 2012 by
John Wiley & Sons Australia, Ltd
42 McDougall Street, Milton, Qld 4064

First edition published 2007

Typeset in 11.5/13 pt Adobe Garamond LT

©  John Wiley & Sons Australia, Ltd 2007, 2010, 2012

The moral rights of the authors have been asserted.

ISBN: 978 1 118 34943 4 (pbk)

978 1 118 34940 3 (web)

Reproduction and communication for educational purposes

The Australian Copyright Act 1968 (the Act) allows a maximum of one
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Except as permitted under the Act (for example, a fair dealing for the
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Cover image: © nyul/iStockphoto

Cartography by MAPgraphics Pty Ltd, Brisbane, and the Wiley Art Studio

Illustrated by various artists and the Wiley Art Studio

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10 9 8 7 6 5 4 3 2 1
Contents
Introduction v
About eBookPLUS  vii
How to use this book  viii
Acknowledgements x
CHAPTER 1  M
 anaging a business  2
1.1 I have a business idea . . .  4
1.2 What is a business?  6
1.3 Establishing a business  10
1.4 Plan to succeed  12
1.5 Marketing a business  14
1.6 Setting up shop  16
1.7 Managing business finances  18
1.8 SkillBuilder: Preparing a cash budget 22
1.9 Human resources and business  24
Check and challenge 26
Thinking about … 28
ICT activities 30
CHAPTER 2  New wave economy  32
2.1 What is globalisation?  34
2.2 SkillBuilder: Interpreting grouped bar
graphs 36
2.3 Export markets  38
2.4 Imported products on trial  40
2.5 Foreign currency  42
2.6 Trade treaties and cooperation  44
2.7 Free trade agreements  46
2.8 Environmental sustainability of the fishing
industry 48
2.9 Made in China  50
2.10  The rise and rise of TNCs  52
2.11 TNC case study — the Nokia story  54
Check and challenge 56
Thinking about … 58
ICT activities 60
 CHAPTER 3  F inding the right career  62
3.1 School for life  64
3.2 What do you like?  66
3.3 Pathways in life  68
3.4 Sell yourself  70
3.5 Career.com 72
3.6 Applying for a job  74
3.7 SkillBuilder: Preparing for and participating in a
job interview 76
3.8 What is your body saying?  78
3.9 On the job  80
3.10 Rights and responsibilities  82
Check and challenge 84
Thinking about … 86
ICT activities 88
Glossary 90
Index 92

iv Contents
Introduction
To the student
Welcome to Humanities Alive Economics & Citizenship!
As the name suggests, this book brings the study of Economics, Civics and
Citizenship alive. The rich variety of information, photographs, diagrams and
activities have been specially chosen to help motivate you to learn more about
these disciplines. The book has been designed to develop your knowledge and
understanding of how economics works, preparing for the world of work and
what it means to be an active citizen. It has been written in a student-friendly way,
using lively and colourful visual images. To make it even more interesting, videos,
eLessons and interactivities have been provided in eBookPLUS.
Features of this book include:
• SkillBuilders, SkillBoosters and other learning activities to help you develop key
skills
• ‘Thinking about’ spreads at the end of each chapter to help you monitor and
reflect on your own learning
• ProjectsPLUS, which allows you to use ICT collaboratively and in a fun way
• many opportunities to share information, work cooperatively with others and
take on team responsibilities.

To the teacher
Humanities Alive Economics & Citizenship 10 Second Edition has been specifically
designed for Level 6 of Victorian Essential Learning Standards (VELS). Key features
include:
• a new chapter opener designed to engage students by making links between
the topic and their own lives
• additional videos, eLessons and interactivities accessed through eBookPLUS
• ‘Thinking about’ spreads that require students to reflect on and evaluate their
learning
• double-page SkillBuilders that explain, step by step, how to develop a key skill
• end-of-chapter ICT activities spreads that encourage students to work
collaboratively using ICT
• improved layout, with all figures clearly labelled and annotated for ease of use in
the classroom
• updated statistics and case studies.
In both the textbook and its supporting online resources, the focus is on
engaging young learners through accessible and relevant content, stimulating
activities and stunning visual appeal. This engagement is important in ensuring the
students remain focused and self-disciplined in learning situations — crucial if they
are to understand and adapt essential information and skills.

Introduction v
 Humanities Alive is structured around deep learning. It weaves together the
standards and learning foci associated with the Discipline-based Learning
domain of Humanities with those applicable to the other two learning strands,
Interdisciplinary Learning and Physical, Personal and Social Learning. Students
begin to appreciate that their learning has relevance beyond the classroom, for
both their community and the world at large.
The recognition of multiple intelligences provides opportunities for a multifaceted
learning approach to particular topics or themes; it also encourages students to
demonstrate achievement in areas that best suit their natural abilities and learning
styles.
Included in the eBookPLUS are student worksheets linked to each chapter of the
textbook. For each chapter there are general worksheets, and others that develop
students’ vocabulary, visual learning, specific skills, use of thinking tools, and ability
to summarise and reflect on their learning.
Teachers will find a wealth of follow-up material in the supporting text
Humanities Alive Economics & Citizenship 10 Second Edition eGuidePLUS. This
new resource surrounds each reproduced spread in the textbook with essential,
carefully targeted teacher support.
The teacher guide contains:
• teaching points that suggest approaches for teachers and broadly inform them
of content
• assessment suggestions
• links with topic areas in other disciplines, where applicable
• further worksheets, as well as cross-references to those in the student workbook
• suggested answers to all the questions raised in the activities panels
• answers to the student worksheets.

vi Introduction
About eBookPLUS

Next generation teaching and learning

This book features eBookPLUS:

an electronic version of the
entire textbook and supporting
multimedia resources. It is
available for you online at the
JacarandaPLUS website
(www.jacplus.com.au).

Using the JacarandaPLUS

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About eBookPLUS vii

 How to use this book
The features described
here show how you can
use this stimulating text
most effectively.
Essential ideas raise issues and
situations for students to think
about before beginning their
study of the topic.
Stimulus material links the topic
to students’ lives or to wider
social issues.
Evocative, confronting or
interesting images set the
scene for the topic.
Spread title and number
make identification and
cross-referencing easy.
All artwork, diagrams, photos
and sources are identified by a
figure or source number.
Engaging and informative
annotated illustrations interest
both visual and linguistic learners.
SkillBooster
SkillBoosters
outline and
reinforce key
skills, which
are then
tested in the
activities.
THINK
1 Refer to the mock Tapia advertisement opposite and the letter of
2 Find the errors in the following extract from a job application letter:
5_61_49431_HA 10 E&C 3.06.indd 75
viii How to use this book
Stunning
Managing
CHAPTER
1
double-page
a business chapter openers
engage student
interest.
Essential ideas
Essential links
There are many different types of businesses that affect the internet has changed our ideas about business
Business has been part of our lives
your life, from the building of your family home and car, and opened up new opportunities, especially in
for thousands of years. When tribal
to the food you eat, to the clothes you wear. Access to communication using mobile phones, iPods and eBay.
societies exchanged items so that each
party benefited, they were conducting
business. A business involves anything
that is traded, whether it is goods, A clearly
services or promises. Business may or
may not involve money, but there must defined
be an exchange of something of value
for both parties.
question is
There are many different types of
businesses that affect our lives.
The success of a business can be
posed for
measured in many ways. One of these
is by profit, which is easy to calculate students to
because it has a number value.
Other measures of business success
include customer satisfaction, benefit
explore during
to the community and impact on the
environment. their work on
Business has changed dramatically
over the past 50 years. The reason the chapter.
for this change is the development
of modern communications which
allows instant global trading by banks,
investors and anyone with access to a
telephone or the internet. 1 Name three items you have recently bought. Find Introductory
out which business produced these.
Most of the things that we see and use
every day have come to us through
2 Think about the use of mobile phones and the
internet in business. How have they changed the
THE ESSENTIAL QUESTION
questions
stimulate class
business. The Essential Question is: How does a
way business is carried out?
3 How do you learn about new products and
business start and what does a business
need to be successful?
Chadstone Shopping Centre businesses which are of interest to you?
discussion
Chapter 1: Managing a business 3
and individual
5_61_49431_HA 10 E&C 1.00.indd 2-3 13/03/12 11:57 AM
thinking and
opinion.
3.1 School for life
There are surprisingly few differences between attending school and working as a full-time employee. In
E Interpersonal skills involve the capacity
to communicate in a group and make known
your thoughts and ideas in a way that
promotes harmony. One of the most important
F Emotional intelligence
involves ‘people skills’.
It is the capacity to interpret
and act on other people’s
REMEMBER
1 (a) Define in your own words:
Student worksheet
3.1
aspects of work is being able to function feelings and emotions. time management skills,
fact, one of the main purposes behind formal education is to prepare you for life, so that when you leave the
effectively in a team environment. People who have a high level
of emotional intelligence can
self-management skills,
relatively sheltered environment of secondary school, you can take your place in the world as aware and resolve conflict and work emotional intelligence,
with people to ensure that volunteer, initiative.
confident young adults.
tasks are completed. Many (b) For each term, give an
organisations now rate example from your own
emotional intelligence as experience in which you
A Responsibility is an
being just as important as
important work and life skill. have, or potentially could
employment experience and
Dependable individuals have, demonstrated this
volunteer (i.e. choose), or academic qualifications.
quality.
Many spreads
are directed, to perform
a task and take on the D Time management THINK
responsibility to complete skills enable you to plan
it. Teachers or employers your day so that you are 2 Suggest why emotional
intelligence is so important in
are linked to
know that they can trust that always on time for your
person to carry out tasks lessons and have completed the classroom and workplace.
without further instructions. your homework.
SELF-DISCOVERY
worksheets
3 How would you rate yourself
according to the following
criteria?
• Organisational skills
• Time management
• Self-management
• Emotional intelligence
in the student
• Communication skills
• Initiative
• Responsibility
workbook and
B Self-management
involves the individual
in taking the initiative
• Work ethic
(a) Create a chart from the
criteria listed. Add four the teacher
to negotiate with others
when circumstances performance columns next
change or to ask
for extra help when
to the criteria column — very
high, high, medium and eGuide, both
necessary. low. Now assess your own
geared to VELS
performance.
(b) For each of the criteria that
you listed as high or very
high, give one example of a
C
standards and
Organisational skills include
always having the correct job for which you think the
materials to begin work. ability or personal quality
would be essential.
learning foci.
(c) Identify the areas on your
chart where you scored
medium or low. Explain how
each of these could be a
G Work ethic is developed by individuals
taking pride in the work at hand and working problem in the workplace.
hard to achieve goals. Employees with a good Think about how you could
work ethic usually require minimal supervision improve.
in the workplace.
emotional intelligence ‘people skills’ that help a person
to interpret other people’s feelings and needs (even without
being told of them) and act appropriately
initiative the first step or opening move in a series of actions
time management skills techniques and strategies
for planning, prioritising and scheduling tasks to increase
effectiveness
work ethic belief in the virtue of hard work
64 Humanities Alive Economics & Citizenship 10 Second Edition Chapter 3: Finding the right career 65
CHAPTER 10: Finding the right career
Writing a letter of application Worksheet 10.1
Your application letter is a very important document, as it will create a ‘first impression’ for a prospective
5_61_49431_HA 10 E&C 3.01.indd 64-65
employer. If it is well written, carefully edited and positive, it is much more likely to result in an interview. My skills audit 13/03/12 11:58 AM
Humanities Alive 4, 2nd edn: pages 310–11
Below are some points to remember when preparing a letter of application.
Student: ......................................................................................................................................................................................... Class: ....................................................................................................
Nick Ringtone
413 Eric Street
Key terms are defined in
MOTOROLAVILLE VIC 0411
1 8dbeaZiZi]ZiVWaZ#
Human Resources Manager a Lg^iZVYZÄc^i^dc[dgZVX]fjVa^in^ci]Zb^YYaZXdajbc#
TAPIA
b <^kZVcZmVbeaZ[gdbndjgdlcZmeZg^ZcXZ^cl]^X]ndj]VkZ!dgediZci^VaanXdjaY]VkZ!YZbdchigViZY
each double-page spread for
1800 Knock-Ear Street
MELBOURNE VIC 3000 i]ZfjVa^in#
10 June 2009 Keep the structure simple. The first
paragraph explains that you are
convenient student reference.
Quality Definition Example
Dear Sir/Madam applying for a particular position in
I am writing in response to your advertisement in The Age newspaper, dated 6 June 2009. response to an advertisement.
I would like to apply for the position of sales representative with the TAPIA Phone Company.
The second and third paragraphs Responsibility
I have been working in the mobile phone industry for two years as a salesperson. My current briefly indicate who you are
position is at Davidsson, where I am responsible for sales of its mobile phone range. My and what you do, and set out
specialisation is in the area of promotions for prepaid SIM cards, and I have been very happy the qualifications and skills you
with my sales figures. I always exceed my sales budget, as I have a very outgoing personality
that encourages people and businesses to buy from me.
I have an excellent sense of humour and can communicate with people from all walks of
have to offer (according to what
the employer wants). They may
also include the reasons you’re Student workbook worksheets
Time-management
skills
life. My sales of phones have been extensive in all suburbs of Melbourne, from Canterbury to interested in the position — your
are designed to deepen
Craigieburn, and I have extended my area to cover some country towns. commitment to the job can be
important in showing you are really
If I am appointed to the position of sales representative for your company, I would encourage motivated. Self-management
you to challenge me with a high sales target. I work well under pressure and constantly strive to skills
student understanding of
achieve my goals. Please find my résumé enclosed. The final paragraph must sign off
in a positive way.
Yours faithfully
Nick Ringtone If you begin with ‘Dear Sir/Madam,
topics raised in the chapter.
end with ‘Yours faithfully ’. If you Organisational
Nick Ringtone start with the person’s name, end skills
with ‘Yours sincerely ’.
Teacher eGuide worksheets Communication
skills
are designed to test the full
Student worksheet
3.5
COMMUNICATE
range of multiple intelligences.
Writing
W a letter of application Emotional
application reproduced above. 3 Using the guidelines listed intelligence
(a) What is good about Nick’s introduction? here, design a standard letter
(b) List the key pieces of information that the advertisement said of application for yourself. The
should be in the letter. information that needs to be
(c) Judge whether Nick covered the important information. Where is regularly changed is the date, the
the important information located? Work ethic
person your letter is addressed to,
(d) Identify the areas that Nick could improve on, and suggest and key information in the body of
improvements.
Graded activities test a range
the letter relevant to the particular
(e) Look at Nick’s attitude. What do you think of the way he has sold position.
himself? How might you change his wording? Why? Include this in a folder labelled 2 I]Z[daadl^c\VgZeZghdcVafjVa^i^Zhndjb^\]iÄcY^cV_dWVYkZgi^hZbZci#JchXgVbWaZi]ZaZiiZghidldg`
‘My Career’ (see page 69). djil]Vii]ZnVgZ#
In my current job I have the roll of desk support. My manger says I pay
attention to derail.
I have included my currickulum vitea for your information.
4 Produce a letter of application
for a job you have located in the
classified section of the newspaper,
of abilities and intelligences hidcZ]
WZVgaZa^
c^Z[[iZ^X
gV\ZYh^dc
across pertinent VELS
C U later, James Good or on a job search web page.
Chapter 3: Finding the right career 75
domains. © John Wiley & Sons Australia, Ltd 2010 Humanities Alive 4, 2nd edition, Student Workbook 119
13/03/12 12:00 PM
4_61_60751_HA4_2eSW_ch10.indd 119 15/12/09 1:51:55 PM
 3.7 SkillBuilder The interview
Developing my skills
1 Look at the four interview situations shown in the
Student worksheet
3.9

If you know what to expect in an interview, you are cartoons below. For each cartoon:
more likely to feel confident. The structure of an (a) Identify mistakes made by the job applicant.

In each chapter a key skill

interview generally follows this pattern: (b) Suggest what the applicant should have done in

Preparing for and participating in 1. Opening questions — easy questions to help you
relax
each case.

is defined and explained a job interview

2. Questions to obtain information about you,
including your strengths and qualities
3. Giving information about the position and the

in clear steps or a What is a job interview?

A job interview is a discussion between an employer
Getting an interview
In most cases employers will decide whether you will
organisation
4. Opportunity to ask your questions
5. Concluding discussion.

structured approach. and a job applicant. The job applicant may be

interviewed by one person or a panel. Most interviews
get an interview based on your letter of application and
your résumé.
are face to face. Where this is impracticable, the If the advertisement requires applicants to apply by
interview may take place over the phone or by telephone:
videoconference. • You should ring without delay. The employer may
stop taking calls after a certain number of people Tips for a succe
ssful interview
Why are job interviews useful? have applied.
• Make sure your
• Before you phone, have your résumé next to you for mobile phone is
The job interview process helps employers find the • Have your job turned off.
reference purposes, pen and paper, and your diary so folder with you. 2 Examine the following job advertisement. Work with
applicant (candidate) with the most suitable skills, • Maintain eye
you can make an appointment for an interview. contact and smile a partner to complete each of the activities below.
qualifications and personal qualities for the job. friendly, confide in a
• Introduce yourself and specify the position you nt way.
It also provides applicants with an opportunity to • Be aware of We are looking for two fun-loving, bright people who are customer-
would like to apply for. your body langua focused to join our casual staff team. We are a rapidly expanding
assess whether the job suits them. straight and upright
ge. Sit
• Speak clearly, watch your language, use whole words, .
retailer of electronic games. If you want to work in a busy rewarding
• Refer to the environment, we want to interview you.
not ‘dunno’ or ‘s’pose so’. interviewer by name
at least
• Be prepared to promote yourself. once during the
interview. (a) Discuss possible answers you could give in a job
• Avoid long, meand
ering responses
to
interview to the following questions. Write a brief
questions.
summary of your answers.

A wide range of support How to prepare for an interview STEP 4

At the end of the interview you may be given the opportunity
• Look for opport
unities to explain
skills and abilitie
• At the end of
s.
your
• Why do you want this job?
• Why do you want to work for this company? Opportunities
• What can you contribute to the company?
are offered to
Your aim is to convince the interviewer that you are the right the interview, thank

material helps students acquire

to ask questions. Prepare some questions in advance. It the
person for the job. Performing well in an interview requires
demonstrates that you are interested and enthusiastic.
interviewer. (b) Prepare a list of three other questions that an
preparation and practice. applicant could be asked. How would you answer
STEP 5 these questions?

these new skills.

STEP 1
Research the organisation. What products does it sell? What
services does it offer? Does the organisation have a website
Pay attention to your appearance and take steps to look your
best. Dirty nails and untidy hair may send a message that
you are lazy and unmotivated. Work out what clothes you
3 Practise your interview skills.
(a) Select a job advertisement from the newspaper
further practise
or the internet. Make preparatory notes for an
you can check out?

STEP 2
will wear. Make sure your clothes and shoes are clean. As a
general rule, when you go to an interview you should wear
clothes similar to those you would wear to the job.
interview. Think about strategies you will adopt
to make a good impression.
and develop the
Try to find out the duties or requirements for the job. Some

positions set out the duties in a written job description. Think
about what you have already done that relates to the duties of
the job. For instance, if the job requires you to work in a team,
skills students
(b) In groups of three, conduct interviews in which
STEP 6 two people interview the third person for the job
Decide how you will get to the interview location. This may
they selected in 3(a).
require looking up bus, train or tram timetables. Aim at

think about other teams you have participated in such as a
sporting team.
STEP 3
Practise your interview techniques with friends or family
members. Brainstorm the type of questions you may be
asked and work out possible answers. Answering questions
effectively will show the employer what is unique about you.
have learnt.
• Make arrangements with your teacher to wear
arriving approximately 10 minutes early. This will give you the
opportunity to observe the surroundings and relax.
appropriate clothing for the interviews.
• The interviewers should prepare for their roles
STEP 7 by listing relevant questions.
Check that your job folder is up-to-date. It should contain • If possible, videorecord the interviews for later
your résumé and any other relevant documents, such as a
analysis.
copy of your most recent school results.
(c) Use the tips for a successful interview on this
Do not be late for the interview or arrive at the last minute. page to assess the interview.

76 Humanities Alive Economics & Citizenship 10 Second Edition Chapter 3: Finding the right career 77

5_61_49431_HA 10 E&C 3.07 SB.indd 76-77 13/03/12 12:03 PM

Check
Checkand
andchallenge
challenge 8 Summarise, in three paragraphs, the key points for • somewhat suspect — the position sounds
Summarise,
8writing in three
application paragraphs, the key points for
letters. • somewhat
very vague,suspect
but the—money
the position soundsand
is excellent,
9 Inwriting
groupsapplication letters.the following questions
or pairs, answer very vague, but thegives
the advertisement moneynoisdetails
excellent, and
about
In groups
9about or pairs, answer
first impressions. Thinkthe about
following
yourquestions
initial the
the advertisement
job. gives no details about
1 (a) In a flowchart format, show a student’s 4 Give one example of each of the seven life skills about first impressions.
interactions with people Thinkwhen you about your
meet initial
them for the job.
(b) Select (from those collected) three interesting
(a) In a flprogression
owchart format, 4 Give
on one example
64–5. of each of the seven life skills
1education fromshow a student’s
primary school to listed pages interactions
the first time.with people when you meet them for
(b) Select (from those collected)
job advertisements three the
and complete interesting
table below
education progression from primary school to 5 listed on pages 64–5. job advertisements
university. Create a clever jingle (or similar) to help you the first time.
(a) What non-verbal factors do you take into as far as possible. and complete the table below
university. 5 Create a clever jingle (or similar) to help you (a) What non-verbal factors do you take into as far as possible.

Students
(b) Create another flowchart that shows how remember the key points when preparing a résumé. consideration when forming a first impression of (c) For one of the advertisements, prepare a list
(b) Create another flowchart that shows how remember the key points when preparing a résumé. consideration when forming a first impression of (c) For one of the advertisements, prepare a list
another student might choose an alternative path (pp. 70–1) someone? of questions to ask about the business over the
another student might choose an alternative path (pp. 70–1) someone? of questions to ask about the business over the
that could involve VCAL, TAFE, mature-age 6 Check out the various careers websites mentioned (b) Explain why these factors are important to you. telephone. Set out the page so that the responses
that could involve VCAL, TAFE, mature-age 6 Check out the various careers websites mentioned (b) Explain why these factors are important to you. telephone. Set out the page so that the responses
consider how
education, work, apprenticeship, volunteering or on page 72. Rate them in order of how helpful and (c) Do these factors change when the setting is can be completed next to the question.
education, work, apprenticeship, volunteering or on page 72. Rate them in order of how helpful and (c) Do these factors change when the setting is can be completed next to the question.
studying part time. (pp. 64–9) easyeasy
to use you found them, and justify your ranking.
to use you found them, and justify your ranking. school or work (compared with a social setting)? (d) Prepare a letter of application for your chosen
studying part time. (pp. 64–9) school or work (compared with a social setting)? (d) Prepare a letter of application for your chosen
2 What skills can you identify that are common to the 7 Read the information below about becoming a nurse.
7 Read the information below about becoming a nurse. 10 Prepare a roleplay with a group or partner that advertisement.
2 What skills can you identify that are common to the 10 Prepare a roleplay with a group or partner that advertisement.
following interest groups? (pp. 66–7)
following interest groups? (pp. 66–7)
(a) Outdoor/Practical
(a) Outdoor/Practical
(b) Artistic
and manual
and manual
and creative/Clerical and and
administrative
What
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are are
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describe three
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requirements
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ananinterview.
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body-language techniques
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Conduct
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chosen advertisement.
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withaapartner,
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for
they learn
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roleofoftrade
tradeunions
unionsin inthe
the workplace?
workplace?
(c) Helping
3 Suggest
and community
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3 Suggest
listedlisted
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for each
two careers
for activity 2. 2.
services/Medical
of the
for each
services/Medical
of interest groups
the interest groups
thatthat
(c) (c)
nurses
ListList
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need.
nurses
three
nurses.
need.
different degree
different courses
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1212Using
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edsection
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someadvertisements
advertisementsthat that are:
are:
• •clear
clearabout
aboutthetheposition,
position,thetherole
role of
of the
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typeofofperson
person that
that should
should
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nurse apply
• •very
veryvague
vagueabout
aboutthe thejob
job
• •persuasive
persuasiveand andclever
clever— —ananadvertisement
advertisement
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nurses successfully• the
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the ability bothboth
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eye-catching,and/or
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makes thethe
completed
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dealing patients’
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and have had their
and have name
had their name problems.
problems.
position
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placed on the
placed onRegister
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of Nurses. Registered
of Nurses. Registered Advertisement
Advertisement 11 Advertisement 22
Advertisement Advertisement3 3
Advertisement
Education
Education and and training
training
nurses are health-care
nurses are health-care

Check Challenge questions require

professionals
professionalswho whoassessassess To become
To become a registered
a registered nurse youyou
nurse willwill
need to pass
need to passyour VCEVCE
your

…how I learn
and and complete
complete a nursing
a nursing degree
degree at university.
at university. To be
To be accepted
accepted Dutiesofofthe
Duties thejob
job
the needs
the needs of patients,
of patients,
and provide
and provide preventative, into into
preventative, a nursing
a nursing degree
degree youyoumustmust
have have
goodgood results
results in English,
in English,
and rehabilitative and and
…what I have learnt
curative
curative and rehabilitative probably
probably good good results
results in ainscience
a science or maths
or maths subject.
subject. Locationofofthe
thebusiness
business

activities help students to apply and

Location
nursingnursing
care.care. SomeSome universities
universities maymay alsoalso
havehave
extraextra prerequisites,
prerequisites, so so
it isit is
worth looking at each university’s courses in more detail.
Nurses Nurses
workwork with with worth
closely
closely looking at each university’s courses in more detail.
1 Draw up the table below in your notebook and 2 Copy this sentence into your notebook and finish it
doctors and other medical Hoursofofwork
Hours work
doctors and other medical
decide how you best learn new things. Give yourself by selecting some of the thinking skills shown in the
students staff staff
extend their knowledge in a
Some nursing degrees
to improve
to improve the health Some
the health nursing degrees
workwork
of patients.
of patients. Nurses
Nurses
in hospitals,
in hospitals,
can can
aged- aged-
Australian
Australian Catholic
Catholic University
University (Ballarat
(Ballarat and and Melbourne)
Melbourne)
Bachelor of Nursing (three years full time or equivalent)
Salary/wageper
Salary/wage perhour
hour 1 Business ideas a ranking from highest (1) to lowest (5) for each item
on the table.
thought bubbles below.
In the future, I will use some thinking skills more often.
care care facilities, mobile health Bachelor of Nursing (three years full time or equivalent) Every business starts
test and new setting.
facilities, mobile health Deakin
Deakin University
University (Burwood,
(Burwood, Geelong
Geelong andand Warnambool)
Warnambool) Otherbenefi
benefi In this chapter, I think I have learnt best by: Rank
These thinking skills will include…
clinics,
clinics, community
community healthhealth
Bachelor of Nursing (Pre-registration) (three years Other tsts(e.g.
(e.g.car)
car) with an idea. Some
practices, prisons, schools Bachelor of Nursing (Pre-registration) (three years fullfull
timetime
practices, prisons, schools and and or equivalent) of the most successful • reading and analysing examples of different types
or equivalent)
rural rural
areas. areas.
La Trobe University (Albury–Wodonga, Bendigo and businesses have resulted of businesses

revise their
Qualifi cationsrequired
required
Nurses’Nurses’
hourshours will often
will often involve La Trobe University (Albury–Wodonga, Bendigo and
involve
Qualifications … being more analytical
Bundoora)
Bundoora) Bachelor
Bachelor of Nursing
of Nursing (three
(three years
years fullfull
time time
or or from the inspiration of an • discussing ideas about business with class
shiftwork.
shiftwork. They They
may may be required
be required to to when I read about
equivalent) members
work morning, afternoon and night
work morning, afternoon and night
equivalent)
Monash University (Gippsland and Peninsula) Bachelor of Experience required entrepreneur. businesses … being more aware
Monash University (Gippsland and Peninsula) Bachelor of Experience required
1 Who are the three • using the internet to locate information about

understanding
shifts, and will also work on weekends. of how businesses
shifts, and will also work on weekends. Nursing (three years full time or equivalent)
Nursing (three years full time or equivalent) setting up successful businesses
RMIT University (Bundoora, Sale and Hamilton) Bachelor of
RMIT University (Bundoora, Sale and Hamilton) Bachelor of How and where to apply most impressive … improving my understanding affect my life
Personal
Personal qualities
qualities Nursing (three years full time) How and where to apply
entrepreneurs you have • developing a business plan of my own of the record keeping which is
Nursing (three years full time)

A range of visual stimuli and

Nurses must have: University of Ballarat (Mount Helen and Horsham) Bachelor necessary in business

of key Nurses must have: University of Ballarat (Mount Helen and Horsham) Bachelor Closing application date
learnt about in this • looking at the photographs, illustrations and flow
• patience of Nursing (three years full time) diagrams showing how business systems work … being more confident
• patience
• excellent communication skills
of Nursing (three years full time)
Victoria University (St Albans) Bachelor of Nursing (three
Closing application date chapter? in my ability to plan
• excellent communication skills Victoriayears
University (Stor
Albans) Bachelor of Nursing (three … trying to recognise how
• a calm nature, able to handle emergencies full time equivalent) 2 Which personal skills • using the SkillBuilder to practise preparing a cash a business which

text is offered for students to

different types of

concepts
• a calm nature, able to handle emergencies years full time or equivalent) Further information budget
Further information were most necessary businesses operate
I could set up

for the success of these • answering review questions at the end of each
entrepreneurs? section spread

covered in the
84
84 Humanities Alive Economics & Citizenship 10 Second Edition
Humanities Alive Economics & Citizenship 10 Second Edition
reflect on what they have learnt Chapter 3: Finding the right career
The Macbook Pro, Chapter
iPod and 3:
MacFinding
mini the right career
all started
85
85ideas.
as business
• thinking about my own life and how business has
affected me
• another way (describe this in your own words)

chapter. 5_61_49431_HA 10 E&C 3.11 CC.indd 84-85

5_61_49431_HA 10 E&C 3.11 CC.indd 84-85 after completing the topic. 2 Strategies for success 13/03/12 12:04 PM
13/03/12 12:04 PM

A successful business needs to follow well-established

practices.
1 Identify four
strategies which
should be followed

ProjectsPLUS is a new research management

in setting up a
successful business.
2 Why is marketing Self-evaluation
system, featuring media, templates and video so important
and what does it
involve?
Think back over how much you have learnt about how
businesses operate and the effect of business on your
introductions to a unique ICT project. The project Training can develop the skills and productivity of staff
and bring greater staff satisfaction. BACK TO THE ESSENTIAL QUESTION
life. Complete the following table by placing a tick in
the correct column for each description.

is specifically designed to inspire and engage 3 Looking after staff in businesses The Essential Question is: How does a
business start and what does a business
Overall …
. . . I joined in class activities, especially
discussions and debates.
High Medium Low Needs improvement

students while providing quality assessment Human Resources Management has become a most
important part of successful business management.
1 Why is a good working environment important to
need to be successful? Make a list of what
you need to find out before starting a new
. . . I decided to take more interest in business,
now and in the future.

support for teachers.

. . . I developed an idea for a business.
the success of any business? business. Write a paragraph about how you
2 List some ways an effective human resources policy could evaluate the success of a business. . . . I think of myself as able to set up a business
when I leave school.
can help a business be successful.

28 Humanities Alive Economics & Citizenship 10 Second Edition Chapter 1: Managing a business 29

eBook plus
ICT activities 5_61_49431_HA 10 E&C 1.11 TA.indd 28-29 SUGGESTED
SOFTWARE
• ProjectsPLUS
• Microsoft Word
13/03/12 12:05 PM

PROCESS • After you have completed the

• Open your ProjectsPLUS application for this chapter,
located in your eBookPLUS. View your Project Brief, click
the ‘Start Project’ button and then set up your project
SWOT analysis, you will prepare
a report on your choice of candidate (minimum 1 page).
Make sure that your report includes the following points:
At the end of each Self-evaluation
The right person for the job
group. You can complete this project individually or invite
other members of your class to form a group. Save your
– a description of the Job role and of the type of
person that would best suit working in your company
– an overview of the other candidates
chapter, students activities
settings and the project will be launched.
SEARCHLIGHT ID: pro-0004

SCENARIO AND TASK

• Navigate to your Media Centre, watch the video
interviews of each candidate and read their résumés.
– an evaluative analysis of your choice of candidate
– reasons behind your choice.* revisit the Essential encourage
Question to evaluate students to reflect
Notes were taken at each interview regarding the * Remember that there are a number of
You are the HR (Human Resource) Manager for ‘Reality requested pay and working conditions, and are noted on anti-discrimination laws, so make sure
that your reasons do not discriminate
Gaming’. Reality Gaming is a company that specialises the bottom of each résumé. against the other candidates.

how their study of on their learning

in the development of 3-D video games. The business is • Use your Research Forum to enter your feedback on each
growing rapidly and, because of this growth, it is expanding of the candidates. The information that you enter should
the Digital Content Department. This department be presented as for and against arguments. If working

the topic has affected to improve their

specialises in the creation of 3-D characters and worlds. in a group, you can rate and comment on each other’s
You have posted an advertisement in all the major articles.
newspapers and employment internet sites. In order to • Open the ‘Candidate Assessment’ template in your

their understanding learning practices

attract the best in the business, you have offered flexible Media Centre. Analyse and evaluate each candidate
working conditions. You must select the best candidate for ‘Reality Gaming’ by completing a SWOT analysis for each one. A SWOT
Four potential candidates have been short-listed for the and provide a report to the Directors explaining the reasons analysis is an evaluative tool utilised to assess the

or opinions. in the future.

job. You have been supplied with the video interviews of
these candidates, their résumés and the details of the pay
and working conditions they have requested.
why you chose this person over the others. Remember to ‘Strengths, Weaknesses, Opportunities and Threats’ of a
consider how the working conditions requested by each particular situation.
candidate will impact on the real cost of their employment. In this exercise, the SWOT analysis will give you a
framework that will enable you to compare and contrast the
four different candidates.

Your ProjectsPLUS application is available in this

chapter’s Student Resources tab inside your eBookPLUS.
Visit www.jacplus.com.au to locate your digital resources.
The ICT activities spread is a guide to the
interactivities, eLessons, learning objects
MEDIA CENTRE
Your Media Centre contains:
• video interviews with the
four short-listed candidates
and ProjectsPLUS projects that have been
specifically designed to support the content
• résumés from the four
candidates
• a ‘Candidate Assessment’
template.

of each chapter. These engaging digital

Your Project Brief includes a
video lesson presented by an
HR Manager.

88 Chapter 3: Finding the right career 89 resources are provided within eBookPLUS,
5_61_49431_HA 10 E&C 3.13 ICT.indd 88-89 13/03/12 12:06 PM
which is located at www.jacplus.com.au.

How to use this book ix

 The authors and publisher would like to thank the
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 Managing
CHAPTER

1 a business
Essential ideas
Business has been part of our lives
for thousands of years. When tribal
societies exchanged items so that each
party benefited, they were conducting
business. A business involves anything
that is traded, whether it is goods,
services or promises. Business may or
may not involve money, but there must
be an exchange of something of value
for both parties.
There are many different types of
businesses that affect our lives.
The success of a business can be
measured in many ways. One of these
is by profit, which is easy to calculate
because it has a number value.
Other measures of business success
include customer satisfaction, benefit
to the community and impact on the
environment.
Business has changed dramatically
over the past 50 years. The reason
for this change is the development
of modern communications which
allows instant global trading by banks,
investors and anyone with access to a
telephone or the internet.
Most of the things that we see and use
every day have come to us through
business.

Chadstone Shopping Centre

Essential links
There are many different types of businesses that affect the internet has changed our ideas about business
your life, from the building of your family home and car, and opened up new opportunities, especially in
to the food you eat, to the clothes you wear. Access to communication using mobile phones, iPods and eBay.

1 Name three items you have recently bought. Find

out which business produced these.
THE ESSENTIAL QUESTION
2 Think about the use of mobile phones and the
internet in business. How have they changed the
The Essential Question is: How does a
way business is carried out?
business start and what does a business
3 How do you learn about new products and need to be successful?
businesses which are of interest to you?

Chapter 1: Managing a business 3

 1.1 I have a business idea . . . Every new business starts with an idea. Many of these ideas are
figure 1
original and highly creative — resulting in innovative business ventures.
People who develop such ideas are called entrepreneurs. For them,
the challenge is in creating and implementing the business venture;
once it is ‘up and running’ they will often move on to a new challenge.
Entrepreneurs tend to be risk takers; they have to be, because usually
they explore untapped markets with no track record of proven consumer
demand or guaranteed returns. But for those whose ideas translate into
Well-known entrepreneurs: a successful business venture, the profits are often huge.
Sir Richard Branson, Poppy King,
Mossimo Giannulli
figure 2
So what is an entrepreneur anyway? Are there any existing or
How will the set-up of the
An entrepreneur is someone like you. likely competitors, and what will
business be financed?
Entrepreneurs: Is this a ‘niche market’ I do to keep a competitive
• have great ideas and do something area, and what are the edge over them?
about them opportunities and risks?
• hunt for opportunities to promote their How will the business and its Are there any
ideas products/services be promoted legal issues or
• thrive on the challenge of creating their and advertised? government/council
own big breaks
regulations that need
• make money out of solving problems
to be observed?
and selling their ideas
• usually start up their own businesses. Who is my target market?
How old do you have to be?
Any age! If you have a great idea and the How will the
determination to make it happen, you products/services be
What product or service
could join this list of young entrepreneurs distributed (e.g. online,
who enjoy some huge success stories… am I offering, and why is
it special or different? counter service,
• Eagle Boys Pizza was created by a home delivery)?
23 year old from Albury, NSW.
• Dick Smith Electronics was launched by
Dick Smith when he was 24 years old. Where will I locate What will be the price
• Subway sandwiches were the brainchild the business to structure for the
of 17-year-old US-based Fred DeLuca. maximise profit? products/services
• Rip Curl, an Australian company, was offered?
started up in the Australian backyard of
surfers Brian Singer and Doug Warbrick.
• Dell Computers was set up when
18-year-old Michael Dell realised it was
a lot cheaper to build computers than to
buy them ready made. Typical questions considered
• Poppy King founded Poppy Industries
Pty Ltd at aged 18, after recognising by an entrepreneur in making
there was a gap in the market for matte a business idea happen
lipstick.

figure 3
2000
1970

1980

1990

1971 1978 1983 1990 Present

Oil crisis changes reliance
on oil as a major source
of power, with a move
towards gas and nuclear
technology.
Numerically The personal computer Technology has an Improved technologies mean
controlled is more widely used in all impact on production a rapid increase in the
machinery is businesses and homes. processes in smaller knowledge base, greater
used in larger businesses, reducing sharing of ideas, shorter
businesses, e.g. costs and making product life cycles and more
simple robotics. them more competitive. use of flexible approaches,
e.g. use of the internet.

Timeline showing the impact of technology on business

4 Humanities Alive Economics & Citizenship 10 Second Edition

Entrepreneurs help to stimulate the
economy with their innovations
(new ideas, products and services).
Their new business ventures may
fill a gap in the existing market or
find a new niche market which
provides for the needs, wants and
demands of consumers. This in
turn boosts consumer spending and
employment opportunities.
The rapid increase in the use of
technology in business has simplified
systems, and e-commerce has reduced
barriers to the global market. It
has had a dramatic impact on the
storage and transfer of information,
efficiency, cost effectiveness,
marketing and, therefore, profits.
figure 4
Steve Jobs, founder
of Apple, invented
the Mac, iPod and
iTunes, and started
the company
Pixar which made
Toy Story and
other computer-
animated movies.
Business legend — Janine Allis,
founder and CEO of Boost Juice
2001: Opened first Boost Juice (Adelaide)
2002: $1 million annual turnover
2008: 213 stores and on track for
$100 million annual turnover
Highest grossing company stores: Sydney
and Melbourne airports
Highest grossing company franchisees:
Chadstone and Pacific Fair Shopping Centres
Reason for Boost Juice success
Janine and her husband Jeff had a great
product at the right time.
‘In shopping centres, there was nowhere
to get something healthy,’ says Janine. ‘On
a trip to the United States, I studied the
business  a person or organisation
that produces goods or buys and
sells goods in order to make a
profit
consumer  a person who purchases
goods and services to satisfy needs
and wants
economy  a system of production,
distribution and consumption of goods
and services
concept of smoothies and juice and took
what I liked to develop a new concept in
Australia called Boost.’ Opening in Adelaide
gave the company the opportunity to trial
and test and grow quickly.
‘We knew that a popular radio station
could reach our target market. We had low
rents and no one had even heard of juice
bars, so it was a great time to test that
market. I never had the intention of opening
just one store, but you have to open the
first one to work out the cost of goods, your
wages, expenses and income and work out
if you have a viable business.’ The key to
expansion was strong branding — to attract
customers and the best franchisees.
For the first two years of Boost, Janine
Allis worked from home trying to maintain a
work/life balance with school-age children.
‘ When the time came to expand with a
building program on 15–18 sites, we sold
the house and put the money into the
business. We’re a company where you don’t
necessarily have to wear a suit or have a
degree to be promoted and you can bring
your children in when you have them. It’s the
sort of company where you can have both.’
entrepreneur  a manager of a business
who sometimes takes business risks in
order to produce and make a profit
niche market  a market in which a
limited and clearly defined range of
products is sold to a specific group
profit  excess of revenues (money
received) over outlays (money spent)
target market  a market that a
product is deliberately aimed at

REMEMBER
1 In what ways do the ideas of entrepreneurs benefit an (b) Do you think these businesses will be
Student worksheet 
economy? successful? Justify your view. 1.1

THINK
2 What sort of personality and qualities do you think a
successful entrepreneur is likely to have? Suggest why
these might be needed.
3 What sort of research and preparation do you think an
entrepreneur should undertake before starting a new
business venture?
4 Read the article above carefully and then answer the
following questions:
(a) Why is Janine Allis an entrepreneur? Has she been
successful so far? Explain.
(b) What has been Janine’s strategy for implementing
her business idea?
(c) How has Janine promoted her products?
(d) If you were Janine’s business adviser, what are three
tips you would give her for continued business
success? Discuss these with a partner.
5 Use the Business Ideas Winners weblink in your
eBookPLUS to answer the questions below:
(a) How did each of the winning entrepreneurs in 2005
come up with new ideas?
SELF-DISCOVERY
6 Do you think you’ve ‘got what it takes’ to be an
entrepreneur? Explain, drawing attention to what you
see as your strengths and weaknesses for such a career.
DESIGN AND CREATIVITY
7 In small groups, come up with an original business
idea. Through discussion, develop a marketing strategy
for your business product and/or service. You will need
to consider how it will be promoted (e.g. advertising
and publicity), distributed (e.g. online or shopfront)
and priced (e.g. interest-free loans or ‘cheaper than
all competitors’ promises). Present your marketing
concept to the class using a PowerPoint display.
Negotiate the task each group member will perform.
ICT
8 Use a search engine to locate information about three
young Australian entrepreneurs. Write a brief summary
of the business idea which led to their success and
report back to the class.

Chapter 1: Managing a business 5

 1.2 What is a business?
Businesses are key players in the economy. They provide people with employment, and create goods and
services for consumers (like us), enabling us to satisfy our needs and wants.

A business is any organisation that produces and sells, What are the main types of
for a profit, the goods and services that satisfy the
needs and wants of consumers. Your local butcher is businesses?
a business, as is the supermarket you shop in and the There are four main types of businesses: sole trader,
local video store. partnership, public company and private company.
Some organisations operate in order to provide These are described below.
social, educational, religious or other services rather
than to earn a profit. The Salvation Army and World
Vision are examples. Such ‘businesses’ are called non-
profit organisations. Sole trader
There are many different types of business, all
designed to suit the particular needs of the people who
establish them. These include sole traders, partnerships,
and public and private companies. Businesses have
different structures and legal responsibilities and it is
important to understand the differences, for example,
between a limited liability company and a private
enterprise operation.

A partnership is a business usually owned and

operated by two or more people, called partners.
The partners share their profits and losses, usually
equally. Together they decide how best to operate
the business. It is common for people with similar
skills, such as doctors, accountants, solicitors and A sole trader is a business that is
dentists, to form a partnership. Partnerships tend owned by one person, even though it
to have the names of the partners in the business may employ other people to operate
name. Partnerships have unlimited liability. and manage the business. It is the
most common type of business in
Partnership Australia. A sole trader business can
operate in almost any field. Usually,
however, they are stores, cafes,
newsagents and hairdressers as
well as trades such as plumbers and
electricians.
  The sole trader receives all the profit
and suffers all the losses. He or she
has unlimited liability. This means he
or she can be forced to sell personal
assets such as the house or car to
pay off business debts. A sole trader
usually has only one person’s name
in its business name, for example
Maria’s Cafe.

6 Humanities Alive Economics & Citizenship 10 Second Edition

 In Australia, all companies undergo a process known
as incorporation. This involves creating a business
as a legal entity in its own right and treating it as a
separate entity from its shareholders. In other words,
the company (rather than individual shareholders) is
liable for the debts created through its operation. There
are two major forms of companies in Australia: public
companies and private companies.
Public company
A public company can have an unlimited number of
shareholders. The general public may buy and sell
shares in these companies. This is done through the
stock exchange. Most public companies are large
and attract investment quickly. Examples include
Westfield, Billabong and Woolworths. Shareholders in
public companies have limited liability.
  A public company must have the word ‘Limited’,
abbreviated to ‘Ltd’, after its name.
  Public companies can have an unlimited number
of shareholders. There is no restriction on transfer of
shares between people or the amount of money that
can be raised through offering shares. A prospectus
is issued when selling shares. The minimum
requirement (under the law) is that it have three
directors, two of whom must live in Australia. A public
company is also required to publish an annual report
that clearly states its financial position.
Proprietary (private) company
A proprietary (private) company usually has
between two and 50 private owners called
shareholders. These businesses tend to be small
to medium in size. Often they are family-owned.
Shares in private companies are offered only to
those people the business wants as part-owners.
Shareholders can sell their shares only to people
who have been approved by the owners. This is
why it is called a ‘private’ company.
  A private company must have the words
‘Proprietary Limited’, abbreviated to ‘Pty Ltd’,
after its name. They are not listed on the stock
exchange. The main advantage of a private
company is that shareholders have limited
liability. This means that if the business cannot
pay its debts, a shareholder loses only the
money she or he has invested in the business.
  So a shareholder cannot be forced to sell
personal assets to pay the company’s debts.
However, there are some exceptions to this
situation. In some instances, the directors of
the company will be asked to give a personal
guarantee when financial institutions are giving
loans. In these cases, the person who offered the
personal guarantee might lose their own assets
to pay the debts of the business.
  If company directors engage in misleading
behaviour or recklessly borrow money, they can
be held personally responsible. Criminal charges
may follow, with lawsuits being brought under
the code of civil law.
Chapter 1: Managing a business 7
 Other types of businesses
Franchises
In recent times, franchising has also become a very
popular form of business structure. A franchisor is the
individual or organisation that grants the franchise, and
the franchisee is the person who purchases the franchise.
Most franchisees then operate their business either as a
sole trader or in partnership with another person.
The benefit to the franchisee is that he/she is granted
an instantly recognisable business name (e.g. Subway,
Hungry Jack’s) and can immediately start to draw
on the goodwill of that business. The franchisee also
receives training in the technical aspects of operating
the business from the franchisor, as well as assistance
with business management principles. In return, the
franchisee provides the start‑up fees and labour, and
agrees to uphold the terms and conditions of the
franchise agreement. This means, for example, that a
franchisee is obliged to market and sell the products
and/or services specified under the franchise agreement
and conform with any required production and
distribution processes and requirements.
Just as there are many advantages for businesses
operating as franchises, there are also disadvantages for
both the franchisee and franchisor.
Operating a business as a franchise limits the
autonomy of an individual franchisee in relation to
figure 1
8 Humanities Alive Economics & Citizenship 10 Second Edition
marketing. For example, when you enter a McDonald’s
Restaurant, the décor looks the same, the staff act,
sound and look the same, and the food tastes the same
as in any other McDonald’s anywhere in Australia.
Operating a franchise limits the owner’s ability to
innovate and individualise their stores.
All advertising and promotional campaigns are
run from a centralised office and must be run in all
franchise stores in exactly the same way. An owner
of a franchise may not agree with a particular TV
commercial or a Scratch and Win promotion, but they
must do what the franchisor tells them.
The responsibility is on the operator/franchisee to
follow all of the strict guidelines set by the franchisor or
they may be reprimanded, receive a fine or even lose the
rights to their business.
Cooperatives
Another form of business is the cooperative, in which
a number of people combine for a particular purpose.
Typical cooperatives involve farmers, community
education centres and credit unions.
The benefit of a cooperative is that people who work
in one industry can join together to manage their own
affairs, drawing on their combined expert knowledge of
the specialist aspects of their work. They also reduce costs
by streamlining their operations to ensure maximum
efficiency in the delivery of goods and services.
Some franchise operations in Australia
include Aussie Pooch Mobile, a dog-washing
business, and Jim’s Mowing, one of several
divisions of Jim’s Group, which provides
home services.
 Student worksheet 
There are many different types of cooperatives used 1.2

for a wide range of purposes, including cooperatives for

housing, building, consumers, workers and credit unions. Remember
Retailers’ cooperatives buy in bulk on behalf of their  1 Define in your own words:
members to obtain discounts from manufacturers and (a) proprietary company
(b) limited liability
to pool marketing. This type of cooperative is common (c) public company.
for locally owned grocery stores, hardware stores and  2 What are the main differences between a private
pharmacies. However, their members are businesses and a public company?
rather than individuals. An example of a retailers’ co-  3 Write the following words in a sentence to show
op is the Best Western international hotel chain whose you understand their meaning:
members are hotel operators (see figure 2). The members (a) incorporation
own and operate their own businesses but work together (b) goodwill
and pool funds and resources through Best Western, (c) franchisee
(d) franchisor
which operates as a non-profit organisation. Pooled funds (e) cooperative.
are used to advertise their businesses and the Best Western
brand, and to generate greater buying power. think
 4 Why do you think the law requires that at least two
figure 2 directors of Australian public companies live in
Australia?
 5 Outline the main advantages and disadvantages
in establishing a business through a franchise
agreement.
 6 What are the benefits to farmers of joining a
cooperative?
 7 Most farms are registered as businesses. Why would
this be so?
 8 Under what circumstances will the directors of a
company be personally liable for the company’s
debts in the event of a collapse?
COMMUNICATE
 9 Copy the table below into your notebook and
rearrange so that the correct term is next to the
The Best Western hotel chain is an example of a retailers’ correct example. Use the information on
cooperative. pages 6–9 to help you.
Cooperative A small bicycle shop which offers
asset  an item or a resource of value
personal and professional advice
autonomy  independence or freedom
cooperative  a jointly owned commercial enterprise formed Public company A suburban hairdresser
when a number of people in the same industry combine to Franchise A national retail chain that would
produce goods and services require $600 million to establish
credit union  a financial institution, often linked to an
industry, that manages funds and acts as a lender; it is not a Sole trader A medical clinic
bank Private company A community book exchange
goods  merchandise, commodities for sale or trade; items
that you can see or touch Partnership A fast food outlet
limited liability  shareholders cannot lose more than their
investment in the event of the failure of the business Ict
prospectus  an official document issued by a company that 10 Work in groups for this activity. Choose a business
explains the company structure and invites investment from that interests you — it may be a local, national
the public or international business. Use specialised search
services  work done by one individual or business and sold techniques to find out as much as you can about
to another, such as an accountant or plumber (generally
it on the internet and through other means. Share
intangible goods of economic value); actions done for you
by others your findings with your group.
shares  units of ownership in a company. An investor may • What type of business is it, and how is it
purchase a great many, or only a few, of these units. As the structured?
value of a company’s shares goes up or down, so too does • What are some of the business’s key products/
the value of the shareholder’s investment. services?
stock exchange  a market where stocks, bonds and other • What else about this business is of particular
securities are bought and sold interest?

Chapter 1: Managing a business 9

 1.3 Establishing a business
Owning and operating your own small business can be rewarding and satisfying, but there are many pitfalls to
watch out for. About half of all small businesses fail within the first four years. The success of a small business
depends largely on the owner’s market awareness, resources, initiative and level of management expertise.

Although there is an infinite variety of businesses and business ideas, there are some golden rules that must be
obeyed if the business is to have any real chance of success beyond the first 12 months.
Business knowledge
• You must have clear realistic goals for the business. That is, how much
revenue does the business need to make to ensure that it can continue
operating?
• Obtain accurate and up-to-date information to establish and run your
business. For example, you may need advice from an accountant on
profit and loss statements, and sales and inventory reports.
• Respond quickly and effectively to events that could have a major effect
on your business — for example, the new smoke-free laws or a disease
affecting agriculture.
Market awareness
• Define your target market and choose
the right product and location to give
your business the best chance of success.
• Learn as much as you can about your
competitors and the ideas that they use
to attract customers.
Hands-on management
• Employ the right mix of people for the
business. Ensure that there are creative
people as well as people who are good
with logic and facts. Hire reliable staff
with a strong work ethic.
• Train your staff. A multiskilled workforce is
generally more efficient and happier than one in
which people are stuck in the same roles.
• Motivate your employees and provide them with
incentives if they perform above expectations. Improved
career prospects, a pay rise, bonus or ‘employee of the
month’ award is always welcome.
Ensuring sufficient capital
• Research the best available business loans and ensure that
repayments can be met in the first year.
• Ensure that you have sufficient cash flow to pay your bills,
including rent, power, stock, tax and employment costs.
• Keep accurate tax records and, if necessary, report to
shareholders.
Customer service
• Make customer service a key aspect of your business. If you
do not provide your customers with great service, they will
soon find someone else who will.

10 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 
1.3

Two friends, Jake and Ashley, established their small business, GameZone, in 2006. They
didn’t have much money of their own and the banks were reluctant to lend them the sum
they needed to set up business. They decided to borrow from a finance company although Remember
they charged a higher rate of interest. Still, they had their money. 1 Define the following words:
  Their next problem was the location. Rents were very high in the local shopping centre. (a) business
They opted for a disused shop in a local street. Next door was an abandoned warehouse,
(b) incentives
and on the other side was the Pensioner World shop.
  On the opening day, the stock had arrived and games were piled high on the shelves. (c) multiskilled
One customer found a copy of Mario under a pile of Halo games and walked to the (d) cash flow.
counter.
  ‘I’ll take this thanks. And I understand that you’re giving away free copies of Gran think
Turismo if I buy Call of Duty,’ said the customer. ‘Dunno about that,’ said Mez, the shop 2 Look carefully at the GameZone
assistant. Jake emerged from the back office and stubbed out a cigarette on the illustration and case study.
counter. He told the customer that although this was meant to be a (a) How did Jake and Ashley
promotional offer, the shipment of PlayStations hadn’t arrived
in time. ‘Well then, can I have you hold a copy for me?’
raise the money to start the
asked the customer. business?
  ‘Maybe, but until our internet is fixed, nothing’s (b) What evidence is there that
happening. Sorry,’ replied Jake. Jake and Ashley did not
  ‘No, you’re the one that will be sorry,’ cried the spend enough time carefully
customer. ‘I’m reporting you to Consumer Affairs locating their business for its
for misleading advertising. Sorry, guys.
target market?
Game over!’
(c) What stock problems do
you think GameZone might
face? How might this affect
GameZone in action its performance?
— how not to play (d) What special marketing
the business game! plans are in place in the
illustration of the store? How
successful do you think they
will be for the business?
(e) Give three examples of
poor customer service at
GameZone.
(f) The business has not
enjoyed the start the owners
wanted. If they called you
in as a manager, what steps
would you take to improve
operations? Explain.
design and creativity
3 Your task is to prepare a
poster, leaflet or web page that
informs employers of the keys
to establishing a successful
business. The information
should be visually attractive
and well designed, as well as
providing details of successful
business planning.

cash flow  the amount of cash coming in and

out of a business in a given period of time
incentives  encouragement or motivation
for employees to work more effectively and
efficiently, given in the form of pay rises,
bonuses or awards
inventory  the stock of items available for sale
multiskilled  the ability to perform a variety
of tasks within the same organisation

Chapter 1: Managing a business 11

 1.4 Plan to succeed
Starting a new business from scratch involves much time and effort. You will need to commit money to the
business and you will most likely need to borrow finance. Running a business places your reputation and
personal finances on the line; therefore, it is vital that you plan to succeed.

Starting a new business from scratch has its advantages.
You have more control and freedom over key decisions.
You can decide the name of the business, where the
business will be located and what goods or services the
business will offer. Starting from scratch also means
you can avoid paying for goodwill.
Starting a business from scratch also has its
disadvantages. Too many new businesses survive for
only a brief period of time. About half of all small
businesses fail within a few years of starting up.
Business failures cause personal pain, loss of income,
bankruptcies and unemployment.
The single largest contributor to business
failure is financial mismanagement. It accounts for
around a third of all businesses that fail. Financial
mismanagement covers a range of issues: insufficient
business experience, cash flow problems, insufficient
funds, overreliance on personal savings or credit, failing
to properly budget or plan for taxation liabilities.
However, being aware of possible problems can help
you maximise your chance of ongoing success.
concept or idea before their reputation and finances are
placed at risk. It helps in the setting of realistic goals
and objectives, and makes it easier to map out the
necessary steps that lead to success. A business plan also
assists in recognising opportunities as well as potential
pitfalls. The plan acts as a blueprint for charting the
overall direction of the business and as a daily guide
for everyone involved in the business. The benefits of
preparing a business plan are illustrated at right.
What should a business plan include?
Because there are many different types of small
businesses, not all business plans look exactly the same.
The typical elements included in a business plan are:
• Executive summary: A short summary that provides
an overview of the business. Crucial information
is identified, such as goals and objectives, possible

Reasons new businesses fail

• Financial mismanagement
• Poor management skills
• Poor record keeping
• Sales and marketing problems
• Failing to get advice
• The state of the economy

Why plan?
Planning to succeed is very important, yet many
individuals skip this stage. Being your own boss may
seem attractive; indeed, it can be very rewarding, but
it is important to identify the risks and understand the
market before you enter your chosen industry.
Planning is the process of deciding business goals
and objectives, and how you intend to achieve them.
It should be done before you commence your business
and on a continual basis —that is, regular review of the
plan is advisable.

Business plan
A written business plan helps prospective owner– Careful planning is essential if you are to succeed in starting
managers to evaluate the soundness of their business a new business from scratch.

12 Humanities Alive Economics & Citizenship 10 Second Edition

 Requires you to
assess your idea
carefully before
spending money
Provides relevant Helps you to
information to become better
back up your loan informed about the
application potential market
Benefits of
writing a business
plan
Establishes the Helps you to clarify
resources you your goals and
will require objectives
Assists you to identify
the opportunities,
challenges and issues
that may arise
timelines, and the goods or services the business
will produce. It is best to do the overview when the
remainder of the plan is completed.
• Marketing plan: An analysis of the market including
market trends, the target market, extent of consumer
demand and how the business will fit into the
existing market. The proposed marketing strategy —
advertising, marketing, public relations, trade shows
— is also identified.
• Operations plan: An action plan identifying the
processes involved in establishing and running the
business. It identifies what resources are needed to
set up the business, including human resources and
physical resources.
• Financial plan: A record that identifies sources of
finance, cost estimates to cover wages and salaries,
premises and equipment, insurance and legal fees,
financial projections, adequate cash flow to cover costs
including during the very early stages of the business
when little revenue is being received, loans including
security or collateral, and the role of a financial adviser.
Case study — Fast food
Luke Bayliss and James Miller realised there was a gap in the
market after noticing there was a lack of healthy, affordable
fast food outlets. They opened the first Sumo Salad store
in Sydney in 2003. Raising finance to start the business
was difficult given their young age, but persistence paid
off. Within three months the store had queues of around
50 people. Part of the business plan was to open in busy
shopping centres that are open seven days per week. Sumo
Salads expanded quickly with the first franchise opening
in 2004. The strategy for the next five years is to further
expand the number of outlets by 85 per cent.
REMEMBER
 1 Define the following terms:
(a) business plan
(b) business plan overview
(c) business management
(d) staff management
(e) financial mismanagement.
 2 Identify the benefits of starting a new business from
scratch.
 3 Discuss the main reasons small businesses fail.
 4 What is the purpose of doing a business plan?
 5 Identify the main benefits of preparing a business
plan.
 6 What are the main elements a business plan should
address?
THINK
 7 Select two small businesses and try to identify:
(a) their goals and objectives
(b) the state of their industry and who their main
competitors are
(c) difficulties they may have encountered — both
expected and unexpected.
 8 Business Victoria recommends that business plans
should be prepared:
– in short, concise sentences
– with key points listed in bullet or point form.
What benefits do you see in this recommendation?
 9 Read the case study on this page. What challenges
do you think Sumo Salad may face because of
climate change and economic downturn? Explain.
SELF-DISCOVERY
10 Interview a small business operator. Attempt to
establish the following information about their
industry:
(a) required managerial skills and qualities
(b) required employee skills and qualifications
(c) market trends and information
(d) suitable premises and equipment
(e) advertising and marketing needs
(f) particular challenges and difficulties.
DESIGN AND CREATIVITY
11 Consider the following guide to writing a business
plan. Prepare a business plan for an industry of your
choice. Use the Small Business Victoria weblink in
your eBookPLUS.
  Imagine you are planning to start a business. How
would you plan to succeed in this venture?
bankruptcy  legal process that declares that a person
or a business cannot pay their debts. Bankruptcy may be
voluntary or ordered by a court.
collateral  assets (money or property) used as a guarantee
that a borrower will repay their loan. The assets may be
forfeited if the loan is not paid.
goodwill  money paid to purchase the reputation of an
existing business
Chapter 1: Managing a business 13
 1.5 Marketing a business
Marketing is more than selling a product. It is the whole process of providing goods and services to satisfy the
needs and wants of consumers at the right place and time, using the right promotions. A catchy definition of
marketing is ‘the right product, in the right place, at the right time, at the right price’ — sometimes called the
4Ps, as shown below.
figure 1

Sometimes marketing is called the 4Ps strategy —

Product, Price, Place, Promotion.
Successful marketing needs to involve the following
elements:
• research — gathering information from potential
customers about their wants and needs
• publicity — providing information about the new
product or service
• promotions — assisting the launch of products and
services (e.g. events)
• advertising — promoting new behaviours (e.g. anti-
litter, Quit campaign, road safety programs)
• evaluation — finding out the success of the product
or campaign.
The following extract is a set of guidelines for
marketing a new product written by successful
entrepreneur Janine Allis.
Marketing is not necessarily selling something for a profit.
You can run a marketing campaign for a free concert, cake
Advice from Janine for all
business people: stall or sausage sizzle, for example.
1 Surround yourself with people
who have done it before because figure 2
you will save on mistakes and
every mistake costs money.
2 Put a promise to the brand.
3 Question whether your company
name tells people what you do.
4 Your company name should be
something you are passionate
about.
5 Your brand should crystallise your message.
6 Clearly identify and promote to your target market. Changing a
brand name is costly and can bring angst and heartache.
7 Take what you’ve got but update it to reflect growth and
expansion.

Target markets
Entrepreneurs aim their product at target markets.
These market segments may be determined by age,
gender, income, occupation, education or geographical
location. Marketing analysts break down target markets
further to show how the types of products and brands
purchased reflect the personality and lifestyle of the
user (psychographic segmentation). Through market
research such as surveys and telephone marketing,
information about products and users is gathered.
Feedback may reveal information about brand loyalty, The Muzz Buzz website is an example of marketing that
or how memorable a brand or advertisement is. promotes a product.

14 Humanities Alive Economics & Citizenship 10 Second Edition


Promoting new behaviour
Governments use advertising campaigns to change behaviour.
$53m campaign to
tackle binge drinking
10 March 2008
[Former Prime Minister] Kevin Rudd
has announced a $53 million program as
an initial attempt to put a cap on binge
drinking among young Australians.
The program will contain a range
of methods to tackle the problem
in partnership with community
and sporting clubs in particular   .  
.  
. and support to assist to turn those young
Mr Rudd said a survey had shown
168  000 Australians between 12 and 17
had reported binge drinking or drinking
at risky levels.
The campaign would have three
parts — codes of conduct, stronger
powers for authorities and a national
advertising program.
‘A $14.4 million investment in
community initiatives (will) confront the
culture of binge drinking, particularly
in sporting organisations…’ Mr Rudd
said, ‘[by assisting them to develop]
local codes of conduct in relation to
binge drinking.’
The second part would confront the
question of personal responsibility with
$19.1 million to support innovative early
intervention and diversion programs for
people under the age of 18.
‘That is, where young people are
found binge drinking, to provide funding
people around,’ Mr Rudd said.
‘The possible initiatives there range
from anything from requiring young
people to participate in educational
and/or diversionary activities, or even
to allow the authorities to confiscate
alcohol and to provide formal
warnings.’.  .  .
The third part of the national
binge drinking strategy is $20 million
funding over two years for a hard-
hitting television, radio and internet
campaign that confronts young people
with the costs and consequences of
binge drinking.
Excerpts from The Australian,
10 March 2008, © AAP
Former Prime
Minister Kevin
Rudd speaking
during a press
conference
in Canberra,
10 March 2008,
where he
announced a
national strategy
to tackle binge
drinking among
young Australians
Student worksheet 
1.4
Remember
1 Define the following terms:
(a) market research
(b) marketing campaign
(c) demographics.
2 What is Muzz Buzz marketing?
3 Give three examples of
marketing that does not sell a
product for profit.
think
4 In your opinion, what is the
most important message in
Janine Allis’s 7-point marketing
guide? Give reasons for your
answer.
5 Read the article ‘$53m
campaign to tackle binge
drinking’.
(a) What are the three parts of
the campaign?
(b) What is the target group for
this campaign?
(c) Why are the sporting clubs
being included in this
campaign?
(d) What is the stated purpose
of the ‘hard hitting
television, radio and internet
campaign’?
ICT
6 Examine the Muzz Buzz website
on the opposite page. At which
market segment do you think
this image is aimed? Give
reasons for your answer.
7 Use a search engine to look at
the marketing style used by
Muzz Buzz. Make a list of the
most outstanding characteristics
of the marketing that is used.
demographics  variables by which
people can be grouped for the
purpose of marketing campaigns,
e.g. age, sex, income, occupation,
education, geographical location
market research  surveying the
market to determine the views of
consumers and their lifestyle choices
market segment  a section of a
market
Chapter 1: Managing a business 15
 1.6 Setting up shop
Choosing the right location allows your business to have the best exposure to customers or access for workers
and suppliers. If you are a retailer, attention needs to be paid to the internal layout and design of the shop, to
make shopping a pleasant experience for your customers and a profitable one for you.
Choosing a location
Locating a place for your retail
business on a major road and
providing good parking and public
transport for customers is ideal.
This allows drive-by advertising:
potential customers see your shop
every day and think, ‘I really must
look in there one day.’ When that day
comes, you’ll have a customer who is
eager to see what you have to offer.
The same applies in shopping
centres. Retailers pay higher rents
to have a shop in a major shopping
centre rather than in a quieter
shopping precinct. Businesses in
major shopping centres attract
more casual shoppers (also known
as foot traffic) and, therefore,
have a much higher ‘strike rate’ in
achieving sales.
The location must also match the
product to the customers. It is little
use locating a snow-ski hire shop
in Alice Springs or a surf shop in
a retirement village. Matching the
customers to the product also relates
to spending patterns. For example,
you would expect to find more
BMW dealerships in suburbs where
more wealthy people live.
If your business involves only the
manufacturing of goods rather than
retailing, you should find a location
that allows good access to suppliers,
power, transport and workers. For
example, the production of ethanol
(used in petrol) needs to be located
near sugar cane and water as it
needs large amounts of both these
inputs. The cost of transport would
be very high if the business was too
far from these resources.
In choosing the location of a
business, it is also important to
consider whether the site allows for
expansion in the future to avoid the
expense of relocating at a later date.
16 Humanities Alive Economics & Citizenship 10 Second Edition
Attracting shoppers
Clever businesspeople give careful
thought to the types of shoppers
they want to attract. Research shows
that people generally fall into the
following categories:
• Destination traffic. Shoppers
who enter the store knowing
exactly what they intend to buy.
They avoid other customers,
generally do not seek assistance
and (surprisingly) have been
found to move in a clockwise
direction! It has been said that
adult males in major shopping
centres are generally found in this
category. They know exactly what
they want (a pair of shoes, a suit,
some perfume as a gift) and move
purposefully in and out of the store.
• Browsing traffic. These shoppers
are uncertain about their
purchase and move slowly
through the store, stopping
frequently to examine items,
often seeking assistance. They
usually move in an anticlockwise
direction and turn to the right
when they enter the store. This
category typically fits more
females than males. Females tend
to be more patient and view
shopping as a social activity.
• Impulse buyers. Purchases by
impulse buyers are unplanned
and spontaneous. The purchases
may be items such as lollies,
Boutique layout
This style creates mini-shopping areas
within a major store and is often found
in stores like David Jones and Myer.
A boutique layout has small specialty
areas that have only one particular type
of merchandise such as sporting goods
or books. People move through each
section of the store; if the individual
areas are laid out in a unique way,
it can create the illusion of moving
through a number of different retailers.
magazines or a DVD and are
thrown into a shopping trolley
while queuing for service. Both
males and females are prone to
impulse buying. A significant
amount of shopping involves
spontaneous decisions made
by customers. Therefore,
good internal shop layout and
aesthetically pleasing displays are
very important.
Getting the layout right
The layout of the shop is very
important because you need to
make your goods attractive, while
also encouraging people to make
purchases that they may not have
considered before entering the store.
Destination buyers can also make
impulse decisions. For example, a
person runs into a supermarket to
purchase milk and bread and, at the
register, quickly takes some chocolate
and a magazine that were placed
adjacent to the EFTPOS machine.
Shopping centre management
will play a role in locating shops
within their centre. For example,
jewellery stores are usually found
on corners, and food shops are close
together away from clothing stores.
Kiosks for information, food and
drinks, and temporary stalls are
located or moved around in relation
to the shopper traffic flows of a
particular centre.
 Student worksheet 
1.5
Grid layout
This is found most often in supermarkets, and is designed to ensure
that customers cover a large part of the store, even if they wish REMEMBER
to purchase only a few items. Have you ever noticed that the milk 1 Define the following terms:
and bread are usually at the back of the store? If there are items
(a) retail outlet
on special, such as nappies, biscuits or shampoo, they are located
on major displays at the ends of aisles to attract impulse buyers (b) impulse buying
queuing for the checkout. (c) foot traffic
(d) destination traffic.
Necessities placed at rear encourage
2 List the important things to consider when planning
customers to shop the whole store.
the location of a manufacturing plant.
Meats Dairy products Frozen goods
think
Delicatessen

Tinned, bottled lines

Fresh fruit, vegetables

3 Make a list of the benefits of being located on a main
Drinks, juices

Frozen lines

Household lines
Cooking needs

road for (a) fast food outlets and (b) retail outlets.
Varied

Varied
Cereals

Why is the provision of parking and transport so

important to these businesses?
4 Why do supermarkets place basic items such as
Bread

bread and milk at the back of stores? Do you think

that this type of store layout is fair and reasonable?
Checkouts, Discuss.
Snack items impulse goods Health lines 5 What is the difference between browsing traffic and
Impulse items placed at front impulse buying? Which would generate the most
attract browsing customers. income for:
(a) a supermarket?
(b) a store with an open-plan layout such as Target?
Give reasons for your answer.
Open-plan layout
An open-plan layout is more relaxed than a grid layout and design and creativity
follows a more haphazard design. Good examples of such shops
are Kmart and Target. This design encourages customers to 6 Working in groups of four, think of a business that
wander around the store and not hurry through it, as you might in you would like to operate one day, and then come
a supermarket. up with:
(a) a brand name and logo
(b) a web page
(c) a shop-layout design, assuming that you are
involved in retail
(d) a location for your business. Give reasons for your
choice.
Present your design package to the class, using ICT
tools.
7 (a) Draw a map of the shopping centre which you
often visit. Label and colour the types/names of
the shops.
(b) Look at the pattern of the shops in the shopping
centre you have drawn. How are they arranged
(e.g. by function, size, proximity to other shops or
exit doors or other reasons)? Rule up a table and
record your findings under relevant headings.
(c) Imagine that you are the new manager of this
shopping centre. Write a report to the Board of
Directors giving your assessment of the present
arrangement of shops and making suggestions as
to how it could be improved in the future.

drive-by advertising  advertising which consumers can ict

view while driving their car, e.g. billboards 8 Use a suitable ICT drawing program to design a shop
impulse buyers  people who make unplanned, layout that you think would be best suited for a surf
spontaneous purchases wear shop. Justify your design to a partner.
manufacturing  making goods using manual labour or
machinery
rent  a regular payment made by a tenant to the landlord
or owner for the use of a building
retailer  a business which sells goods to consumers

Chapter 1: Managing a business 17

 1.7 Managing business
finances
While developing a great business strategy, creating a clever marketing campaign and employing the right
mix of people are all important, the financial side of the business cannot be discounted. In fact, businesses
can break the law if they do not properly prepare financial documents. Also, many small businesses collapse
because they do not have a solid financial plan.

Businesses use the double-entry system of accounting
to keep accurate records of receipts and payments made.
This means that for every entry there is another made
to balance the account. This usually involves an entry in
a debit account (listing items) and an entry in the credit
account (listing parties to whom you owe money).
Every payment made and all the money received
must be recorded. This statement is compared later
with the bank records of the business transactions
for the month. Keeping accurate financial records is
a crucial part of any business. You will quickly lose
control of your business operations if you don’t do so.

SkillBooster
Keeping accurate journals
To maintain accurate records of the flow of cash into and out of a business, it is important to keep cash receipts
journals and cash payments journals. The following sample entries for Baker & Hall’s Funky Music store show
how such journals are prepared.
Cash receipts journal • The ‘Debtors’ column relates to payments made by those who owe
money to the business. In this case, Georgie’s Music (the debtor) owed
A cash receipts journal records the details of all those who $1500 and paid his account.
have paid money to the business during that month. • The ‘Cash sales’ column is for sales made, for example, as over-the-
Baker & Hall’s Funky Music — Cash receipts journal counter transactions. In this case, a keyboard was sold for $1000.
• The ‘Other revenue’ and ‘Sundries’ columns
Receipt Cash Other
are for money received through other
Date Details no. Debtors sales revenue Sundries Bank
means such as the sale of assets, payment
10/7/09 Georgie’s 6231 $1  500 $1  500 of commission or hire fees for equipment,
Music or injection of capital from the owner.
Sales 6232 $1  000 $1  000 • When money is banked at the end of the
day, the amount must be recorded in the
TOTAL $14  000 $21  000 $1  900 $2  100 $39  000 ‘Bank’ column so that the business can
keep track of its cash movements. The
Cash payments journal co-owner of Funky Music, Benny B. Baker,
banked the money that day.
A cash payments journal allows a business to keep
track of the money that has been spent by the business
during the period.
Baker & Hall’s Funky Music — Cash payments journal
Cheque Cash Loan
Date Details no. Creditors purchases Wages Rent repayment Sundries Bank
10/7/09 AML Ltd 5490 $1  600 $1  600
10/7/09 Rent 5491 $1  000 $1  000

TOTAL $8  000 $7  400 $10  600 $1  000 $6  500 $3  500 $37  000

• Payments made to creditors (those to whom the business owes money) are listed in the ‘Creditors’ column. The creditor in this
case is AML Ltd.
• It is vital that entries in the ‘Cheque no.’ column can be cross-referenced to the cheque butts held by the business. Each
cheque entry will also be recorded in the ‘Bank’ column.
• The ‘Sundries’ column relates to items such as the purchase of an asset or withdrawal of petty cash from the business.

18 Humanities Alive Economics & Citizenship 10 Second Edition

figure 1
Cheque butt Name of bank Person or business Date
Cheque number kept by holder of issuing cheque being paid (or their cheque
cheque account account representative) issued
Date cheque
made out

Who cheque
paid to Amount
Goods or being
services paid in
paid for numbers
and words

Amount
of money Signature
remaining of person
in account making out
after cheque cheque
account owner
has made Cheque
deposits or Perforations to Holder of These words can be hand-written or stamped and are described as number
given cheques allow cheque to cheque ‘crossing a cheque’. It means that no-one but the person or business
as payment be torn out account named on the cheque can cash it. (Proof of identity will be required.)

Parts of a cheque and cheque butt

Maintaining liquidity Recording cash transactions

Once the cash payments and cash receipts journals In order to manage your . . . . .
. . . . .
. .
PETROLWAY .
have been compared for a given period, the business accounts, receipts must always WELCOME TO BL
UETOWN PETROL
can see whether it is performing at a profit or loss. be issued for any transaction. ABN : 00000000
000
WAY

The following statement would be derived from For example, if a business TA X INV OICE

more detailed versions of journals kept as shown on issues a receipt to a customer Customer copy
the opposite page. for money paid for products * Pump : 2 Unleaded petrol $22.80
sold, the business files a copy TOTAL for 1 items
$22.80
Baker & Hall’s Funky Music of the receipt as a record that THANKYOU FOR
VISITING BLUETO
Statement of receipts and payments payment was made. This file PETROLWAY
WN
July 2009 copy is proof, for tax purposes, CASH 30/3/09
IER :
Cash receipts $ $ that income was received. . . . . .
. . . . .
565656
. . .
Debtors 14  000 The person receiving the
goods from the business can use the receipt as proof
Cash sales 21  000
of payment for tax-deduction purposes. The customer
Sale of assets   2  100 will need to produce the receipt if requested by the
Other revenue   1  900 Australian Taxation Office.
  Total receipts 39  000 Although electronic funds transfer is now used to a
significant degree, businesses still rely on cash in
Cash payments
their daily dealings with
Creditors   8  000 customers and suppliers. figure 2
Cash purchases   7  400 It is important to
Wages 10  600 note that cheques are
Rent 1  000
also considered to be
cash. When writing a
Sundries   3  500
cheque (see above), the
Loan repayment   6  500 completion of a cheque
  Total payments 37  000 butt is very important
Excess of cash receipts over cash payments   2  000 because this is relied
on later for your record
Bank balance as at 1 July 2009   6  800
keeping (in terms of
Total bank balance as at 31 July 2009   8  800 your expenditure for Receipts record the details of
the month). a transaction.

Chapter 1: Managing a business 19

 Bank statements
As the manager of a business,
you must be fully aware of your
organisation’s cash flow at all times
because this will greatly affect its
liquidity. Appropriate decisions
regarding staffing, loans and price
setting will depend on successfully
managing your cash control.
Each week, month or quarter
(three months) the company
compares its bank statements
(see SkillBooster below) against
its internal records (e.g. journals)
of receipts and expenditures
(payments) (see page 18). Both These have to be accounted for in
should be the same. However, there what is called a bank reconciliation
are often differences (discrepancies). statement (see below).
Bank reconciliation statement for July 2009 — Griffiths & Freeman Marketing
Balance on bank statement $600 CR
Add deposits not recorded 1200 CR
$1800 CR
Less unpresented cheques $200 (chq no. 117)
Balance as per bank account $1600 CR
The purpose of the bank reconciliation statement is to take the bank record of the
account balance at the end of the month and to add the deposits not recorded and
subtract the unpresented cheques. The bank reconciliation statement for Griffiths &
Freeman Marketing (see SkillBooster below) may look as shown above.

SkillBooster
The main reasons for possible
Reading a bank statement discrepancies are as follows:
Look carefully at the sample bank statement below and then • The bank may not have ‘cleared’ cheques
read the notes that help explain some of its features. paid into the company’s account. It
usually takes three working days for a
Federal Bank of Australia
cheque to be cleared (that is, approved
Streamline Account
for processing).
Griffiths & Freeman Marketing Statement 20 (Page 1 of 1)
• Some cheques paid to the company may
10 Alma Terrace, Ferntree Gully, Vic 3156 Statement begins: 1 July 2009
Branch: Newport Statement ends: 31 July 2009 have ‘bounced’, which means that the
Bank, State & Branch number Closing balance: $600 CR person who wrote the cheque did not have
  (BSB): 08 8765 Enquiries: 1313562 enough funds in his/her cheque account
Account no.: 08 8765 4567 23 (8:00 am to 8:00 pm) to cover it.
Transaction details Debit Credit Balance • The company may have written cheques
01 July Opening balance $4000 CR to its suppliers and the funds may not yet
03 July ABWL $1500 2500 CR
have been drawn upon. These are known
as unpresented cheques.
08 July ABTFR $1000 3500 CR
• Banks impose a variety of Financial
13 July CHQ 673 400 3100 CR
Institutions Duty (FID) charges on
18 July Loan repay 600 2500 CR behalf of governments, as well as
22 July CHQ 1-233 1000 3500 CR account-keeping fees imposed by
25 July Deposit 500 4000 CR the bank itself. These are known as
28 July CHQ 674 4500 500 DR direct debits.
30 July CHQ 675 100 600 DR • Deposits may not yet be credited
30 July CHQ 4-511 1200 600 CR to the bank within the designated
period in which the reconciliation
31 July Balance carried forward $600 CR
statement is being prepared. For
• The BSB is the first six numbers of the account number for Griffiths & Freeman example, although the company
Marketing. may have received cheques, they
• ABWL stands for ‘branch withdrawal’. may not have been presented
• ABTFR stands for ‘branch transfer’, where funds have been transferred to the bank by the business.
electronically into this account. Similarly, cash may have been
• CHQ stands for ‘cheque’. Where the entry has led to a debit, this means that received, but not yet deposited in
the company has written the cheque. Where the entry is a credit, this means
the appropriate bank account.
that one of the company’s customers has paid it.

20 Humanities Alive Economics & Citizenship 10 Second Edition


• If the receipts are greater than
the expenditure for the period, the
company will be in credit, which
is indicated by the letters CR. If the
expenditure is greater than the
receipts, the company will be in
debit (DR), and an overdraft may be
necessary.
• An overdraft means that the bank
allows its customer, the business,
to draw on funds that are not in
the account at that time, effectively
enabling it to borrow money in the
short term without the need to apply
for a loan. The typical overdraft
limit is $10  000 for a business. If the
money is not repaid in a specified
time, interest charges are payable
to the bank.
Student worksheet 
1.6, 1.7
Remember
1 Define in your own words: debtor, creditor, expenditure, receipt, debit,
credit.
think
2 Give three reasons why the keeping of accurate journals is a key function
in managing a business.
3 Examine the statement of receipts and payments for Baker & Hall’s Funky
Music (see page 19) and answer the questions below:
(a) What was the bank balance at the start of the accounting period?
(b) What was the balance at the end?
(c) Given the nature of the business (selling CDs and DVDs, as well as
hiring equipment), who might be some of the company’s debtors and
creditors?
    Keeping accurate journals (pp. 18–19)
4 Prepare a statement of receipts and payments for Baker & Hall’s Funky
Music for the month of February, based on the following information.
Assume the bank balance at 1 February is $4762.
01 Feb Payment of $1000 in cash sales from Adele Griffiths Receipt: 768
03 Feb Fees for lease of speakers to Paul McCarthy — $400 Receipt: 769
10 Feb Payment of rent to landlord of $950 (monthly) Cheque: 115
12 Feb Pay Sony Music $8000 for new stock Cheque: 116
14 Feb Co-owner, R. J. Hall, takes $100 from petty cash
22 Feb A debtor, Lucinda Claire, pays $4000 for DVDs Receipt: 811
23 Feb Sale of CD racks (secondhand) to a school for $800 Receipt: 842
27 Feb Payment of insurance to RNMA of $1000 Cheque: 129
   Reading a bank statement (pp. 20–1)
5 Give three reasons why a bank’s records may be different from a
company’s records for transactions that occurred over an accounting
period.
6 Examine the bank statement on page 20 for Griffiths & Freeman
Marketing. Explain the following details in relation to this business:
(a) With which bank does the company hold this account?
(b) Did the company use its overdraft facility during the month? When?
(c) What do you think are the benefits of the overdraft facility for a business?
credit  when receipts are greater than expenditure
debit  when expenditure is greater than receipts
double-entry system  a system of bookkeeping in which each transaction is
entered twice in the books, once to the debit of an account and once to the credit
of another
liquidity  availability of cash flow
marketing  the process of delivering the right product, in the right place, at the
right time, at the right price
transaction  a business or commercial exchange
unpresented cheque  a cheque which has not been deposited into the bank
account of the payee
Chapter 1: Managing a business 21
 1.8 SkillBuilder
Preparing a cash
budget
Those in charge of business finances need to budget
their money. This means keeping track of income and
expenses to ensure that there is always enough money
coming in to meet business costs — and make a profit.
What is a cash budget?
A cash budget is a forecast of estimated cash receipts
and payments for a specified period of time (the
accounting period).
Why are cash budgets important?
Any budget — whether for a business or an individual
— is based on the principle that spending must be
carefully planned to ensure there will always be money to
cover costs.
Why do you need to prepare a cash
budget?
You need to prepare a cash budget to:
• keep track of the expected and actual movements of
cash in and out of the business over a period of time
• ensure liquidity for the business
• provide evidence of all transactions for taxation purposes.

How to prepare a cash budget

STEP 1
Open your Excel spreadsheet or rule up a table in your workbook like the one You will need:
below. Enter the following headings in your table: Sales, Total sales, Variable •  your workbook
expenses, Total variable expenses, Fixed expenses, Total fixed expenses, • access to an Excel spreadsheet or a
Total expenses, Surplus or deficit (see below). If you are working on paper, workbook ruled up in table form.
leave enough room for the items in each category.

STEP 2    Weekly cash budget for Alley Records

Decide whether each item is an expense Mon. Tues. Wed. Thurs. Fri. Sat. Sun.
or a sale for the business. Make two lists to
Sales
help you here.
CDs $  600 $1000 $  800 $2100 $2000 $3000 $1800
Money in

STEP 3 DVDs 500 500 900 1400 1500 2500 1300

Record the sales figures for each day of the Posters 10 40 70 100 600 400 200
week by category, e.g. CDs, DVDs. Add the T-shirts 70 200 170 300 400 600 400
figures for each day and enter the results in Show tickets 100 800 800 1600 1300 1200 700
the row Total sales. Headphones 15 50 120 95 60 100 60
Total sales 1295 2590 2860 5595 5860 7800 4460
STEP 4
Enter the variable expenses for each day Variable expenses
under the heading Variable expenses. Marketing 750 750 750
Add the figures and record the totals in the Extra staff 300 500 600
row Total variable expenses. Store repairs 400
Repairs 200
STEP 5 Total variable
Enter the fixed expenses for each day under expenses 600 1050 1250 1350
Money out

the heading Fixed expenses. Add the

Fixed expenses
figures and record the totals in the row 500 500
Rent 500 500 500 500 500
Total fixed expenses. 200 200
Utilities 200 200 200 200 200
STEP 6 Insurance 50 50 50 50 50 50 50
Add the total variable expenses and the Internet 45 45 45 45 45 45 45
total fixed expenses for each day, and record Total fixed
the totals in the row Total expenses. expenses 795 795 795 795 795 795 795
Total expenses
STEP 7 Variable + fixed
Subtract the total expenses from the total expenses 1395 795 795 1845 2045 2145 795
sales for each day and record your answer
Surplus or deficit –100 +1795 +2065 +3750 +3815 +5655 +3665
as either Surplus or deficit (profit or loss)
in the last row of your table. If you are Profit or loss
using Excel, use the AutoSum function.
22
 Student worksheet 
1.8

Developing my skills
Task 1
Use the steps shown on the opposite page and
the information below to prepare a weekly cash
budget for Henry’s Healthy Hamburger Hut.

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Hamburgers $50.00 $60.00 $100.00 $300.00 $350.00 $300.00 $350.00

Vegeburgers 60.00 50.00 50.00 150.00 200.00 150.00 200.00
Chicken wraps 25.00 30.00 150.00 360.00 350.00 360.00 350.00
Lamb kebabs 60.00 60.00 60.00 350.00 360.00 350.00 360.00
Pepsi Max 50.00 60.00 120.00 300.00 320.00 300.00 320.00
Fruit juice bar 90.00 70.00 80.00 350.00 340.00 350.00 340.00
Water 50.00 40.00 60.00 120.00 150.00 120.00 150.00
Milk shakes 60.00 70.00 115.00 240.00 260.00 240.00 260.00
Wages 100.00 160.00 160.00 640.00 640.00 640.00 640.00
Breads (incl wraps) 400.00 180.00
Milk 420.00 100.00
Groceries 200.00 100.00
Butcher 400.00 180.00
Pepsi Max 180.00 120.00
Fruit juice 300.00 80.00

• Electricity and gas are $210 per week, pro rated.
• Rent is $455 per week, pro rated.
• Insurance is $1600 per year, pro rated.
• Henry has deliveries from his suppliers every Thursday and
Saturday and freezes the products that he does not use.
• Henry pays some casual employees for work throughout
the week and employs more casuals from Thursday to
Sunday as these days are busier than the rest of the week.
• Henry uses a cash register to record all his sales. He takes
a ‘reading’ from his cash register and records each of his
sales in this spreadsheet.
Task 2
When you have completed your cash budget, answer
the questions below.
1 What is the evidence of sales in Henry’s business?
2 Why do the sales increase from Thursday to
Sunday?
3 What are Henry’s fixed expenses?
4 What are Henry’s variable expenses?
5 Henry trained as an ICT technician and has left a
job where he was earning $80  000 per year. Other
than financial rewards, what rewards will Henry
receive from running his own business?
Task 3
Evaluate your performance. Copy the table below
into your workbook and complete the table using
Rating 1 as the highest rating.
Preparing a cash budget 1 2 3 4 5
I can identify the main elements of a cash
budget.
The steps and example were useful in
helping me to understand how to prepare
a cash budget.
I would now feel comfortable in preparing
another weekly cash budget.
deficit  amount by which expenses exceed revenue
(loss)
fixed expenses  predictable business costs that need
to be paid even if you don’t trade, e.g. rent, utilities,
insurance
surplus  amount by which revenue exceeds expenses
(profit); a situation in which there is too much of a good
or service available compared with what consumers want
to purchase
variable expenses  business costs that vary according
to the level of sales (e.g. stock, marketing, commissions)

Chapter 1: Managing a business 23

 1.9 Human resources
and business
One of the most important changes in modern business management has been recognition that businesses
must look after the needs of their employees — their human resources. All businesses, no matter how small,
are required by law to provide for occupational health and safety, to fulfil contractual obligations to workers
and to ensure that pay, leave and other entitlements are adhered to. All businesses need to be concerned
about the wellbeing of their employees as well as creating and maintaining a positive and harmonious work
environment.

Medium and large-scale businesses
have a Human Resources (HR)
department. HR is a service
department for all parts of an
organisation (e.g. manufacturing
and sales, finance, marketing,
IT). The human resources of
any organisation are the people
(staff and contractors). The other
resources of an organisation are
capital (equipment, property and
money) and information (data,
specialised knowledge and ways of
doing things).
The HR department is responsible
for recruiting, training and
retaining the people needed to run
an organisation. The HR department
works out how many and what
sort of people and skills are needed
(staff planning) and the best way
to organise people to operate the
organisation (organisation planning).
It must deal with employment
contracts, working conditions and
‘best practices’ for the organisation.
There will be times when the
HR department is called in to help
resolve disputes between staff.
Managers, whether in business
or elsewhere, need to guide,
motivate and develop the employees
under their control. Of all of the
business management skills, people
management is the most complex and
important. If your staff are unhappy,
the consequences are very serious,
even for the most profitable firm.
Managing conflict
and stress
These days, managers are learning to
handle conflicts as soon as they arise
and to remain in touch with their
staff to monitor stress levels. This is
the story of a group of people with
a problem in the workplace, and how
mediation helped them to work
it out. Such stories are replicated
throughout the world every day of
the working week.
The scene below takes place in
a meeting room at De Lorenzo
Industries, a highly successful
chain of music and DVD stores.
A mediator has been hired to settle a
workplace dispute.

Simona  Good morning, everyone.
My name is Simona and my role this morning is
to discuss what’s happening at your company.
I will be asking lots of questions that, hopefully,
will assist you in reaching your own settlement
to this case. Maybe we can start by you just
introducing yourselves and telling me a little of
what you do.
Barbara  I’ll go first. I’m Barbara Hamilton
and I’m Office Manager. I also supervise stock
ordering. I’ve been in this role for twelve years.
Simona  Thanks, Barbara.
Sachin  I’m Sachin. I bought a majority
shareholding in the company in 2003. I’m the
manager.
Simona  And it’s going well?
Sachin  I suppose. Profits are strong, orders
are at an all-time high and we’re looking at
expanding to other states. The fact that we’re
here talking to you isn’t what I’d want.
Simona  Of course. However, you do need
to understand that conflict between people
is a part of life and, therefore, it does enter
workplace dynamics. It’s only natural.
It’s how you deal with it that counts.
Who’s next?
Lachlan  Me, I s’pose. I’m Lachlan. I started right to be heard, otherwise you won’t
working at De Lorenzo 12 months ago. I like the understand other people’s views and an
work. I’m right into music and film, so Sachin outcome won’t be possible. Sachin, tell me
lets me deal with customers and even negotiate about the ordering of stock.
with independent labels to stock discs from Sachin  Until Lachlan’s arrival, Barbara
lesser-known bands. It’s great. handled everything, but the job got too
Simona  So, why do you think we’re here much for her. She’s a very important person
today, Lachlan? in the company and already has her hands
Lachlan  Probably because I said some things
to Barbara that she didn’t like.
Barbara  He called me a ‘cow’ in front of other
staff!
Simona  Is that correct, Lachlan?
Lachlan  Well, yes, but I was provoked.
Simona  Why did you do it?
Lachlan  She’d been treating me badly for a
while and it was the last straw. She’d blasted
me for not sending through a big order to BMG
and then another one from Fox and it wasn’t
my fault.
Barbara  Too right it was your fault! If only all
the ordering was left to me.
Simona  I’ll need to stop you there, Barbara.
The purpose of mediation is for me to ask
questions, not to take sides or suggest
solutions. We all need to respect each other’s

24 Humanities Alive Economics & Citizenship 10 Second Edition

full with GST and WorkSafe regulations.
I hired Lachlan because he has a commerce
background.
Barbara  Now that was your biggest
mistake! My niece wanted that job and she
would have been far more appropriate than
him.
Simona  It’s important that we don’t get
sidetracked, Barbara. Let’s just focus on the
people in this room for now. Go on, Sachin.
Sachin  The ordering of the stock is a
big job. Lachlan evaluates what we need,
ensures that new releases are arriving
on time, and he orders specialty discs
for customers. However, on the sizeable
overseas orders such as the DVD release
of Return of the King, Barbara checks
everything before they’re sent.
Simona  Does Lachlan do his job well?
Sachin  Well, yes, until we missed the DVD
release of Return of the King.
Barbara  And he also missed the release
of Dude, Where’s My Car?
Simona  What happened there?
 Sachin  We had 200 customers with the
Limited Edition disc on order and it never
came through. It was 23 December, so
people had ordered them for Christmas.
They were very annoyed.
Simona  What went wrong, Lachlan?
Lachlan  It’s true that the order for King
wasn’t processed on time, but I had given
Barbara the documents for her to check.
This was a huge overseas order — 5000
copies of the DVD package — and Barbara
had to check the paperwork and then send
it off.
Simona  And did you, Barbara?
Barbara  Yes, I certainly did.
Lachlan  Yeah, but it was too late when
you finally sent it.
Barbara  You didn’t give me enough time.
Lachlan  You had a full week!
Simona  I’ll stop you both there. Barbara,
how long do you say Lachlan gave you to
check the order?
Barbara  One day, two days — I’m not
sure.
Lachlan  I’ve kept copies of emails that I
sent her to ask for this to be done. It says
here that the order needs to be checked by
the 21st. The email is dated the 14th. See,
a week.
(Lachlan gives the hard copies to Simona
who reads them quietly. She then hands
them to Barbara.)
Simona  This does appear to be correct,
Barbara.
Barbara  How can I remember! It was a
busy week. We had the auditors here from
the Tax Office. Dom and I were flat out.
Lachlan  Yeah, but then you blamed me
in front of Sachin. You knew that you had
sent it in late after you had checked it. You
should have taken responsibility.
Barbara  You shouldn’t have called me a
cow. I could have you up for harassment!
Simona  Come on! Let’s get back to the
email dates. Do you then accept, Barbara,
that you shouldn’t have accused Lachlan?
Barbara  On this occasion, yes. But there
have been other times when he hasn’t been
on the shop floor when needed and I’ve
found him in the storeroom.
Lachlan  If you responded to your emails,
I’d know what I had to do.
Barbara  Here we go again — the email
made me do it!
Simona  This seems to be a core issue.
Barbara  What does?
Simona  The use of the email within the
company. What do you have to say on that,
Sachin?
Sachin  Well, I personally have no problem
with it. Barbara is highly efficient and
responds to me within an hour.
Lachlan  Geez, I’m lucky to get a response
within the week. I ask her for something
and by the time she replies, it’s often too
late to finish the task properly and I finish up
looking slack.
Simona  Is that true, Barbara? Are you less
responsive to Lachlan than to your boss?
Barbara  Maybe sometimes, yes.
I mean, if your boss sends an email, you
respond, but for Lachlan, well, he’s only a
shop assistant so . . .
Lachlan  You’re pathetic.
Simona  Once again, I remind you that we
need to respect each other here.
Sachin  I must say that I’m a little
disappointed with that attitude, Barbara.
Every aspect of our organisation is
important, whether it’s Dominic doing the
accounts, Georgie serving customers or
Katherine doing our PR.
Barbara Sorry.
Simona  Who are you saying that to,
Barbara? Sachin or Lachlan?
Barbara  Both. Lachlan mostly,
I guess.
Sachin  I’ve invested over three million
dollars in this company and I’m not going to
sit back and see this sort of nonsense bring
down our morale. This will ultimately hurt
our customer relations and, eventually, our
turnover. Then we’ll all be out of business.
Simona  That’s true, you know. I’ve been
a mediator for seven years and I’ve seen
some excellent businesses be torn apart by
office politics.
Sachin  So, what’s the solution? Where do
we go from here?
Simona  You tell me.
Lachlan  Okay. For a start, I’ll say hello to
Barbara in the morning rather than ignoring
her. And I’ll tell her in person that I’ve sent
an email, not just assume that she’s going
to read it the moment that I send it. Perhaps
we could have a scheduled meeting every
morning to discuss the orders.
Simona Barbara?
Barbara  To be honest, I need another
person to help me with the WorkSafe
paperwork. I’m sinking under the weight
of a thousand files. It’s probably why I’m
getting so snappy.
Sachin  That’s easily fixed. We’ll employ
a personal assistant to help you. Lachlan
can report directly to the PA and, at the
meeting, indicate a time when orders need
to be checked out of the office.
Lachlan Fine.
Simona  Well done, you guys. A good
resolution to a problem that could have
really hurt your business. And Lachlan, order
me a copy of Return of the King, would you?
Barbara  I know! My niece could be my
personal assistant!
Sachin  Yes, well, we’ll wait and see.
Remember
 1 In your own words, explain the
main issues of conflict in this
dispute.
 2 How long had Lachlan been
working with the firm? How long
had Barbara been employed in
her role?
 3 What role did Sachin play? What
hopes did he have for the growth
of the business?
 4 How did Simona describe her role
as a mediator? Explain in full.
 5 Outline the solutions that were
gained through the mediation
session.
think
 6 What is the link between the
HR department and this type of
mediation session?
 7 In what ways could a conflict such
as this potentially hurt a business
organisation?
 8 (a) Did Barbara, Sachin and
Lachlan behave in an
appropriate manner during
the session? Explain.
(b) Suggest why they may have
responded this way.
 9 Had Simona, and not Sachin,
expressed the idea of hiring a new
personal assistant, would this
outcome have been as effective?
Explain.
10 Give examples of where the
mediation session could easily
have been sidetracked. Why was it
so important to retain focus?
teamwork
11 In small groups, write and
perform for the class a mediation
scenario based on a different
workplace issue of your choice.
human resources (HR)  the people
working in any organisation, permanent
and casual
mediation  a way of resolving a dispute in
which a mediator helps the parties to reach
agreement; mediators have no power to
impose a decision on the parties
mediator  a independent person who
is trained to help the parties in dispute to
reach a compromise
recruiting  employing new workers for an
organisation
retaining  using pay and conditions
such as leave, superannuation and other
benefits to encourage staff to stay in an
organisation
training  building the necessary skills to
work in an organisation
Chapter 1: Managing a business 25
 Check and challenge
1 Read the following piece carefully and insert the 4 Examine the financial statement below and answer
missing words from the list below. (pp. 6–9) the questions that follow. (pp. 18–9)
My uncle used to own and operate a lawn-mowing
business as a __________ __________ . Because he had Pasta Deliziosa — the best pasta in the west
__________ __________ , he could be forced to sell his Statement of receipts and payments
December 2009
personal assets to pay his business debts, which is,
sadly, what happened. At one stage he had thought Cash receipts $ $
of setting up a __________ with three other people so
Debtors 9  500
that profits and losses could be shared equally. His
accountant had suggested that he and his prospective Cash sales 40  500
partners consider becoming a __________ __________ ,
Sale of equipment 1  000
as they, as shareholders, would have only limited
liability. His company would have had Other revenue 3  000
__________ __________ after its name, and the
54  000 CR
company would not have been listed on the
__________ __________ . Cash payments

Pty Ltd partnership stock exchange Creditors 6  000

sole trader unlimited liability proprietary company
2 Write down one important point to remember under
each of the following headings:
(a) business knowledge (b) market awareness
(c) customer service (d) sufficient capital
(e) stress management.
3 Comment on the management style shown below.
(pp. 24–5)
(a) How would you describe this management style?
(b) What stress do you think this manager would
cause among employees?
(c) Discuss in small groups some approaches a
mediator might take to resolve this conflict.
Cash purchases 14  000
Wages 12  000
Other expenses 9  000
Loan repayment 10  000
51  000 DR
Excess of cash receipts over cash payments 3  000 CR
Bank balance as at 1 December 2009 27  000 CR
Total bank balance as at
31 December 2009 30  000 CR
Lisa and Frank Delorenzo established Pasta Deliziosa
in 1990 and have established a regular clientele of
locals who love their homemade pasta and sauces.
Their shop is located in a little strip shopping centre
comprising a newsagent, milk bar and hairdresser.
At the start of 2008 a major supermarket opened
five minutes away. The supermarket stocks fresh,
mass-produced pasta.
(a) Explain the current cash position of Pasta
Deliziosa. Are they doing well?
(b) It is anticipated that in 2008 the business will lose
20 per cent of its sales to the supermarket. How
might this affect Pasta Deliziosa?
(c) Suggest three key elements of a three-year
marketing strategy to save the business.

26 Humanities Alive Economics & Citizenship 10 Second Edition

5 (a) As a class, list some small-scale business ventures
that you might like to undertake one day.
(b) In small groups, select one of the ideas discussed
and explain how you would go about deciding:
(i) the location and layout of the business
(ii) the main ways in which you will deliver your
products/services to customers
(iii) how you will organise your initial marketing
for your business
(iv) what some of your probable cash receipts
and payments will be
(v) general strategies you could adopt to help
ensure you maintain a cash surplus.
6 (a) Many of the financial operations of businesses are
performed electronically today. Form into groups
and select one of the following areas to research
(on the internet or by other means):
• phone banking
• online banking
• the MYOB (Mind Your Own Business)
accounting package.
Negotiate the sharing of research, documentation
and presentation tasks. Your aim is to communicate
accurately and clearly to the rest of the class what
(in broad terms) these processes involve.
(b) In light of the above presentations, brainstorm
and then discuss as a class what you think
might be the longer term implications of these
trends.
7 Read the article below and then answer the following
questions.
(a) Why do you think SMS was such an effective
marketing tool in this instance?
(b) What assumptions was the company making
in adopting this business strategy? Would
you say this was a high- or low-risk strategy?
Explain.
(c) How would you react to an SMS marketing
campaign? Why?
(d) Can you think of other businesses (including
media shows) that use SMS to promote or
facilitate their operations? Explain. Besides the
business, who else benefits?
(e) Prepare an SMS campaign that could be
incorporated into the initial marketing strategy you
developed for the business venture in activity 5.

SMS sends an SOS for Karl’s Snowboards

SMS saved the day for Karl Metzler and his struggling
snowboard business. The SMS-based marketing
campaign his company conducted was a last-ditch
attempt to avert declining sales figures and decreasing
profitability.
‘We entered the snowboard market late,’ German-
born Metzler explained, ‘and the competition was already
intense. Also, our business premises are not ideal; we’re
not in the main street of Jindabyne, so unfortunately we
miss out on quite a lot of passing trade. The campaign
was a desperate measure, but it paid off. We recorded a
6 per cent increase in sales last year and have increased
our market profile.’
Metzler described the SMS campaign: local letterbox
drops and city radio advertising invited customers
to send an SMS message to the business in return
for a 10 per cent discount on snowboards. The SMS
exchange, in effect, cemented a business transaction that
Metzler thinks advertising alone would not have secured.
‘It was risky in some ways,’ Karl said, ‘as our profit
margins were very tight, and the campaign cost us quite
a bit, but it worked.’
The key to the success of this campaign was getting
customers through the door. Metzler does not think that
would have happened without the SMS campaign.

Chapter 1: Managing a business 27

 Thinking about . . .
…what I have learnt
1 Business ideas
Every business starts
with an idea. Some
of the most successful
businesses have resulted
from the inspiration of an
entrepreneur.
1 Who are the three
most impressive
entrepreneurs you have
learnt about in this
chapter?
2 Which personal skills
were most necessary
for the success of these
entrepreneurs?
The Macbook Pro, iPod and Mac mini all started as business ideas.

2 Strategies for success

A successful business needs to follow well-established
practices.
1 Identify four
strategies which
should be followed
in setting up a
successful business.
2 Why is marketing
so important
and what does it
involve?

Training can develop the skills and productivity of staff

and bring greater staff satisfaction. BACK TO THE ESSENTIAL QUESTION

3 Looking after staff in businesses
Human Resources Management has become a most
important part of successful business management.
1 Why is a good working environment important to
the success of any business?
2 List some ways an effective human resources policy
can help a business be successful.
The Essential Question is: How does a
business start and what does a business
need to be successful? Make a list of what
you need to find out before starting a new
business. Write a paragraph about how you
could evaluate the success of a business.

28 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 
1.12

…how I learn
1 Draw up the table below in your notebook and 2 Copy this sentence into your notebook and finish it
decide how you best learn new things. Give yourself by selecting some of the thinking skills shown in the
a ranking from highest (1) to lowest (5) for each item thought bubbles below.
on the table. In the future, I will use some thinking skills more often.
In this chapter, I think I have learnt best by: Rank
These thinking skills will include…
• reading and analysing examples of different types
of businesses
… being more analytical
• discussing ideas about business with class
when I read about
members
businesses … being more aware
• using the internet to locate information about of how businesses
setting up successful businesses affect my life
… improving my understanding
• developing a business plan of my own of the record keeping which is
necessary in business
• looking at the photographs, illustrations and flow
… being more confident
diagrams showing how business systems work
in my ability to plan
• using the SkillBuilder to practise preparing a cash … trying to recognise how
a business which
different types of
budget I could set up
businesses operate
• answering review questions at the end of each
section spread
• thinking about my own life and how business has
affected me
• another way (describe this in your own words)

Self-evaluation
Think back over how much you have learnt about how
businesses operate and the effect of business on your
life. Complete the following table by placing a tick in
the correct column for each description.
Overall … High Medium Low Needs improvement
. . . I joined in class activities, especially
discussions and debates.
. . . I decided to take more interest in business,
now and in the future.
. . . I developed an idea for a business.
. . . I think of myself as able to set up a business
when I leave school.

Chapter 1: Managing a business 29

 eBook plus
ICT activities
Best Biz Association Award
SEARCHLIGHT ID: pro-0001
Scenario
The Best Biz Association Award, better known as the BBAA,
is due to be presented in the next three months. You have a
lot of work to do before then. As the consultant who chooses
the business that this award is bestowed upon, you have a
lot of research heading your way.
The BBAA is a world-recognised consumer body that
acknowledges excellence in consumer products. These
products come from businesses whose products are of high
quality, good value, readily available and produced to strict
environmental, social and ethical standards. Four businesses
have been short-listed for this prestigious award. Each has
been recognised as a business that has initiated creative and
successful marketing campaigns to attract consumers, making
their brand the product of ‘choice’ for informed consumers.
Your introductory video lesson includes an interview
with Christopher Zinn from consumer body Choice,
which can help you identify a good product.
30
your task
Your job is to assess these businesses and select a winner.
You must provide a detailed report to the BBAA outlining
why you chose that business over the others in the short list.
Process
1 Open your ProjectsPLUS application for this chapter,
located in your eBookPLUS. View your Project Brief, click
the ‘Start Project’ button and then set up your project
group. You can complete this project individually or invite
other members of your class to form a group. Save your
settings and the project will be
launched.
2 Navigate to your Media Centre
and watch the introductory video
clips to learn about each of the
short-listed companies.
3 Visit the companies’ websites
and research their history,
products and general information.
Enter your findings as articles under
each topic in your Research Forum.
You can view and comment on
other group members’ articles,
and rate the information they have
entered. The information you enter should help you
critique each company under the following criteria:
• How good is the product?
• Does it meet a genuine consumer need?
• Is it of a high quality?
• Is it considered as value for money?
• Is it manufactured or produced at a high
standard?
• How has the business demonstrated
its environmental policies?
• Does the business see itself as
socially responsible? Why?
 • What are some of the ethical SUGGESTED
standards the business has SOFTWARE
demonstrated? • ProjectsPLUS
• How creative and successful • Microsoft Word
are the business’s advertising
campaigns?
4 When your research is completed, print your
research report. This must be handed in as part
of your assessment.
5 If working as a group, come together and
evaluate your research on each company and,
finally, choose the company that you believe
deserves to win the BBAA.
6 Use the ‘Recommendations to the Best Biz
Association’ template in your Media Centre
to help you create your final report to hand in
to your teacher. Your report should follow this
format. This is a standard format for
business report writing.

Your ProjectsPLUS application is available in this

chapter’s Student Resources tab inside your eBookPLUS.
Visit www.jacplus.com.au to locate your digital resources.

MEDIA CENTRE
Your Media Centre contains:
• video segments from four
Australian companies
• a ‘Recommendations to
the Best Biz Association’
template.
Your Project Brief includes a
video lesson presented by
Choice.

Chapter 1: Managing a business 31

 New wave
CHAPTER

2 economy
Essential ideas
Surfing, which represents a healthy,
easygoing lifestyle, has become a desirable
part of Australian culture. Most Australian
teenagers will have at least one big-brand
surf T-shirt or cap. Open up Dad’s wardrobe
and you are likely to find a Billabong T-shirt
or a pair of Rip Curl shorts. Little sister
probably has her eye on a pair of Roxy
board shorts.

Australian-owned surf brands, like Mambo,

Rip Curl and Billabong, have become
leaders in a multi-billion-dollar global
business, exporting their goods to buyers
around the world. These companies have
improved Australia’s economic situation by
catching onto the new wave economy —
globalisation. Billabong was floated on the
stock market in 2000 at $2.60 a share, and
its shares trebled in value in just two years,
with more than half of its sales occurring
in the United States. Despite a slowdown
of forward orders because of the global
financial crisis, Billabong is still successful.

Trade agreements between countries form

part of the new wave economy. However,
the changing value of the Australian dollar
in relation to the currencies of our trading
partners can influence share prices and
business success. The new wave economy
must overcome a downside which includes
loss of some Australian jobs, harmful
environmental impacts and ethical issues
relating to pay, working conditions and
selling methods.
 Billabong organises international surfing competitions to
help promote its name and products. Bobby Martinez, a
professional surfer, shows his winning style in the Billabong
Pro Tahiti, in May 2009.

Essential links
Globalisation has enabled many businesses to grow Each season, Billabong and other Australian companies
huge, establishing themselves in many countries sell millions of dollars worth of clothing and accessories to
throughout the world, in order to produce or provide a international consumers.
variety of goods and services. Some of these enormous,
successful businesses began as much smaller
Australian companies.
THE ESSENTIAL QUESTION
1 Look at the advertising photograph of the teenage
Some argue that globalisation (the
surfer. What image do you think the company is
strengthening of economic ties between
trying to present?
nations of the world and the resulting trade
2 How do companies such as Billabong connect and investment opportunities) is not benefiting
Australia to the global economy? humanity as its supporters thought it would.
Others argue that globalisation has brought
3 How do you think companies such as Billabong help
many benefits by increasing economic
provide economic growth for Australia?
opportunities for all countries involved. The
4 Why does Billabong spend massive amounts of Essential Question is: How does globalisation
money sponsoring professional surfing competitions really affect us on a day-to-day basis?
in various places throughout the world each year?

Chapter 2: New wave economy 33

 2.1 What is globalisation?
Many people use the term ‘globalisation’ to describe the strengthening economic ties between nations
of the world, and the resulting trade and investment opportunities. Others use it to refer to the increasing
exchanges between nations at the social, cultural and technological levels. Some refer to our ability to rapidly
communicate with and travel to other regions of the world. The focus of this chapter is on the first definition.
Greater choice and variety of goods and services is
a flow-on benefit of globalisation for consumers.
A downside of globalisation is the deplorable
working conditions faced by many workers in
poorer countries.
B What’s the ‘downside’ of globalisation?
Globalisation can create unfair working conditions for
many workers in poor countries. Large transnational
corporations (TNCs), for example, may shift their
production factories to poorer countries, where they can
hire labour much more cheaply than in their own country.
These poor workers may be forced to work long hours,
in unsafe and unhealthy factory environments, for a very
small wage. Workers in the home country may lose their
jobs altogether.
  Also, big TNCs have the ability to undercut prices
charged by competitors, often forcing smaller producers
to close down. This means job losses, less competition
and less choice for consumers. Removal of competition
can allow TNCs to raise product prices.
34 Humanities Alive Economics & Citizenship 10 Second Edition
A What are the benefits of globalisation?
Globalisation can be a driving force for economic growth
(an increase in the size of the economy, as measured by
gross domestic product). As countries encourage free
trade with other countries, new markets are created.
Selling more products increases company profits.
This means companies can afford to hire more
workers. As a result, both companies and
workers become wealthier and the standard of
living improves.
  Trade helps to ensure that resources
are used efficiently to produce goods and
services. It enables nations to specialise in
the products that they make efficiently or
grow naturally. At the same time, producers
competing on a global rather than a
national level must operate efficiently to
keep prices competitive. This increased
focus on efficiency and cost savings provides
flow-on benefits for both producers and
consumers.
C Who oversees the global market?
A number of international organisations oversee
the flow of goods, services and finance around the
world. These include:
• World Trade Organization (WTO). Established in
1995, it administers the rules of international trade. It
is an influential organisation that has the power to rule on
international trade disputes.
• International Monetary Fund (IMF). Established after World War II, its main
function is to provide an orderly way of financially assisting developing
countries. (To find out more about the IMF, use the IMF weblink in your
eBookPLUS.)
• Organisation for Economic Co-operation and Development (OECD). This
organisation, whose 30 member countries include Australia, Japan,
Korea, New Zealand and countries in Western Europe and North America,
develops economic and social policy for its members.
environmental sustainability  achieved when natural resources
can continue to be exploited without destroying the balance of
the environment; may be threatened by the impact of production
methods in meeting demand for goods and services.
free trade  an exchange situation between two or more countries
that involves a reduction of trade barriers such as tariffs, import
quotas and government restrictions on foreign ownership
non-renewable  describes any resource that cannot easily be
replaced, such as fossil fuels
standard of living  a measure of the level of material comfort of a
population, in terms of the goods and services available, poverty rate
and average income
transnational corporation  a business (sometimes called a
multinational corporation) that operates in more than one country,
usually with branch offices outside its home country
 Globalisation, involving shipping goods to
or from other countries, has advantages for
Australian businesses and consumers.
D   for
  What does globalisation mean
Australia?
Many Australian companies now operate
internationally, selling their goods and services
worldwide (which means improved profits).
Some have established their production
centres in regions such as Asia to reduce
labour costs.
  Globalisation has meant that Australian
farmers must now compete at a global
level to sell products such as wheat and
wool, where previously they had established
trading partners.
  Overseas investment by Australian
companies helps to create employment and
wealth in those countries. Similarly, investment
in Australia by overseas countries may create
growth and employment opportunities that improve
our standard of living.
  Importing a huge variety of goods and services
allows consumers greater choice, usually at cheaper
prices. Overseas-made products in almost every Australian
home include electrical goods, CDs, food items, clothing and
footwear, numerous television programs and perhaps the car.
E Issustainable?
globalisation environmentally
As world population grows, demand for
goods and services increases. Meeting
this demand requires greater use of
renewable and non-renewable natural
resources. The manufacturing processes
involved increase pollution levels and
produce many dangerous by-products.
Other serious environmental problems
associated with meeting increased
demand include the hole in the ozone
layer, destruction of old-growth forests,
extinction of many plant and animal
species, and climate change.
  Both consumers and producers are
becoming increasingly aware of the need
for environmental sustainability.
Clear felling of forests, to meet
rising demands for timber, reduces
the availability of tree hollows in old
growth forest that some Australian
species need as their habitat.
Greater access to the internet enables even small
or isolated businesses to compete efficiently in a
globalised market.
F How does the internet benefit globalisation?
The internet allows huge amounts of information to be accessed
or shared very quickly, allowing individuals, businesses and
governments around the world to share and exchange information
and ideas. As e-commerce (commercial transactions such
as advertising, buying and selling on the internet) increases,
isolated groups such as rural exporters will be able to operate
more competitively. This will provide growth opportunities for
many country towns and out-of-the-way businesses that might
otherwise have difficulty in reaching a large market.
Student worksheet 
2.1
REMEMBER
1 In your own words, define the term globalisation.
2 List three benefits and three drawbacks of
globalisation.
THINK
3 Why might Australian farmers be unhappy that the
Australian government has yielded to WTO pressure
to sign more free-trade agreements?
4 Of the benefits and drawbacks that you listed in
question 2, which are (a) short term and which are
(b) long term? Explain.
COMMUNICATE
5 For five different products that you use regularly:
(a) Identify where the product was made.
(b) Suggest why you think the product was made
there.
(c) In small groups, discuss your findings. Ask
questions of each other that explore different
points of view.
ICT
6 Some critics of globalisation argue that transnational
corporations dominate culture and choice of products
around the world. Do you agree with this statement?
Use online forums to discuss this issue with a group
of classmates.
Chapter 2: New wave economy 35
 2.2 SkillBuilder
Interpreting grouped bar graphs
What are grouped bar graphs?
A grouped bar graph displays the relationships between
two or more variable quantities. The quantities are
usually measured along two axes set at right angles
to each other, and the data are shown as a series of
horizontal parallel bars, grouped together to show
different stages in the relationships.
Why are grouped bar graphs
important?
Grouped bar graphs help us to see trends and
developments or to compare and contrast a number
of different sets of data more easily than if we looked
at the same data in a series of separate graphs or as a
succession of overlays.

How are grouped bar graphs STEP 3 Distinguish between the items
represented
interpreted? • According to the key, year 2007–08 is shown as the
green upper bar for each product.
STEP 1 A general overview • Exports for 2006–07 are shown as the orange middle
Look at what the graph represents. In the graph in figure 1, bar in each bar triplet.
Australian principal merchandise exports are shown over the • The 2005–6 amounts are shown as the blue bottom bar
three years 2005–06, 2006–07 and 2007–08. in each group.

FIGURE 1 STEP 4 Observe the general trend

Principal merchandise exports (Australian produce) • Look at the general trend of the graph. Over the
Iron ore & three-year period, the graph shows a general increase
concentrates
Non-monetary
in total value of most of the listed exported products.
gold Some have shown a slight reduction during the period.
Coking coal, high Overall, there appears to be an increase in the total
quality
value of principal Australian merchandise exports during
Crude petroleum
this three-year period.
Non-coking coal • Look for changes in patterns in each of the grouped
Petroleum, coal, bars: for example, which products showed an increase
water gases in money earned? Which ones showed a reduction?
Alumina (alumina
oxide)
Which had the largest change?
Coking coal, other
than high quality STEP 5 Draw conclusions and make
Unworked aluminium 2007–08
& alloys 2006–07
predictions
Beef & veal,
2005–06 Consider questions such as:
chilled or frozen
• Is the general trend likely to continue?
0 5000 10 000 15 000 20 000 25 000 • What will happen to demand for each product as world
Source: DFAT STARS database. A$ million population continues to grow?
• How will a downturn in the world economy, especially
Australian principal merchandise exports over a that of our trading partners, affect each product in the
three-year period graph?
• What effect will the fall in the value of the Australian
STEP 2 Read the main parts dollar, from its high in late 2008, have on the next lot of
• The vertical axis shows major merchandise exports in bars?
descending order of value. • How might a rise in the price of gold, caused by the
• The horizontal axis shows the value of exported products in global financial crisis, affect the value and amount of
millions of Australian dollars. gold exported?

36 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 
2.2

Developing my skills
FIGURE 2
Now look at the graph from the 1996 Census and
answer the questions that follow.
Western
Australia FIGURE 3

New South Labourers & related

Wales

Elementary clerical,
sales & service
South
Australia
Intermediate production
& transport

Queensland Intermediate clerical,

sales & service
2005–06
2006–07 Advanced clerical &
Victoria 2007–08 service persons
2008–09
Tradespersons & related
0 1 2 3 4 5 6 7 8 9
Million tonnes
Source: Australian Commodities, vol. 15, no. 4, December quarter 2008, p. 650. Associate professionals

Australian wheat production

Professionals
Examine the grouped bar graph in figure 2, and answer
the following questions: Managers & Females
 1 What data are presented in this graph? administrators Males
 2 What is displayed on (a) the vertical axis and (b) the
0 100 200 300 400 500 600 700 800 900
horizontal axis? Employed persons (thousands)
 3 Which year had the greatest total wheat production
Source: ABS, ABS Publication 1331.0 Statistics: A Powerful Edge.
for Australia?
 4 Which year had the lowest wheat production for Employed persons by occupation and gender, Australia,
Australia? 1996 Census
 5 Offer a possible explanation for the huge fluctuation
in production levels in these two years.  1 What does the graph show?
 6 Over the five years, which state produced the least  2 List the four occupation groups where more females
wheat? than males are employed and explain why this is
 7 What is likely to happen to demand for Australian the case.
wheat, because of the fall in value of the Australian  3 Which occupation group has 780  000 more males
dollar, from its high in late 2008? employed than females?
 8 New South Wales produced about two and a half  4 Of the nine occupational groups shown, identify
times as much wheat in 2008–09 as in 2007–08. the one that has the largest total number of
What effect might this have on the domestic price employees. Suggest why this is the case.
of wheat in New South Wales?  5 (a) Estimate the total number of people employed
 9 Victoria is the only state to have produced less at the time of the Census.
wheat in 2008–09 than in 2007–08. Suggest why (b) What percentage of those employed was
this may have occurred. female?
10 Assuming that wheat used in Australia remained  6 Predict the changes in numbers and gender
the same in the years shown, during which years composition that are likely to occur in two of the
were exports of Australian wheat likely to increase? occupational groups by 2016 and justify your
Explain why. predictions.

Chapter 2: New wave economy 37

 2.3 Export markets
For any nation to enjoy economic growth and avoid a recession, it must establish and maintain strong export
markets that offer a diversity of merchandise (products and services) to a wide range of countries. However,
Australian businesses cannot produce all the goods and services we consume, so imports are needed. The
aim is to not import, in value, more goods than we export; otherwise, Australia will have a trade deficit.

It was once said that Australia ‘rode on the sheep’s

back’. We were then essentially a nation of primary
producers, who relied on our farming and mining
sector exports for economic survival. Although
mining sector exports are still important today, with
coal Australia’s largest export earner, twenty-first-
century markets present great challenges for Australian
businesses, which must often be willing to look at other
exportable products, in order to succeed. There’s a
global market of almost seven billion people out there!
Australian trade in 2007–08
• The value of merchandise trade was $382  981 million.
• The services trade surplus was $1357 million, well up
from a deficit of $294 million in 2003–04.
• The balance of trade showed a deficit: $21  490 million.
• Primary products continued to be Australia’s main
export, accounting for $115  000 million.
• Japan remained Australia’s largest individual export
market, accounting for 19.3 per cent of total exports,
followed by China (14.9 per cent) and the Republic of
Korea (7.9 per cent).

Why are exports so important?

According to data from Austrade: figure 2
• approximately 1.8 million Australian jobs are
connected with export production
• 25 per cent of jobs in regional Australia rely on exports
• a 10 per cent increase in Australia’s exports could
generate more than 70 000 new jobs
• exports and investments represent almost 25 per cent
of Australia’s total income.
Of course, the benefits of trade extend far beyond
employment statistics. Exporters often have branch
offices in overseas locations. This allows Australians to
live and work overseas.
Trade encourages communication and agreement
between the peoples of the world, which can promote
greater harmony and understanding.
Also, exports lead to foreign exchange earnings
(money earned from overseas countries), so that we, in Australia imports and exports thousands of containers like
turn, can purchase imports. these on specialised container ships.

figure 1
1997–98 Total 2007–08 1997–98 Agriculture 2007–08
$112.1b $179.6b $31.5b $27.5b
China Middle East
United States
4% New Zealand 6% 8%
India 5% India
New Zealand China United States
2% United States 5% 7% 9%
6% Other Other
6% Middle East 19% European 23%
Republic of Korea Other 7% Union 27
Republic of 31%
7% Other Korea 9%
European
United States 40% 8% Union 27 Japan China
9% European 12% 17% Japan
10%
Union 27 16%
European 11% Japan
Union 27 China 19% ASEAN Other Asia Other Asia
Japan 15% 16% 16% ASEAN
12% 12% 13%
20%
Source: Australian Commodities, vol.15, no. 4, December quarter 2008, p. 741.

Our export figures have changed significantly over the decade as shown in these pie graphs.

38 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 

The Wiggles — an exporting success 2.3, 2.4

If you’re looking for the most successful Australian person or REMEMBER

group selling music and entertaining skills to the world, forget 1 Why do countries need to establish
Kylie Minogue, Rove McManus or Cate Blanchett — it’s The strong export markets?
Wiggles who win hands down! 2 Give three examples of the
importance of exports for the
figure 3 Australian economy.
THINK
3 Why do you think The Wiggles were
named Australian Exporter of the Year
in 2005?
4 Live performances are only a small
part of The Wiggles’ business. Why
was it important for The Wiggles to
expand into other areas and to export
their products overseas?
5 Examine the graphs relating to the
markets for Australian exports (figure 1)
and answer the following questions:
(a) During the 10-year period shown,
by how much had Australia’s total
exports increased in value?
(b) In percentage terms, which
country grew most, during the
decade, as a destination for our
total exports?
(c) In percentage terms, which
country came next?
(d) What factors may have contributed
to the decline in agricultural
exports from Australia during the
given decade?
(e) Explain why China purchased
The Wiggles have earned export dollars for Australia by entertaining a greater proportion of our
children around the world. agricultural exports at the end of
the decade.
With a turnover of some $45 million annually, The Wiggles are (f) Comment on what changes there
contributing positively to Australia’s export markets and have been may be to the pie graph after a
named our highest-paid entertainers. further decade.
The band originally formed in the 1980s and produced its first (g) ‘The Australian economy rides on
the sheep’s back.’ Is this statement
album in 1991. By 1999 it had toured the United States as the
still true? Use the figures available
support act for a purple dinosaur named Barney. Having conquered to explain your answer.
the American market, The Wiggles set their sights on the European
market, expanding into Portugal and France, and most recently
Asia.
balance of trade  the difference, over a fixed
The Wiggles have officially become a great Australian export, period, between the money gained by a country
drawing substantial money into the country. from its total exports and money it spends on total
The Wiggles have built a business that includes the sale of imports; where export income exceeds import
payments there is a surplus in the balance of trade
videos and music, television rights, live performances, product economic growth  growth of an economy as
franchises, and licence deals with global companies such as measured by recognised factors such as the total
Walt Disney. Sales of their DVDs and videos alone have exceeded value of goods and services produced in a given
$20 million. time (gross domestic product)
primary producer  a person or company
In October 2005 The Wiggles won the New South Wales involved in growing, producing or extracting of
export award and were named Australian Exporter of the Year. natural resources
They may be good entertainers and make good music, but they recession  a downturn in an economy that
are also very good business for Australia and continue to earn follows two or more quarters of negative growth;
usually less severe than a depression
export dollars from many countries.

Chapter 2: New wave economy 39

 2.4 Imported products on trial
You may not realise it, but you have been living with imported products all your life. In fact, if your parents used
disposable nappies, you first came into contact with imports the day you were born. You consume imported
products every day, but have you ever stopped to think about what effects imports have on the Australian economy?

A What is an import?
An import is a good or service that is
produced overseas and brought into
Australia. Imports are brought into the
country by a business, which may sell
them to other businesses or directly to
the public.

B What is the current account

deficit?
The statistical record of financial
transactions between Australia and the
rest of the world is called the balance
of payments. It has two sections — the
Current Account and the Capital and
Financial Account. The Current Account
determines the value of goods, services,
incomes and net transfers of money
between different countries. (It is referred
to as the current account deficit (CAD)
because there is generally more money
going out of the country than coming in.)
  When other countries buy fewer
Australian exports, our CAD will worsen.
This may be caused by deteriorating
international trade relations. Trade
agreements are attempts to lessen
such problems. Other factors that can
affect the CAD are changes in Australia’s
inflation rate (compared with that of
its trading partners); the value of the
Australian dollar; the level of Australian
overseas aid to countries facing natural
disasters; and the level of consumer
confidence (which can be influenced by
economic conditions, natural disasters or
acts of terrorism).
Imported cars like this one have forced local manufacturers to become more
efficient in their production methods and use of resources. Consumers
benefit through lower prices.
D What is the terms of trade
index?
E From whom do we import?
Australian imports come from countries all over
The terms of trade index shows the the world. As one of the effects of globalisation,
relationship of changes in prices we as consumers can buy overseas products in
of exports to changes in prices of stores or in our own home using the internet or
imports. It indicates the changes telephone.
in the quantity of imports that may
be purchased with a given quantity
of exports. This allows economists
to calculate the effect of exchange
rate changes on trade. Any
increase in the index is considered
favourable, because it means that
exports are valued higher than
imports.

C Where do you find imports?

You will find imported products in most shops. Read the label on the latest flat screen
television or a can of tuna from the supermarket. Most businesses carry a range of
products that are made both locally and overseas. Imported products can also be
bought online, or via telephone order, and delivered to the door.

Many products such as clothing and

Consumers can find imported petroleum are imported from overseas
goods in almost every store. countries.

40 Humanities Alive Economics & Citizenship 10 Second Edition


F Why do we import goods
and services?
Australia imports many products, and
does so for many reasons. Australian
producers may not make a product
as efficiently as it is made in another
country. Most electrical goods, for
example, are manufactured in Asia.
Imports are also brought into the
country to encourage competition
and lower prices. Examples of this are
displayed in our supermarkets, where
you will find many brands of one type
of food. Imports are also used as
ingredients or components in products
that are assembled in Australia. For
example, Australian juice companies
that have orange plantations here may
still import orange juice concentrate
from South America.
G How do imports affect the economy?
Spending on imports is generally higher than spending on exports. Bringing imports
into the country has both positive and negative effects for consumers and producers.
Positive effects
• There is an enormous range of
goods and services for consumers
to buy.
• It forces Australian producers to
make goods and services using
resources in the most efficient way,
as they have to compete against
cheaper imported products.
• Importing goods from other
countries encourages those
countries to buy our exports.
• Australian workers may move
overseas and learn other languages
and cultures.
• More trade between countries
encourages peaceful relationships
and cultural exchanges.
Hopeful people queuing for employment
Most of the electrical goods sold in
Australia have been imported from
overseas.
Negative effects
• Australian jobs may be lost to
countries with cheaper labour costs.
• Australian industries find it difficult to
compete with the lower production
costs of some overseas countries. This
leads to a closure of industries and
loss of skills.
• Money leaves the country to circulate
overseas, rather than in Australia,
affecting the exchange rate of the
Australian dollar.
• Imported resources may lower
employment opportunities for
Australian workers.
• Harmful animal species as well
as diseases, such as bird flu, may
be brought into the country in
various ways.
Student worksheet 
2.4, 2.5, 2.6
REMEMBER
1 In your own words, define terms of
trade, CAD, income, good, service.
2 Provide ten examples of imports
that you and your family purchase
regularly. Identify their countries of
origin.
3 List five stores in your local area
that stock imported products.
Name the stores and some of the
imported products they stock.
THINK
4 (a) Explain how the purchase of
imports can improve your
standard of living.
(b) Now explain how the
importation of goods and
services may reduce your
standard of living.
TEAMWORK
5 In groups of six, prepare for a class
debate on the topic: ‘That Australia
should import most of its required
goods and services’. Each group
must assign positive and negative
team roles and each team must do
its own research and preparation
in the given time. Draw lots to
see which two teams debate one
another.
DESIGN AND CREATIVITY
6 In pairs, design an advertisement
(web page, poster or radio
advertisement) to encourage
consumers to buy Australian
products. In presenting your design
to the class, explain why you think it
meets the brief’s requirement.
INQUIRE
7 Conduct some online research
to find out Australia’s current
(a) terms of trade index and
(b) CAD. You could start by using
the Austrade weblink in your
eBookPLUS. What conclusions can
you reach?
balance of payments  a statement
summarising the economic transactions
between the residents of a country and
those of other countries during a specific
period, usually a year
exchange rate  the rate at which one
currency is exchanged for another
Chapter 2: New wave economy 41
 2.5 Foreign currency
Australia participates in the global marketplace and is affected by changes in the
economies of other nations. The value of currency — our currency and foreign currencies
— also reflects changes in the global economy.

Every country has its own currency. worth US$75.) Alternatively, you might send money to
Australia has the dollar, Indonesia a relative in New Zealand. If A$1 = NZ$1.25, and you
the rupiah, South Korea the won, send A$1000, your relative would receive NZ$1250.
China the renminbi (or yuan), The exchange of currency happens in foreign
and so on. This list once included exchange markets, and major banks have specialist
currencies such as the French currency dealers who buy and sell foreign currency to
franc, the Italian lira and the make extra profits.
German deutschmark, but these When you are dealing in foreign currency, financial
were replaced in 2002 by a single institutions will generally offer you a buy rate and a
European currency, the euro (€). sell rate. The buy rate is the rate at which the bank will
It is sometimes difficult for buy foreign currency from you (for example, when you
importers, exporters and travellers return to Australia). The sell rate is the rate at which
to know exactly how much a you can purchase foreign currency (for example, before
local currency is worth. For this travelling or doing business overseas).
reason, exchange rates have been The sell rate is more likely to be higher than the
developed, which tell us exactly buy rate if the bank is keen to sell and not so keen to
how much a local currency is worth hold on to the currency. In contrast, the buy rate is
on overseas markets. more likely to be higher if the bank wants to hold the
currency because it is in high demand.
Currency details 1AUD 1AUD
at 27 April 2009 buys sells Taking the Australian dollar on holiday
USD United States Dollar 0.7130 0.7125
Some world events, such as the Boxing Day tsunami
JPY Japanese Yen 68.9500 68.9100
(2004), a terrorist attack (Mumbai 2008), or a military
EUR Euro Euro 0.5415 0.5410
takeover (Fiji 2009), lower holiday costs because of
GBP British Pound 0.4877 0.4876
CAD Canadian Dollar 08672 08668
lower demand. Tsunami-ravaged countries, for example,
HKD Hong Kong Dollar 5.5221 5.5202
are offering cheap deals as an enticement to encourage
INR Indian Rupee 35.6680 35.6510
travellers back to their resorts.
IDR Indonesian Rupiah 7730.6300 7721.3300
The best news for Australian overseas travellers,
MYR Malaysian Ringgit 2.5689 2.5646
however, is any increase in the strength of the Australian
NZD New Zealand Dollar 1.2641 1.2617
dollar in comparison to other currencies. The more
SGD Singapore Dollar 1.0650 1.0637 overseas currency an Australian dollar will buy you, the
ZAR South African Rand 6.3128 6.2397 cheaper your holiday.
CHF Swiss Franc 0.8151 0.8147 figure 1
THB Thailand Baht 25.2700 25.2400

Exchange rates vary constantly, but need to be easily

accessible for banks, businesses, investors and consumers.

The value of the Australian dollar greatly affects

purchasing power, especially if you are an exporter
who purchases components from overseas or you are
travelling through a country that has a very strong
currency in relation to the Australian dollar. For
example, if A$1 is worth 75 US cents and you want
to purchase a DVD recorder on the internet that costs Tourists need to understand the basics of exchange rates
US$210, this purchase will cost A$280. (A$100 is when on holiday overseas.

42 Humanities Alive Economics & Citizenship 10 Second Edition

Trade-weighted index
The trade-weighted index (TWI) enables Australians against a basket (group) of 22 other currencies — those
to quickly see whether our dollar is gaining or losing of our major trading partners. To ensure accuracy, each
value in comparison with other currencies. The index currency is weighted according to its importance to
shows the change in the value of the Australian dollar Australia’s overall trade position.
figure 2
Roy Morgan Consumer Confidence Rating
www.roymorgan.com
135.0
130.0
125.0
Consumer confidence

120.0
115.0
110.0
105.0
100.0 3–4 March 2012
(110.3 points, down 3.2 points)
95.0
90.0
85.0
80.0
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
(x4) (x4) (x5) (x3) (x5) (x4) (x3) (x5) (x4) (x3) (x4) (x4)

2008 2009 2010 2011 2012

Consumer confidence can affect the value of a currency and its exchange rate.

Consumer confidence
One of the most powerful influences on the value of as world markets move to buy other currencies such as
currency is consumer confidence. If consumers in the the euro. This, in turn, can hurt Australian exporters,
United States lose confidence because of, say, major because if the Australian dollar becomes stronger
corporate failures or even gloomy economic forecasts, against a weaker US dollar, our goods become relatively
this can lead to a decline in the value of the US dollar more expensive on world markets.

Student worksheet 
2.7

4 Explain how a fall in the value of the Australian

REMEMBER dollar may decrease living standards for
1 Define the following terms: Australian consumers.
(a) exchange rate 5 Which factors can influence banks in setting their buy
(b) foreign currency market and sell prices for foreign currency?
(c) trade-weighted index. 6 Describe what effect an increase in the worth of the
Australian dollar would have on the volume and value
THINK of our exports.
2 Calculate the value of each of the following 7 Look at the graph of consumer confidence rating
transactions, using the ‘buy’ and ‘sell’ figures shown in (figure 2).
the exchange rate table: (a) In what year was consumer confidence at its
(a) Adele converts A$1000 into US dollars. How much lowest? Suggest why.
does she receive? (b) What happened to consumer confidence after that?
(b) Katherine purchases a book from a Thai website for (c) At what point was Australia’s consumer confidence
100 baht. How much must she pay in Australian at its highest? Suggest reasons for this.
dollars? (d) How might the government react to low consumer
(c) Jon receives a birthday gift of 2000 yen from a confidence?
Japanese friend. How much, in Australian currency,
will he receive from the bank? consumer confidence  a measure, obtained through
3 Provide recent examples to explain what it means for a polling, of how people feel about the future of the economy
and their own financial situation
currency to weaken or strengthen.
currency  a system of money used in a country, or the notes
and coins themselves

Chapter 2: New wave economy 43

 2.6 Trade treaties and
cooperation
The 1980s saw the emergence of a new global economy, where geographical boundaries meant little in
terms of business opportunities. Where previously they had focused solely on their internal markets, Australian
producers started looking further afield for people to buy their merchandise (goods and services offered for
sale) — promoting university degrees to students in China, selling wine to the Italians, producing cars for the
deserts of Dubai. Australian businesses have become flexible and adventurous exporters.

The difficulty, however, is that
the international markets are not
‘level playing fields’. Many overseas
governments protect their local
producers by imposing high tariffs
(tax or duty imposed on goods
and services being imported into
a country) or quotas (restrictions
placed on the volume of specific
goods that may be imported or
exported). The task for Australian
governments is to convince others
to reduce such barriers.
figure 1
Lower wages enable this Chinese shirt
factory to produce garments at a very
competitive price.
Importance of economic
cooperation
There are four major benefits in the
economic cooperation of countries
through trade.
1. Governments communicate on
a regular basis. This encourages
mutual understanding and an
appreciation of differences and
similarities. Local businesses
with international branches
also provide opportunities for
Australians to live and work in
other countries.
2. Trade agreements with
other countries help less
developed nations to become
more financially stable. This
promotes economic growth
and employment, increasing
demand for goods imported
from Australia.
3. International markets are
more accessible to Australian
producers. In this way, businesses
can achieve economies of scale
(a reduction in production
costs per item, brought about
by producing goods in larger
numbers) that would not be
possible if they produced only
for the Australian market. This
improves production efficiency
and creates employment in
Australia.
4. The money earned by Australian
companies through exports flows
back into Australia, improving
our economic situation.
Potential problems
If Australia wants entry to other
markets through reduced tariffs and
the removal of quotas on imported
goods, it must also be willing to
do likewise. The problem is that
wage levels and business costs are
often much higher in Australia
than in many overseas countries.
To remove tariffs on imported
goods effectively reduces their
price and, with high overheads (the
general recurring costs of running
a business, excluding the costs of
labour and materials, e.g. rent,
maintenance and utilities), some
Australian employers simply
cannot compete, and close down.
This has been particularly evident
over the past 20 years with the
closure of many businesses in the
textiles, clothing and footwear
industries.
With cheaper imports arriving
from overseas countries where wage
rates and costs are lower, Australian
manufacturers simply could not
compete.
Critics of globalisation argue
that, until such time as all nations
have the same wage levels and
employee rights, there will never
be a level playing field. If the
hourly wage rate for a factory
worker is A$5 in Malaysia,
but A$25 in Australia, then
it is impossible for Australian
manufacturers to compete on these
terms. In contrast, others argue
that international competition
has forced Australian companies
to be smarter: to increase
productivity, develop sophisticated
manufacturing processes and find
niche markets for their goods.

44 Humanities Alive Economics & Citizenship 10 Second Edition

 Asia–Pacific Economic would mean that economies in the
region could trade goods and invest
Cooperation (APEC) money freely without any barriers REMEMBER
Forum being imposed by governments. 1 In your own words, define:
(a) treaties
On 15 November 1994, the The pace of reform takes into (b) quotas
economic leaders of APEC came account differing levels of economic (c) economies of scale
together at Bogor, Indonesia, to development among APEC (d) tariffs.
economies, with the industrialised 2 Explain the term ‘level playing
chart the future course of economic field’ as it relates to international
cooperation in the Asia–Pacific economies achieving the goal of
trade.
free and open trade and investment
region. The leaders expressed their THINK
no later than the year 2010, and
intent to: 3 Suggest why APEC was formed.
developing economies no later
• support the world economy and 4 Do you think it is possible for
than the year 2020. trade to be undertaken on a level
an open trading system The 21 APEC member playing field? What factors prevent
• continue to reduce barriers to economies, representing a region economies from being able to
trade and investment to enable with a population over two billion, compete freely and openly?
goods, services and capital to collectively account for more COMMUNICATE
flow freely among its economies than half the world’s total gross 5 (a) Use the APEC weblink in your
• ensure that people share the domestic product (GDP) and eBookPLUS to find the 1994
benefits of economic growth over 47 per cent of total world Leaders’ Declaration and then,
• improve education and training in your own words, explain
trade. Between 1989 and 2009, the vision that APEC has for the
• link APEC economies through for example, trade in services economic future of the Asia–
advances in telecommunications for APEC economies more than Pacific region.
and transportation tripled. The word ‘economies’ is (b) Explain how this vision could
• promote sustainable used to describe APEC members lead to improvements in the
standard of living for the people
development. because the APEC cooperative in the region.
APEC has announced a process is predominantly
INQUIRE
commitment to achieving the concerned with trade and
6 In small groups, discuss how
goal of free and open trade and economic issues, with members APEC goals might affect lifestyles
investment in the Asia–Pacific engaging with one another as in Australia by 2020. Consider
region no later than 2020. This economic entities. factors such as consumer choice
and the impact on local Australian
figure 2 APEC member countries, 2009 businesses.
7 Use the World Trade Organization
weblink in your eBookPLUS, and
make notes on the following
questions:
(a) What are the main functions of
RUSSIA the WTO?
(b) How many nations are
CANADA members of the WTO?
(c) In your own words, outline
UNITED STATES
OF
three of the benefits of the WTO
SOUTH
CHINA KOREA
JAPAN
AMERICA trading system.
Submit your answers to your teacher
TAIWAN
HONG KONG
as an attachment to an email.
MEXICO
VIETNAM
THAILAND PHILIPPINES
BRUNEI
MALAYSIA
SINGAPORE PAPUA NEW GUINEA
developing economies  economies that are
INDONESIA PERU emerging from an underdeveloped stage and
are showing growth in key industries such as
AUSTRALIA tourism, agriculture or telecommunications
CHILE
industrialised economies  economies
that have a solid manufacturing industry and
NEW ZEALAND significant infrastructure for the production of
KEY
goods and services
APEC member countries 0 1000 2000 km

Chapter 2: New wave economy 45

 2.7 Free trade agreements
TV turmoil
The worst fears of TV producers and film-makers were Alan Fletcher, who plays Dr Karl on the soapie Neighbours,
realised when federal government officials revealed that and who is President of the Victorian Media Entertainment
the Australian entertainment industry would be included and Arts Alliance, said, ‘. . . many of our much-loved Aussie
in a free trade agreement (FTA) with the United States. dramas could not compete against the high-budget overseas
Currently, Australia has a range of media regulations, product that is available to Australian television stations at
including guidelines that television broadcasters are required bargain basement prices. Most American TV shows and
to screen 55 per cent Australian content between the hours of films return their costs of production in their massive home
6 am and 11 pm and approximately 200 hours of Australian markets, meaning they can be sold to the world for a fraction
drama programs annually. of the cost of manufacturing local drama. In most sectors,
In negotiations with the United States, Australia was this would be called “dumping”. The economic incentive
reluctant to include entertainment as an area over which for television broadcasters to show foreign product is huge,
FTAs could be made. However, the United States and the and without regulatory protection Australian shows would
World Trade Organization stated that the term ‘free trade’ face extinction.’
meant exactly that — the free and open exchange of goods If an FTA was to be signed with the United States, support
and services, and control of industries, such as entertainment, that is currently given to the entertainment industry (such
that reflect and support a nation’s culture. as the Film Finance Corporation’s investments in Australian
In his speech to the US Congress during the FTA films) might become illegal. This is because such funding
negotiations, the American representative, Robert Zoellick, might be regarded as giving an advantage to local filmmakers
stated that the agreement was about gaining access to that overseas corporations do not share.
Australian markets for large US corporations in sectors such Once an FTA is signed, there are major implications
as entertainment, telecommunications, education, health for governments. If corporations in other countries believe
and pharmaceuticals. To gain this access, Australia would that the Australian government has created laws that give
need to reduce barriers that include strong quarantine local industries an unfair trade advantage, they can claim
laws, our Pharmaceutical Benefits Scheme (by which the damages through legal action before a tribunal. Damages
Australian government regulates the supply of prescription in this case involve financial payments that might run to
drugs), the labelling of genetically modified food, and local millions of dollars.
content laws for film and television. The United States also In effect, once the FTA is signed, Australian governments
requested access to Australia’s service sectors such as post, would be prevented from making new laws to protect our
education, health and water. local industries.
The entertainment industry figure 1
in Australia has expressed
concerns regarding the future
direction of FTA negotiations.
The Australian Film Com­
mission, for example, has argued
that the United States already
commands a large proportion
of the Australian film and TV
market, and does not need an
FTA to gain greater access to
our market. According to the
AFC, in the four-year period
from 1998 to 2002, average TV
and film exports from Australia
to America amounted to
$29 million a year. In contrast,
we imported $282 million
annually from the United States. Happy news for characters in a Neighbours episode

46 Humanities Alive Economics & Citizenship 10 Second Edition

figure 2
Free trade agreements may increase Australian wool exports.
What are the benefits of free trade?
Although there are concerns over the real impact of
FTAs, there are still benefits for Australians in emerging
technologies such as broadband websites, data casting
and interactive television. These promise to be multi-
billion-dollar industries in the twenty-first century and,
if we are innovative in our design and clever in our
marketing of products, the US market offers scope that
we previously could only dream about. In 2003 and
REMEMBER
1 In your own words, define:
(a) free trade agreement
(b) damages.
THINK
2 Outline three advantages to Australian exporters of a
free trade agreement with a huge country such as the
United States.
3 What particular concerns have been raised by the
Australian entertainment industry over an FTA that
covers film, television and live performance?
TEAMWORK
4 Working in groups of four, discuss the following
questions. One student in the group is to make notes
for the purpose of reporting your ideas to the class.
2004, Australia spent much time negotiating FTAs,
and one of the main successes was a deal made with
Thailand that saw once-restricted markets in textiles
and food being opened up.
In general terms, FTAs cover goods and services of
all kinds. An FTA with the United States should be
of great benefit to Australian exporters in areas such
as wool, where significant barriers are currently being
imposed by the US government.
(a) Would you like to see more Australian content on
television?
(b) Should governments specify a minimum Australian
content level for commercial television?
(c) Does the fact that a film is made in Australia make it
more likely that you will watch it?
(d) How concerned would you be if a US corporation
proposed to purchase an institution such as
Australia Post, or purchase a controlling interest in
our water-supply network? Explain.
5 Rework question 4 into a survey and add two or three
questions of your own. Each member of the class is
to survey between five and ten people. Collate the
findings of your group of four and present them as a
computer-produced document.
Chapter 2: New wave economy 47
 2.8 Environmental sustainability
of the fishing industry
For some fish products, demand is outweighing supply, driving prices up. This is forcing commercial fisheries
to develop new technologies to maximise catches to take financial advantage of the growing demand. Pirate
fishing boats are adding to the pressures on the marine environment. The impact on the environmental
sustainability of the industry, in its present form, is a matter for concern.
figure 1

‘The big fish, the bill fish, the

groupers, the big things will
be gone. It is happening now.
If things go unchecked, we
will have a sea full of little
horrible things [e.g. jellyfish]
that nobody wants to eat. We
might end up with a marine
junkyard dominated by
plankton.’
Prediction of marine scientist
Dr Daniel Pauly of Canada’s
University of British Columbia,
based on his team’s analysis
of 50 years of UN Food and
Agriculture Organization data

maximise fish catches, using facilities such as fish-

Overfishing is the biggest single threat to the
sustainability of marine environments today. UN Food
and Agriculture Organization data indicate that some
70 per cent of the world’s fisheries are either in a state of
collapse or heading that way, with many species already
fished into extinction. With local fishing grounds
becoming depleted, many fishing fleets head for the
Pacific Ocean where stocks of fish such as tuna are still
abundant. However, as the world’s population continues
to grow, and as demand for fish continues to increase,
even these areas may eventually become exposed
to overfishing.
Effects on local fishing industries
The factor that contributes most to the problem is
the unregulated increase in commercial fisheries using
high-technology boats. These boats are designed to
finding sonar, onboard processing and packaging plants,
and huge freezing systems. They can severely reduce fish
resources. From an economic viewpoint, huge catches
are needed to secure profits and recoup the high capital
costs invested in these boats.
There is also the problem of waste — it is estimated
that, each year, these vessels catch some 30 million
unwanted sea creatures. Most are left to die and then
are tossed back into the sea.
The economies of small Pacific countries are also
affected by current fishing practices. Vessels from local
Pacific countries are estimated to take catches of about
200  000 tonnes of tuna a year from Pacific waters,
whereas vessels from distant nations (commonly using
industrialised fleets) take about nine times as much.
This makes it much harder for these smaller Pacific
nations to build up trade exports and thus create wealth
for their country.

48 Humanities Alive Economics & Citizenship 10 Second Edition

 figure 2
Pirate fishing
Pirate fishing vessels continue to operate in defiance
of attempts by governments to close them down. The
market value of their catch in the central and western
Pacific alone is estimated to be between US$134 million
and US$400 million each year — more than all
Pacific Islands countries can earn in access and licence
fees. Single bluefin tuna have sold for more than
US$100  000 on the Japanese sashimi (raw seafood)
market. The motivation to make this sort of profit
outweighs the legal risks for many fishing operations.
Pirate fishing boats typically fish in restricted areas
and often destroy species other than those they seek, as
they use huge nets to maximise the catch.
Among those caught are fish too young to breed
(thus reducing breeding stock) and fish species on the
An Australian Fisheries Management Authority (AFMA)
verge of extinction. Estimates suggest, for example, that officer boards an illegal fishing boat, the Indah Jaya Baru,
about 90 per cent of the Patagonian toothfish, currently apprehended in July 2006.
heading for commercial extinction, is taken by pirate
fishing vessels. decrease of over 30 per cent, partly as a result of the
Australian government’s restriction of the industry.
Impacts on Australia A $220 million package for the fishing industry was
Australia’s commercial fishing industry ranks fifth in introduced as part of the government’s plan to reduce
value among its rural industries after beef, wool, wheat overfishing in waters around Australia.
and dairy. Australia is one of the largest producers Overall, the fishing industry requires a fine
of abalone, rock lobster and South Sea pearls. The balance between the demands of consumers and the
government relies on these industries to help reduce preservation of the environment. Many research reports
its current account deficit. However, in recent years, indicate that the oceans cannot replenish fish stocks at
fishing industry production has been falling in volume the rate they are currently being fished.
and real value from a high of A$2.8 billion in International laws regulate the industry, but policing
1999–2000 to A$1.7 billion in 2006–07. This is a these laws is difficult and often inadequate.

Student worksheet 
2.8

REMEMBER continue. Should bans be introduced, or should areas

1 In your own words, explain the term environmental be off limits to any sort of fishing? How is piracy to be
sustainability. Use it in a sentence in relation to the controlled? What economic impacts (both short and
overfishing of our oceans. long term) might such actions produce?
2 Why does the price of a particular type of fish rise as it
ICT
becomes less available?
6 Use key terms such as overfishing and global fishing
THINK crisis to conduct further research on fishing in the
3 Do you think economic prosperity and environmental Pacific Ocean. Prepare a carefully planned web page on
sustainability are goals that can coexist? Explain, with your findings that covers:
reference to current fishing practices in the Pacific. • the impact of large-scale commercial fishing on the
4 Draw up a two-column table in your notebook. In it list environment and the economy
all the costs (negative impacts) and benefits (positive • why pirate fishing ships add to the problem
impacts) of large-scale fishing in the world today. Think • why sustainability of marine environments is being
particularly of economic impacts and outcomes. threatened
• what citizens and governments could do to improve
COMMUNICATE the situation.
5 Decide, through group discussion, whether you Show your completed web page to a partner and
think large-scale fishing in its current form should provide each other with constructive feedback.

Chapter 2: New wave economy 49

 2.9 Made in China
China has become an increasingly powerful global economic player in recent years. Although the country still
has a communist government, its rapidly growing levels of trade, and the increasing demands of Chinese
consumers, are more typical of the economic behaviours of Western capitalist countries.

A changing economy
China was once a protected economy: the government
owned all the resources used to make goods and
services, and decided what types of products would be
made. As the country has moved increasingly into the
global marketplace, it has stepped up its production
and exports, and has begun to encourage the import of
goods and services.
Although China was hit hard by the worldwide
economic downturn, China’s economy still grew at
about 8 per cent in 2009 (greater than predicted in the
article at right). This was much faster than other large
economies in the world, such as those of the United
States and European Union, which were in recession.
While significant volumes of trade created trade
surpluses of almost of US$300 billion in 2007,
China’s exports and imports of goods and services fell
by about 25 per cent in 2009. Despite this decline,
China’s ability to manufacture goods and services on
a huge scale is maintaining its power and influence
as a major player in the global economy. This affects
the economies of countries such as the United States
and, of course, Australia. China’s increased demand for
petroleum and oil products was partly responsible for a
sharp rise in the worldwide price of petrol, particularly
in the early part of 2009.
figure 1
World Bank sees China
recovery this year
Jonathan Watts in Beijing
The Chinese economy is likely to recover by the second half
of this year and could help to pull Asia out of its slump, the
World Bank forecast today.
Despite the contraction in overseas markets, the bank
said Beijing’s pump-priming measures would enable China
to secure a growth rate of 6.5% this year.
‘A ray of hope may be emerging with signs of China’s
economy bottoming out by mid-2009,’ the bank said. ‘A
recovery in China, fuelled largely by the country’s huge
economic stimulus package, is likely to begin this year
and take full hold in 2010, potentially contributing to the
region’s stabilisation, and perhaps recovery.’
With gross domestic product (GDP) in other leading
industrialised nations expected to contract, growth in
China will be a welcome boost to the world economy and
a further sign of its rising influence.
China has had double-digit growth for most of the past
30 years but its export sector, which accounts for 40% of
GDP, has been hurt by the decline of demand from Europe,
North America and Japan. In February, exports declined
by 25.7%.
To make up for the shortfall, the government is pumping
4 trillion yuan [A$825bn] into spending on public works,
consumer subsidies and other economic stimulants.
Bank lending has increased and demand has grown for
steel and power.
Premier Wen Jiabao said further pump-priming was
possible if the world economic crisis worsened.
Source: guardian.co.uk, 7 April 2009.

Chinese and world crude steel production

(million tonnes)

2002 2003 2004 2005 2006 2007 2008

China 182.2 222.4 280.5 355.8 423.0 489.2 502.0

World 904.1 970.0 1068.9 1146.5 1250.9 1345.4 1329.7

Source: Figures from World Steel Association.

Chinese factory workers such as these help China to China’s production of steel increased dramatically, reaching
produce goods on a huge scale and at little cost, because over a third of the world’s steel production in 2008, before
of low labour costs. Many goods, with well-known brands, declining as a result of the impact of the recent world
carry the label ‘Made in China’. recession.

50 Humanities Alive Economics & Citizenship 10 Second Edition

 figure 2
Australia’s trade
with China REMEMBER
With China’s everexpanding 1 In broad terms, how has China’s
economy changed in recent
population and an increasing
years?
demand by China for goods 2 By approximately how many
purchased outside its borders, the million tonnes did China’s steel
Australian government has been production change between
keen to secure Australian exports 2002 and 2007?
to China as well as investment THINK
opportunities in China for 3 (a) Suggest why Australia would
Australian companies. Ongoing be so keen to establish a
free trade agreement talks have bilateral trade agreement with
been taking place on a regular On 10 April 2008, Chinese Premier China.
basis between China and Australia, Wen Jiabao and former Australian (b) In what ways might such an
aimed at reducing barriers to free agreement benefit (i) Australia
Prime Minister Kevin Rudd emerged
and (ii) China?
trade between the two nations. from a meeting in Beijing saying they 4 (a) In what ways is your life like
want a stronger relationship between and unlike the life of Yuan
their two countries. Wong? Explain.
(b) What short- and long-term
Hi! My name is Yuan Wong. I have been studying
benefits do you think are
in Australia for the past two years. I am currently provided when students of
completing my VCE at a private school in Melbourne, but one country study in another?
I travel home to China for each holiday.
  In China I live in a small apartment with my parents. COMMUNICATE
I do not have any brothers or sisters, and both of my 5 Discuss these questions in small
parents work to pay for my education in Australia. My groups:
father has his own engineering business; my mother (a) Why do you think China has
works in a factory. We have a happy life in China
become so economically
compared with most people, as my father’s income is
very good. The average monthly income in China
powerful so quickly?
is 1820 yuan, with living expenses totalling 808.17 yuan. (b) What potential implications
  The value of the Chinese yuan has recently been does China’s rapid economic
increased, which means when I exchange my Chinese growth have for the future
yuan for Australian dollars, I get more dollars than before. It gives me more money to spend! balance of power in the world?
  In Australia I stay in a boarding house at the school. I love the open spaces in Melbourne, (c) How important is a Chinese
and when I shop in the city there are not so many people in the streets as there are back economic recovery for
home. There is a huge range of goods and services to buy in Australia, more varied than in
Australia?
China. We do have lots of imitation products in China, though, that are very cheap to buy.
Labour’s much cheaper in China than here. 6 (a) Check the goods and
  When I finish my education I plan to go back to China to work as an accountant. There will possessions you have in your
be a great many opportunities for work in China as the country’s economy continues to grow. house and list those labelled
‘Made in China’. Develop a
class list. What conclusions
can you reach?
Commodity exports tipped to slump (b) As part of the class discussion,
can you suggest any services
Commodity exports from Australia, Global economic growth is forecast
that Australia and China might
the world’s largest shipper of iron ore, to fall to 0.6% in 2009, before rising to exchange? Why?
coal and wool, are forecast to decline in 3% in 2010, led by China and India,
fiscal 2010 for the first time in six years the bureau said. INQUIRE
before rebounding the following year ‘The recovery in world economic 7 Conduct internet research to find
as the global economy recovers. performance is expected to begin in out:
Lower prices for iron ore, coal and late 2009–early 2010,’ said the bureau, • what China’s major exports and
crude oil are forecast by the [Australian which expects Australia’s exports of major imports are
Bureau of Agricultural and Resource commodities to rebound to $166 bil­ • what major items (goods or
Economics (ABARE)] to drive the lion in 2011. ‘Without a significant services) Australia exports to
decline in Australia’s commodity improvement in the world economic China and imports from China.
exports, slashing profits at mining outlook, a substantial strengthening Write a short report on your
companies such as BHP Billiton and in world mineral and energy prices findings. Make sure to properly
Rio Tinto. appears unlikely in the short term.’ document the sources of your
Source: The Age, 3 March 2009.
information.

Chapter 2: New wave economy 51

 2.10 The rise and rise of TNCs
Here is the view of David Korten (pictured right), an economist and
internationalist: ‘We have a world in which a handful of corporations,
detached from any link to any place or community, have extended their power
beyond the reach of most governments.’ What do you think this means?
A transnational corporation (TNC)
is a large business organisation that
has a home base in one country
and operates partially owned or
wholly owned businesses in other
countries. The TNC represents the
highest level of involvement in global
business, where national borders do
not represent barriers to trade, but
instead are seen as merely lines drawn
on a map. Consequently, TNCs
conduct a large percentage of their
business outside their home country.
figure 2
Neon signs in London show a
number of examples of TNCs.
TNCs come in many different
forms. Sanyo, McDonald’s, Unilever,
Ford, News Corporation and BHP
Billiton are just a few of the well-
known foreign and Australian
transnational corporations.
According to the United Nations
Committee on Trade and
Development (UNCTAD), the
current value of global production
from around 53  000 TNCs and their
450  000 subsidiaries (companies
owned by the TNCs) is more than
US$10 trillion.
52 Humanities Alive Economics & Citizenship 10 Second Edition
World’s largest corporations and
their revenue (2008)
Revenues
Company (US$ millions)
Wal-Mart Stores 378  799
Exxon Mobil 372  824
Royal Dutch Shell 355  782
BP 291  438
Toyota Motor 230  201
Chevron 210  783
ING Group 201  516
Total 187  280
General Motors 182  347
ConocoPhillips 178  558
Source: CNNMoney.com.
The annual turnover (earnings)
of TNCs such as General Motors
is more than the gross domestic
product of most countries.
Although TNCs attract criticism
for their wealth and power, they
do play a major role in the world
economy:
• Approximately 65 per cent of all
international trade is undertaken
by the top 500 corporations
• Around 40 per cent of world
trade is between a parent
company and its subsidiary
located in another country. For
example, some components of
the Pontiac GTS, a car made
in South Australia by General
Motors Holden for the American
market, are imported into
Australia. The finished vehicle
is then exported to the United
States for sale by General Motors.
• Parent companies and their
subsidiaries also share intellectual
property such as design and
technology concepts. This helps
less developed economies become
more advanced. The flow of ideas
and talent is also supported by
figure 1
David Korten
the movement of staff between
countries, while they remain
employed by the same TNC.
• The standard of living of people
in less developed countries can be
improved through investment and
employment created by TNCs.
Ethical issues
Cheaper communi­cations and
transport have paved the way for the
explosion of TNC production in
low-income countries. The desire for
greater profit margins has sometimes
resulted in the use of sweatshops,
especially in the clothing industry.
Working conditions in sweatshops
are often inadequate (e.g. poor
ventilation and lighting). In some
cases, workers are forced to work
overtime with restricted toilet breaks.
Sweatshop workers are usually
not employed directly by TNCs.
However, the TNCs buy their
garments from the companies that
do employ them. The garments then
find their way into fashionable shops
in Melbourne and Sydney, carrying
labels that are instantly recognisable.
In Suva, Fiji, thousands of
workers make clothes for the
Australian market. Workers toil
for between $1 and $1.50 an hour,
whereas Australian textile workers
earn $13 an hour.
 Student worksheet 
Regulating the activities of TNCs 2.9

As a result of international concerns over the activities of some TNCs, the Remember
United Nations identified some key responsibilities for large transnational 1 Define the following terms:
corporations. These are detailed below. (a) transnational corporation
(b) parent company
1.  Do not use forced or compulsory labour. 4.  Pay workers enough to ensure an (c) subsidiary.
adequate standard of living for them 2 Outline three ways that TNCs
2.  Respect the rights of children to be
and their families. contribute to world economic
protected from economic exploitation.
5.  Recognise the rights of employees growth.
3.  Provide a safe and healthy working to join unions and other collective 3 (a) What is a ‘sweatshop’?
environment. bargaining organisations. (b) Describe working conditions
in a sweatshop.
4 What is the link between TNCs
figure 3
and sweatshops?
THINK
5 (a) Why do you think that TNCs
have moved production of
their clothing offshore?
(b) What impact does moving
offshore have on (i) clothing
industry workers in
developed countries,
(ii) clothing workers in
India and other low-income
countries, and (iii) consumers
who purchase the low-cost
items in Australia?
6 (a) Why do you think the United
Nations thought it necessary
to draw up a code for TNC
behaviour?
Workers inspect shoes at a Reebok shoe factory in Zhongsham, China (b) What short- and long-term
benefits do you think could
result for a TNC that always
The following is a comment about the topic of overseas sweatshops behaved ethically and
posted by Peg Seriani in the Debate Room of Business Week, respected human rights?
5 June 2007. INQUIRE
.  .  . my class just returned from a trip to China. While in Xian, we visited 7 Use the McDonald’s weblink
in your eBookPLUS to research
a textile factory and saw the conditions of a sweatshop firsthand. Our short the work that McDonald’s
tour through the factory floor was just unbearable. I can’t imagine working undertakes in the community.
there every day for the rest of my life. The [main] point that I walked away In approximately 300 words,
with was that the documentaries and news articles about sweatshops are explain the extent to which you
nothing compared to visiting them in person. The noise from the hundreds believe the company upholds
of 50-year-old spinning and weaving machines was so loud we could not the TNC responsibilities set
have yelled to each other over the noise. It was deafening. The workers did down by the United Nations.
not wear any hearing or breathing protection. The air was thick with cotton
fibers. Our faces and eyes were irritated from the floating fibers. Visually, it
was the most depressing place I have ever seen. I will never forget that tour collective bargaining  negotiation
and the vacant look of all the workers there. I absolutely think .  .  . businesses between an organised group of workers,
or union, and their employer
have a responsibility to make sure that their suppliers’ working conditions
intellectual property  ideas created
are humane, just as we expect them to be here .  .  . companies should not put and owned by an individual or company
unreasonable price pressures on their foreign suppliers, because the savings parent company  the major (or
will only come off the backs of the disadvantaged workers. Based on what head) company that establishes smaller
I saw, I’d sum it up by saying that, saving an extra $5 on a T-shirt probably companies (subsidiaries) to handle
particular operations
costs a worker 10 years of his or her life from a lifetime of working in a subsidiary  a company established by
horrible environment. a parent company to handle particular
Source: Business Week Debate Room, www.businessweek.com. aspects of its operations

Chapter 2: New wave economy 53

 2.11 TNC case study —
the Nokia story
Do you have a mobile phone? Where is it now? Which brand is it? The Nokia phone company is a
multinational corporation with operations and sales throughout the world.

Nokia operations hundreds of thousands of specialised phones for each

carrier. This can mean that a carrier can have a unique
Nokia is a Finnish company that has not always
faceplate with its logo, or special keypad buttons.
produced phones. It has been in operation for over
140 years and produced a variety of goods including
figure 2
cables, toilet paper and rubber boots.
In the early 1990s, Nokia reinvented itself and
started focusing on technology in the mobile phone
industry. With this change in focus, the company
began operations as a multinational business, operating
factories and selling its product worldwide. A Boards and parts are sent to
each factory to be assembled.
This did not come without its problems. The
popularity of a mobile phone and the Nokia brand
meant that in 1996 the company did not have the
factories capable of producing the number of phones
demanded. In response to this it began the globalisation
of the Nokia operation.
Nokia has nine major handset factories as shown on
the map in figure 1.
B Both computers and
workers are used to
figure 1 Nokia handset factories assemble the phones.

3 def
1 2 abc
6 def
5 abc
4 ghi
9 def
8 abc
7 pqrs
#
0
*

C Small circuit boards are

integrated by hand into
each phone.

Making a mobile
The factory in Finland is responsible for making
the key technical components of the phone that
make its unique features. These are then shipped to
other factories that assemble the telephones. This D Before each phone goes out,
its quality is checked.
is in response to a demand by telecommunications
companies for telephones that have key features under
that particular brand.
Nokia takes orders from the carriers (e.g. Vodaphone)
into its production system and transforms them into Making a mobile

54 Humanities Alive Economics & Citizenship 10 Second Edition

The costs of operation
It costs on average $90 to produce a telephone,
although this can vary from $20 to $130 depending
on the features of the telephone. Nokia then sells its
product for 33 per cent more than its production costs.
Environmental issues for Nokia
Nokia is aware of the impacts its products have on the
environment. Although environmental concerns are
built into its operations throughout the product life
cycle, such as design, production and minimal use of
energy, there seem to be other global environmental
impacts associated with consumer use and disposal of
old models. Recycling has helped to reduce the landfill
waste associated with the level of technological progress
that has taken place.
figure 3
The disposal of old mobile phones had a significant impact
on landfill waste. Now they are recycled.
The demand for mobiles
In 2008, more than 1.22 billion mobile phones were
sold across the world, 6 per cent more than in 2007.
However, in the last part of 2008, sales declined
significantly because of the global economic downturn.
In terms of brands, Nokia is the most popular
mobile on the global stage. In 2008, the company sold
472.3 million mobile phones, followed by Samsung
with 199.1 million, Motorola 106.5 million, LG
102.5 million and Sony Ericsson 93.4 million. All
other companies accounted for 248 million units sold.
The future
The global mobile market is now changing and many
markets have reached saturation point. The future rate
of growth in the mobile phone market is expected to
slow down, and Nokia is incorporating this into its
future sales forecasts.
Student worksheet 
2.9
REMEMBER
 1 Is Nokia a large or a small global company?
 2 How has the Nokia company changed its
production?
 3 Who are Nokia’s competitors?
 4 How is a mobile phone made?
UNDERSTAND
 5 Why does Nokia produce phones worldwide
and not just in Finland?
 6 What are the benefits of producing goods and
services in Asia for any company? Do you think
these benefits will always last?
INVESTIGATE
 7 There are global regulations regarding the
operation of transnational companies. Use the
Nokia weblink in your eBookPLUS to identify
whether the company is:
(a) respecting the rights of its labour force
(b) providing a safe and healthy work 
environment
(c) paying workers a sufficient wage.
 8 The disposal of mobile phones has been a
problem in the past, and now mobile phones
are recycled. Investigate how mobile phones
are recycled and the impact this has had on the
environment. What would you recycle mobile
phones into?
DESIGN
 9 Design and make a model of a mobile phone
that competes against a Nokia phone. Prepare an
advertising campaign to encourage consumers
to purchase your phone.
10 Prepare a flowchart or map that shows how
another multinational corporation operates
throughout the world. You could use Nestlé or
Ford, or use the internet to find examples of 
others.
multinational corporation  a company that operates in
a number of different countries
Chapter 2: New wave economy 55
 Check and challenge
1 For each of the following statements, match the most
appropriate word or term from the box below:

Following a terrorist threat, we are likely to see a fall in

____________  ____________ . (p. 40) 3 Tourism is one of Australia’s largest export earners,
Our exporters perform better in markets when the A$ is with tourism exports expected to reach $32.1 billion
____________. (p. 42) by 2014.
Rapid international exchange of resources and data has led to (a) Why is it so important for governments to
____________ . (pp. 34–5) support export industries such as tourism?
Exchange rates are set by ____________  ____________  (b) What might be the impact on our balance of
____________ . (pp. 42–3) trade if Australia suddenly became a less desirable
If imports are greater than exports, an economy will have a tourist destination because of the global financial
____________  ____________ . (pp. 38–9) crisis? (pp. 38–9)
Governments should preserve resources to aim for ____________  4 In 2004–05 Australian merchandise exports
____________ . (pp. 48–9) totalled $126  703 million, and merchandise
Non-tariff barriers relate to limits on the volume of imports, known imports totalled $149  519 million. Did Australia
as ____________ . (pp. 44–5) have a merchandise trade deficit or surplus, and
Exports create employment and investment, and contribute to a
what was it? (pp. 88–9)
strong ____________  ____________  ____________ . (pp. 38–9) 5 Use the following information to answer the
questions that follow.
Xerox is an example of a ____________  ____________ . (pp. 52–3)
Consumers who purchase foreign currency should enquire about Australia’s main export merchandise destinations,
the bank’s ____________  ____________ . (pp. 42–3) 2007-2008
High tariffs are an example of a government policy of Japan 9% United States 6%
____________ . (pp. 44–5)
After two or more periods of negative growth, an economy is in China 15% New Zealand 5%
____________ . (p. 39)
New opportunities for digital technologies have opened up owing to Republic of Korea 8% Other 47%
increased ____________  ____________ . (pp. 44–5) Source: From ABS data on the DFAT STARS database.
Governments enter into trading deals known as
____________  ____________  ____________ . (pp. 46–7) Australia’s main import merchandise sources,
2007-2008
Environmental issues need to be considered to achieve
____________  ____________ . (p. 34) United States 12% Germany 5%

free trade agreements gross domestic product China 15% Singapore 7%

protectionism environmental sustainability
recession foreign currency markets Japan 10% Other 51%
weaker sustainable development Source: From ABS data on the DFAT STARS database.
quotas trade deficit
globalisation sell rate (a) Which country received the biggest share of
consumer confidence niche markets Australia’s export merchandise in 2007–08?
transnational corporation
(b) From which country did Australia receive its
largest share of merchandise in 2007–08?
2 Write the following words in full sentences to show (c) What percentage of Australia’s export
their meaning: merchandise went to China, Japan and the
tariff; balance of trade; environmental Republic of Korea? What does this suggest
sustainability; free trade agreement; transnational about Australia’s current trade relationships
corporation. with Asia?

56 Humanities Alive Economics & Citizenship 10 Second Edition

 Australian killed in Mumbai
terrorist rampage: PM
[Former] Prime Minister Kevin Rudd has confirmed that at least Firing was also reported at Cama Hospital in south Mumbai,
one Australian has been killed in a terrorist attack in India .  .  . and three people were reported killed in what police called a ‘bomb
Mr Rudd said Australia had offered India assistance to help blast’ in a taxi in the south-east of the city .  .  .
during the crisis, including sending police .  .  . A 12-member NSW government trade mission had been
Teams of attackers stormed into two luxury hotels, a restaurant staying at the Oberoi Trident Hotel .  .  . Australian actress Brooke
and the main Chhatrapati Shivaji railway station overnight .  .  . Satchwell has told how she hid inside a tiny bathroom cupboard
Eight other locations across Mumbai, including the train station, for about an hour to escape gunfire at the Taj hotel.
a hospital and an up-market restaurant were hit .  .  . ‘It was really terrifying,’ she told Network Ten .  .  . ‘There was
Senior police official AN Roy said about 100 people were killed someone dead outside the bathroom.’
in precisely-timed assaults by small groups of gunmen who lobbed The attacks have sparked a chorus of global condemnation .  .  .
grenades into crowds and opened fire with AK-47s on people as India has witnessed a wave of coordinated attacks in recent
they fled on Wednesday night. months.
The number of injured is unclear and has been put at at least
100, and up to almost 300. They include two Australians who
were shot as they dined at the popular Cafe Leopold in the heart
of Mumbai, hours after they arrived in the city .  .  .
Witnesses said the gunmen had specifically chosen US and
British citizens to take hostage, and some foreign tourists are
reported to be among the dead .  .  .
Frequent bursts of gunfire in and around the two five-star
hotels continued to be heard on Thursday morning.
The head of Mumbai’s Anti-Terrorism Squad, Hemant Karkare,
was one of at least 11 security personnel killed in the shootouts.
Another siege was in progress at Nariman House, an office
building that houses a Jewish centre .  .  .
Army commandos stormed the Taj hotel in the early hours of
Thursday morning, apparently leading to the release of some guests
inside, with television footage showing people being shepherded
out of the building.
Shortly afterwards, the upper floors of the landmark hotel
became engulfed in flames. Fire engines were brought in to rescue
trapped guests .  .  .
The standoff was also continuing at the Oberoi Trident hotel,
where at least two gunmen were believed to be holding out with
around half-a-dozen hostages. The dome of the Taj hotel in Mumbai is well alight as
Earlier, several men armed with AK-47 rifles had stormed into guests try to scramble to safety with the help of military
the passenger hall of Mumbai’s main Chhatrapati Shivaji railway
personnel.
station, firing indiscriminately and throwing grenades. Source: The Age, 7 November 2008.

6 Read the newspaper report above and then answer
the questions.
(a) Why should the Australian government offer
assistance to India following the Mumbai terrorist
attack of 2008?
(b) What effect does such terror have on tourism in
India?
(c) What other harm does such an event have on the
Indian economy?
(d) What are the implications for the global economy
of such an event?
7 What is a free trade agreement, and how does such
an agreement benefit Australia?
8 Brainstorm some ideas about why it might be
preferable for Australia to negotiate FTAs with lesser
economies than the United States.
9 The class is to be divided into three groups. Each
group should prepare and research one of the
following topics for a group debate:
(a) That free trade agreements are always in
Australia’s best interests.
(b) That Australian governments should offer major
tax incentives for foreign businesses to operate in
Australia.
(c) That globalisation is a good thing for all of us.

Chapter 2: New wave economy 57

 Thinking about . . .
…what I have learnt
1 It’s a small world 3 Into Australia
Globalisation Our trading
has, in some relationship with
ways, made the China is steadily
world a smaller growing in
place. importance.

Globalisation has had significant impacts on the economy
and environment of Australia and the world. Some of
these impacts have been beneficial; others have not.
1 What are some of the drawbacks of globalisation?
2 Explain some benefits of globalisation for the
Australian economy.
3 Which bodies are the ‘watchdogs’ of globalisation
and how well are they performing their job? Explain
your view.
2 Out of Australia
ex
po
rts
China, with its huge population and rapidly advancing
technology, has become a major trading partner for
Australia. This has had a dramatic impact on our
manufacturing sector.
1 Why can China produce goods at a much lower cost
than Australia?
2 What impact have imports from China and other
countries had on Australia’s footwear, textiles and
clothing industries, among others?
3 Why are Australia and several of its trading partners,
including China, engaged in discussions concerning
bilateral trade agreements?

4 The bigger they are…

rts

Exports from Australia

po
ex

exports

now reach almost all ts

ex por
parts of the world.
exports
When a giant
exp
ort
s collapses,
exp

the crash
orts
exports

s
ort
exp can have
far-reaching
effects.
With huge quantities of natural resources, a well-
educated workforce and good economic leadership,
our exports should continue to be a major area of
economic growth for Australia.
1 Which five countries are the biggest buyers of our Some TNCs, which have become enormous over
exported goods and services? recent years, had to be rescued or ‘bailed out’ by
2 ‘In order to reduce our trade deficit we need to governments, because it was thought that their collapse
export more goods and services and change our would have catastrophic effects on the economy.
mix of exports to reflect the world’s rapidly growing General Motors may be one giant TNC that is allowed
population and take advantage of developed to collapse.
technologies.’ Currently, what are our major export 1 List five TNCs and explain what the term TNC means.
items? Should these items continue to be our main 2 Explain some economic advantages and
exports for the next few decades? Explain your view. disadvantages of the growth of TNCs.
3 In what way can groups such as The Wiggles 3 What are some of the ethical rules that should be
increase Australia’s export figures? Name three other followed by TNCs? Present your views on how well
entertainment items exported by Australia. these rules can be enforced.

58 Humanities Alive Economics

4 Second Edition
& Citizenship 10 Second Edition
 Student worksheet 
2.12

1 In order of importance, rank the following

BACK TO THE ESSENTIAL QUESTION
Think back to the Essential Question raised
at the beginning of the chapter: How does
globalisation really affect us on a day-to-day
basis?
1 Has globalisation been of greater value to
some countries than to others? Justify your
view.
2 Do the benefits of a global economy
outweigh its negative impacts? Give
reasons for your view.
factors, which you might use in deciding which of
several learning teams performed more effectively in
a given learning task. Justify your ranking order.
(a) Time taken to complete the task
(b) Degree of cooperation between group
members
(c) Input of each team member
(d) Group average score on a related test
(e) Quality of final presentation
2 Describe a situation where you felt that your
learning:
(a) gained from the team situation
(b) was frustrated by the team situation.
3 ‘Learning as part of a team is far better than learning
on one’s own.’ To what extent do you agree with the
statement? Explain your answer.

…how I learn Self-evaluation

A learning team is a group of people with different skills
and abilities who work closely together to achieve a
common learning goal. Each person in the team plays
an important role in achieving team success. Learning
as part of a team has several advantages but you need to
know what makes such a team successful.
In several of the activities, you were required to work as
part of a small team. How well did the team operate and
how well did you contribute to the achievement of the
team’s task (research, presentation, project and so on)?
In the table below, evaluate the team’s strategies (and
your contribution) for achieving success, by truthfully
grading each strategy (where 1 is the highest grade).

Strategies to improve contributions to achieve team goals 1 2 3 4 5

1 Members of the learning team were each given their own role and responsibility to perform, by
the team leader or by the team.

2 Team members relied on each other to contribute to the work of the team and encouraged one
another to achieve their tasks.

3 The team had a clear, well-understood goal or objective and remained focused, when working,
to achieve this.

4 Achievable deadlines were set for completing parts of the task; these were checked, and
workloads adjusted if necessary.

5 The team made a set of rules to guide how the team would work and achieve its goal.

6 Each team member was motivated to strive for his or her ‘personal best’.

7 The goal set was challenging but reachable. It helped to motivate team members.

8 If I disagreed with the team approach, I critically analysed ideas, not individuals, but committed
to the final majority view.

9 I contributed to the team by communicating information and sharing ideas.

10 I contributed to the team by developing options, solving problems, making decisions or

coordinating tasks.

Chapter 2:
9: New wave economy 59
 eBook plus
ICT activities
The global village
SEARCHLIGHT ID: PRO-0033
Scenario
You are the product development manager for a major
transnational corporation (TNC). You have been asked to
develop a new product to be sold on the global market
and present it to the company’s board of directors. Your
presentation must track the production of the product from
the raw material stage to its final point of sale.
You must create a product with a production cycle that
spans three different continents. Your raw materials must be
sourced from a developing country located on the African
continent. You must also select a production location in
an Asian country and explain the size and structure of the
production plant. Finally, you must identify a location in a
developed country (in either Europe or North America) where
your product will be sold. You will also need to explain the
type of retail enterprise that will sell your product.
Your task
Your new product is to be presented to the board of
directors using Google Maps.
Your interactive global map should pin-point the various
locations in your production cycle. These should be
realistic locations where similar economic activity to what
you are proposing actually takes place.
60 Humanities Alive Economics & Citizenship 10 Second Edition
The directors of your company will want to know the
following:
• What raw materials will be required to produce this
product and where will they be sourced?
• What production process will be used, and what
will the primary, secondary and tertiary stages of
production involve? Where will this occur, and why
was this production location chosen?
• Where will the target market for the product be
located? You will need to give reasons why you
believe these potential customers will be interested
in the product.
Finally, you should write a 500-word report to your
shareholders that will encourage them to support your
new product by teaching them about global production
locations. It should inform them of the advantages and
disadvantages of producing in the global village. You
should also include in your report a brief explanation
of how this process is an example of economic
globalisation and the concept of the global village.
Process
• Open your ProjectsPLUS application for this chapter,
located in your eBookPLUS. Watch the introductory
video lesson and then click the ‘Start Project’ button
to set up your project. You can complete this project
individually or invite other members of your class to
form a group. Save your settings and the project will
be launched.
 Your ProjectsPLUS application is available in this chapter’s
Student Resources tab inside your eBookPLUS. Visit
www.jacplus.com.au to locate your digital resources.

• Navigate to the Media Centre and preview the sample

Google Map provided so you can see the kind of map
you will be creating. A document is also available that
includes a list of potential developing countries and the
raw materials they produce.
• Decide on the product that you would like to create.
• Navigate to your Research Forum. Topics have been
loaded in the system to provide a framework for your
research. You should research locations in Africa to
source your raw materials, locations in Asia to house
your production plant, and locations in Europe or North
America to sell your product. The weblinks in your Media
Centre will help you get started. Enter your findings as
articles under each topic. You can view and comment on
other group members’ articles and rate the information
they have entered. Be sure to enter the source of any
information you find online. You can include hyperlinks
to other websites in your Google Map.
• Make notes of the interesting facts and important
ideas you discover about the countries that your
product will be produced and sold in. You can insert
some of this information as extra ‘Amazing facts’ or
MEDIA CENTRE
Your Media Centre contains:
• a list of developing
countries and the raw
materials they produce
• weblinks to sites on global
production
• a guide to Creating a
Google Map
• a sample Google Map model
• an assessment rubric.
SUGGESTED
SOFTWARE
• ProjectsPLUS
• Microsoft Word
‘Did you know?’ boxes in your • Google Maps
Google Map or include this
information in your report.
• Use the Creating a Google Map guide in your Media
Centre to help you create your Google Map. Use pins
to add approximately 100 words about each of your
chosen sites. Make sure you clearly distinguish between
the locations for raw materials, site of production
facilities and places where the goods are to be sold.
Make sure you use the language of a business
executive when accounting for the locations you have
chosen: for example, ‘India is a rapidly developing
country that offers a qualified labour force as well as
access to technology including manufactured computer
software’. You must ensure that your interactive map
is functional and interesting before submitting your
assignment. It is important that the pins all work and
that the information and images on your map are
informative and thought provoking.
• Write your report to the board of directors.
• Email your Google Map to your teacher. Then
complete your project by printing the research report
from your ProjectsPLUS Research Forum and handing
it in with your report to the board of directors.

Interactivity
Match Up: ‘Global brands’
Match Up is an interactive card game with
a twist — the pairs aren’t exactly the same.
In this exciting interactivity, you will use your
knowledge of global brands to see if you can
match a series of products with their countries
of origin. Can you remember where the correct
pair is? Can you beat the clock?
SEARCHLIGHT ID: INT-0965

Chapter 2: New wave economy 61

 Finding the
CHAPTER

3 right career
Essential ideas
Finding the right career when you
leave school can be a challenge.
Some young people have a clear
idea about the career path they want
to take. Others take some time to
work out the direction in which they
want to go. If you are not sure about
your career path there is no need
to feel pressured. In all probability,
the decisions you make now are not
decisions that are ‘for life’.
The workplace is constantly
changing. As new global needs arise,
the workplace changes in response.
Your interests and needs will also
change throughout your life. The
idea of one job-for-life no longer
applies. You may have three or more
completely different occupations
during your working lifetime.
But everyone has to begin
somewhere. Year 10 is a good time
to start to think about the course
of action you could take when you
leave school. By actively seeking
help and support you can begin the
process of planning your career path
with confidence.
Essential links
You are responsible for your own career path. Rather than just accepting whatever comes along, it is a good
idea to plan and manage your career journey. It is well known that people who love their job are more likely
to be healthier and happier. By having a good understanding of yourself, you can make better decisions
about the type of career path that will satisfy you.

1 Think about the type of things you like to do

2 Many young people combine part-time work and
Do you like the outdoors and have an adventurous spirit?
Perhaps a job in ecotourism is the job for you.
3 Students in Year 10 often participate in a work
such as participating in a club or volunteering.
Perhaps there is a school subject that you really
enjoy and would like to know more about.
These interests may tell you something about
a career direction that would suit you. What
are some of your interests? What would make
you happy at work?
study. Employers may require you to complete a
job application form or to supply a résumé. You
will need to be willing to promote yourself by
stating your skills and experiences. Would you like
a part-time job or do you already have one?
experience program. An understanding of issues
relating to occupational health and safety is a
prerequisite. Why do you think both employers
and employees should share the responsibility
of creating a safe workplace?

THE ESSENTIAL QUESTION

Year 10 is a good time to start thinking about

your future. The Essential Question is: What
vocational pathway would best suit your
individual skills, interests and aspirations for
the future?

Chapter 3: Finding the right career 63

 3.1 School for life
There are surprisingly few differences between attending school and working as a full-time employee. In
fact, one of the main purposes behind formal education is to prepare you for life, so that when you leave the
relatively sheltered environment of secondary school, you can take your place in the world as aware and
confident young adults.

A Responsibility is an
important work and life skill.
Dependable individuals
volunteer (i.e. choose), or
are directed, to perform
a task and take on the
responsibility to complete
D Time management
skills enable you to plan
it. Teachers or employers your day so that you are
know that they can trust that always on time for your
person to carry out tasks lessons and have completed
without further instructions. your homework.

B Self-management
involves the individual
in taking the initiative
to negotiate with others
when circumstances
change or to ask
for extra help when
necessary.

C Organisational skills include

always having the correct
materials to begin work.

64 Humanities Alive Economics & Citizenship 10 Second Edition


E Interpersonal skills involve the capacity
to communicate in a group and make known
F Emotional intelligence
involves ‘people skills’.
your thoughts and ideas in a way that It is the capacity to interpret
promotes harmony. One of the most important and act on other people’s
aspects of work is being able to function feelings and emotions.
effectively in a team environment. People who have a high level
of emotional intelligence can
resolve conflict and work
with people to ensure that
tasks are completed. Many
organisations now rate
emotional intelligence as
being just as important as
employment experience and
academic qualifications.
G Work ethic is developed by individuals
taking pride in the work at hand and working
hard to achieve goals. Employees with a good
work ethic usually require minimal supervision
in the workplace.
Student worksheet 
3.1
Remember
1 (a) Define in your own words:
time management skills,
self-management skills,
emotional intelligence,
volunteer, initiative.
(b) For each term, give an
example from your own
experience in which you
have, or potentially could
have, demonstrated this
quality.
think
2 Suggest why emotional
intelligence is so important in
the classroom and workplace.
self-discovery
3 How would you rate yourself
according to the following
criteria?
• Organisational skills
• Time management
• Self-management
• Emotional intelligence
• Communication skills
• Initiative
• Responsibility
• Work ethic
(a) Create a chart from the
criteria listed. Add four
performance columns next
to the criteria column — very
high, high, medium and
low. Now assess your own
performance.
(b) For each of the criteria that
you listed as high or very
high, give one example of a
job for which you think the
ability or personal quality
would be essential.
(c) Identify the areas on your
chart where you scored
medium or low. Explain how
each of these could be a
problem in the workplace.
Think about how you could
improve.

emotional intelligence  ‘people skills’ that help a person

to interpret other people’s feelings and needs (even without
being told of them) and act appropriately
initiative  the first step or opening move in a series of actions
time management skills  techniques and strategies
for planning, prioritising and scheduling tasks to increase
effectiveness
work ethic  belief in the virtue of hard work

Chapter 3: Finding the right career 65

 3.2 What do
you like?
Have you ever stopped to
think carefully about the
person you are? Have you
analysed your likes, dislikes,
personality, hobbies, and
even the way you interact with
other people?
As you are about to embark on
the road to your career, you
will need to stop for a moment
and reflect on yourself. There
are many careers in the world
of work, and it is a difficult
task to find the right one or
ones for you. A number of
tests are available that can help
people work out the type of
vocation that best suits their
personality. These tests require
you to answer a range of
questions and determine what
interests you the most. From
the following list, answer: not
interested, interested or very
interested.
• Take and edit digital videos.
• Teach others how to do
tasks.
• Work in a bank and handle
money.
• Drive and transport goods.
• Design jewellery.
• Organise social events and
parties for clients.
Your answers to this small
sample of options give some
indication about the things
you like to do and, possibly,
provide some clues to the sorts
of jobs that might best suit
you. The jobs mentioned on
these pages are categorised into
interest groups. Which group
interests you most?
66 Humanities Alive Economics & Citizenship 10 Second Edition
A Influencing and personal contact
Listening to others, reassuring people,
excellent communication skills and an ability
to lead others is the focus here. When a
person enjoys interacting with other people,
a career in this area could also overlap
B Artistic and creative
another career area such as clerical and
The creative person is the one who
administrative. In this case,
has interests in music, drama,
community services could
media, writing, painting, craft
be the answer.
work, designing or, of course, art.
This person is good at expressing
  Possible occupations:
psychologist, social worker
themselves either through a
or fitness instructor
medium or verbally.
  Possible occupations:
graphic designer,
architect, signwriter,
desktop publisher or
web page designer
C Clerical and administrative
These people are often interested in
business. They are organised people who
are able to collect, analyse and organise
information. They may also like to interact
and supervise people, deal with figures and
computers, and handle financial situations.
  Possible occupations:
personal assistant, 2. Memo3. Memo4. Memo 5. M
office administrator or Memo emo6
.M
accountant
em
D Figures and computational
The person who loves maths, and who is
good at working with figures, equations,
statistics and finances may find a career
in this group. This person not only is
good with maths, but also can apply
it to other areas, such as building,
engineering and administrative work.
  Possible occupations:
engineer, architect or
1
= 745
teacher (science or
maths) 1097 –
+ 93
8455
E services
Helping and community
Working and communicating with
others are the skills of this area.
Teaching others, caring for people
and just generally helping other
people is the main focus.
  Possible occupations: childcare
worker, teacher, police officer or
human resource officer
 Student worksheet 
3.2

Remember
K Literary J Medical 1 Define the following terms
People in this group enjoy words, Helping others, and an interest in people in your own words: career,
ideas and different forms of and the way we function, is the focus of the vocation, clerical.
communication. They are very medical person. In this area, the skills of
capable at developing, researching listening to other people, solving problems, think
and expressing their opinions. researching medical issues, and wanting to
  Possible occupations: improve the mental and physical wellbeing 2 For each of the interest groups
multimedia developer, of others are required. shown here, identify one more
translator, film producer,   Possible occupations: relevant career.
journalist or writer massage therapist, 3 Read the descriptions of the
chiropractor, dentist, people below carefully. Choose
pharmacist, dietitian or one or more interest groups to
doctor
fit each of them.
(a) Josie is a highly organised
person who enjoys
dealing with mathematical
problems. She also loves
to design and create visual
I Outdoor materials.
This is the person who loves to be
outdoors. They enjoy nature, want to (b) Doug loves to read. He
work outside and often always has his head in a
have excellent practical book, and can give you
and manual skills. a concise description of
  Possible occupations:
what he is reading. He
armed services,
landscape gardener, loves words, and is almost
construction worker, a walking dictionary. He
miner or works well with people.
environmental (c) Mick loves working outside.
scientist H Practical and manual He interacts with people
Creating something with your well, often giving his friends
hands, using tools, being able to advice and direction in their
repair something and wanting life. He is a fit person who
to know how things work. This
runs regularly and plays
describes the practical person
who often enjoys working outside soccer.
and loves creating or fixing 4 Which interest group (or
something. groups) do you fit into? Why?
  Possible occupations: panel
beater, mechanical engineer, ict
dressmaker or carpenter 5 Use the Job Guide weblink in
your eBookPLUS. Match each of
the work categories described
here to the ones in the guide.

F Scientific G Technical and

You may find this
person in the
science lab,
behind a test
tube or two,
because they enjoy researching,
experimenting and scientific processes.
Such people are good at doing things
with their hands, and often deal with
mathematical formulas.
  Possible occupations: meteorologist,
chemist, research assistant or physicist
engineering
career  the combined experiences of
learning and of paid and unpaid work
Working with tools, undertaken during a person’s lifetime
equipment and vocation  a particular occupation,
machinery is what business or career
drives these people.
They can easily get mechanical things
working, and may even enjoy designing
them. Excellent practical and mathematical
skills are also found in this group.
  Possible occupations: engineer, pilot,
sound technician or optometrist

Chapter 3: Finding the right career 67

 3.3 Pathways in life
At this point in your life, many people — parents, teachers and friends — will be asking you about your future.
What are you going to be? Are you going to do Years 11 and 12 and, if so, which subjects? There are many
choices available to you today in terms of education, training and employment opportunities.

A VCE
The VCE (Victorian Certificate of Education) is gained by completion of a set
number of units of study over a two-year period. You must satisfactorily cover
a set of outcomes for each unit. You may choose from a variety of subjects
offered by your school.
  On completing your VCE studies, you will receive an ATAR (Australian Tertiary
Admission Rank). This score is used to rank your performance in the VCE in
relation to all other students who completed the course in the same year. That
is, it gives you a relative position.
  University courses often have an ATAR score that is used as a cut-off.
Students must achieve this score (or close to it) to obtain entry into the course.
The ATAR score may be used on its own as a selection tool for entry into
courses; it is also often used in conjunction with other selection criteria that
may include prerequisite subjects, interview and folio presentation.
  Each university
generally publishes a list
of ‘clearly in’ ATAR scores
that are also published
in the VTAC guide (see a
Careers teacher for more
information). This also
identifies prerequisite
subjects and extra
requirements.

C TAFE
TAFE (Technical and Further Education) courses offer
B VCAL training for many different career areas. They cater for
The VCAL (Victorian people with all levels of education. The areas of study
Certificate of Applied available can be as varied as tourism, business studies,
Learning) is a vocationally visual arts and plumbing.
based course that   TAFEs offer diploma and advanced diploma courses for
students may undertake students who have completed Year 12. They also offer a
instead of the VCE. The range of certificate courses and traineeships in a variety
VCAL gives students of career areas. TAFEs provide information on the types
practical, work-related of courses available and the related fees and charges. A
experience, as well as good opportunity to obtain such information is during TAFE
literacy and numeracy open days.
skills.   It is also possible to complete a TAFE certificate as part
  Students who complete of your VCE or VCAL studies. This is referred to as a VET
the VCAL are likely to (Vocational Education and Training) course. It may involve
be interested in going attending TAFE one day a week, or completing the unit at
on to a TAFE course, your school if arrangements have been made. It may also
apprenticeship or job. contribute to your ATAR score.

68 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 
3.3

D Apprenticeships
traineeships
and
An apprenticeship or a traineeship
allows you to work while studying the
area that interests you. Apprenticeships
take four years to complete and cover
careers such as hairdressing, carpentry
and plumbing. Traineeships take
approximately one year to complete and
are available in many areas including
food processing, horticulture, retail and
hospitality.
  It is possible to complete an Australian
School Based Apprenticeship (ASBA) in
conjunction with the VCE or the VCAL.
ASBA students combine study towards
the VCE or the VCAL while also working
(about one day a week) and completing
on-the-job-training.
  If you take on an apprenticeship or
a traineeship you will learn about your
job as you work with your employer. On
particular days, and/or some evenings,
you will be required to attend classes at a
TAFE college.
E University
There are limited rules at universities, as students are treated as adults who
are responsible for their own learning.
  Most university courses are taught through lectures and tutorials. At a
lecture you will be in a large group of students, taking your own notes from
the speaker. Tutorials are small-group classes that extend the information
acquired from lectures or from the reading assigned to the course. You are
expected to contribute to general discussions and this may form part of
your assessment. There is usually a focus on independent learning. You will
also be required to spend time by yourself researching, reading, writing up
practicals and so on.
  When you begin your bachelor’s degree, you are known as an
undergraduate. Bachelor’s degrees are offered at pass and honours level.
At some tertiary institutions, honours work is available after first year and
involves undertaking extra study and classes. At other institutions, honours
are achieved by completing an extra year at university.
  At your formal graduation ceremony, you become a graduate. If you
complete a second or subsequent degree, this is called a postgraduate
degree.
  Most universities conduct open days, when interested students are
welcomed to the university to find out information about different courses.
These are generally conducted in the second half of the year.
Remember
1 Explain the difference between:
(a) VCE and VCAL
(b) TAFE and university
(c) an apprenticeship and work
experience.
think
2 How does university differ from
school life? Prepare a list of
strategies to help make university
as stress-free as possible.
3 Organise for a guest speaker
(e.g. a student completing
tertiary education) to talk to
the class about VCE, TAFE and/
or university. Write four or five
questions you might like to ask
if given the opportunity (e.g.
What are they studying? Why do
they choose to study it? What
are the pluses and minuses of
their chosen education?).
ict
4 Use a search engine on the
internet to obtain information
about the careers below. Note
down for each the educational
requirements, where the study
may be undertaken, and details
of work opportunities. Find out
if there is a demand in Australia
for these careers:
(a) engineer
(b) plumber
(c) zoo keeper
(d) chef.
5 Select a career that interests
you. Use the internet to find
out what the educational
requirements are, and where
study may be undertaken.
Suggest school subjects that
might be helpful to you in
achieving this career.
  If any of this information is
relevant to you, get a copy of it
and add the details to a folder
labelled ‘My Career’. If possible,
create the folder online.

F Work experience programs graduate  someone who has

Some schools conduct a work experience program in which received a degree on completing a
students are encouraged to seek temporary employment to gain course of study
an insight into that particular field of work.
  Some professions, such as accounting, offer cadetships. During honours  the highest academic rank
a cadetship a company employs you and gives you time to attend for a course
university, where you complete your degree. This is a great way to postgraduate  someone who
become trained and educated in this field of work, because you undertakes further study at a
have permanent employment. university after completing a degree

Chapter 3: Finding the right career 69

 3.4 Sell yourself
Have you ever tried to advertise yourself ? How would you go about
SkillBooster
doing it? With a television or newspaper advertisement? Or is a Writing a résumé
billboard with your photograph on it more your style? Remember the five ‘Cs’ when
preparing a résumé:
figure 1 In order to show an
employer what it is
you have to offer, you C lear — well organised and
logical

C oncise
need to start by setting — relevant and
out, in a formal way, necessary
who you are and what
you have done. Before
employers can really
C omplete — inclusive of
everything you need
decide if they want
to employ you, they C onsistent — similar styles or
fonts; don’t mix them up
must make sense of
who they are dealing
with. For example,
C urrent — up to date
Personal details about yourself.
what education, Include name, address, telephone
work experience, 1 number, email address, date and
place of birth, and nationality, or
personal interests and permanent resident status.
characteristics do you Education. Include secondary
have? A résumé, or education. Give details of your
curriculum vitae (often 2 most recent results. This will
eventually include secondary
called a CV), is the and tertiary education where
accepted way of setting relevant.
out the key aspects of Work experience. List all your jobs
your background. 3 in reverse order, with your most
recent workplace and experience
first.
Personal skills. This section of the
Tips for preparing résumés 4 résumé gives an employer an idea
about the personal skills you can
Your résumé is a formal document that sets out clearly and bring to the position.
concisely your name, contact information, education, skills
and experience. You should update it regularly if this is Interests and activities. Do not

necessary, so that the most recent information and results are 5 underestimate the importance
of these. They give an employer
an idea of who you are, beyond
always included. the more formal elements of your
✎ Maintain a formal style. background.
✎ Make it easy on the eye. The visual appearance should be Referees and references. A
clear and simple. Clearly label all sections, allow plenty of
space between them, and keep a simple structure within
6 reference is a letter that is written
about you by someone who
knows you well or for whom you
each section so that it is easy to see the main areas. have worked. It identifies the
✎ Keep it short. One to two pages is enough. Don’t detail type of person you are and/or
describes your work performance
everything you have ever done. in previous jobs. If you cannot
get someone to write a reference
✎ Put your most recent details first. For example, show details for you, then you could ask
of your current work experience first, then your previous the person to be a telephone
referee. A prospective employer
job and so on. will phone your referee and
✎ On a separate page, at the back of your résumé, you can ask questions about your work
performance. Provide at least two
add more detailed information. referees in your résumé.

70 Humanities Alive Economics & Citizenship 10 Second Edition

 Student worksheet 
3.5, 3.6

RÉSUMÉ
self-discovery
1 Find two suitable people
who will agree to act as your
referees. List their contact
1 PERSONAL DETAILS details.
2 Collect and organise
Name: Chun Tse Ming
information on your
Address: 456 Ballarat Rd Sunshine VIC 3020 education, work, certificates,
Telephone: (03) 9311 3719 school reports and personal
Email: ming@email.com achievements for your ‘My
Career’ folder (see page 69).
Date of birth: 27 May 1993
Nationality: Australian Communicate
3 Prepare a one-minute oral
presentation to the class
2 EDUCATION
about yourself. You could
Secondary Braybrook College include your hobbies,
Completed Year 10 in 2009 sporting achievements, school
English A achievements and so on.
4 Prepare notes on your
Commerce A
school and work experience,
Maths B paying particular attention to
Science B achievements, good qualities,
skills and the details of any
Indonesian A
work (paid or unpaid) you
Art C+ have performed.
Technology B
    Writing a résumé (p. 70)
5 Produce a draft of your résumé
3 WORK EXPERIENCE using the guidelines in the
November 2009 Bakers Delight, salesperson, part time SkillBooster.
January 2009 – McDonald’s, kitchen hand, salesperson (a) Use a computer to neatly
September 2009 Awarded employee of the month, August 2009, present your résumé.
part time (b) Have a classmate check your
presentation and suggest
4 PERSONAL SKILLS any changes.
Interpersonal: I have an excellent relationship with all age (c) Add your completed résumé
groups, evident through my coaching, work and document to your ‘My
school achievements. Career’ folder.
Reliability: I was often relied upon to work extra shifts at (d) Save your résumé to a disk
Bakers Delight. or to a file on your home
computer.
Leadership: Captain of the College tennis team 2008–2009
(e) Keep your résumé up to
date, including school
5 EXTRACURRICULAR INTERESTS AND ACTIVITIES results and part‑time or
casual work, so that you
Sch0ol Member of school band, playing piano
Class captain 2007 and 2008 can quickly respond to any
employment opportunities.
Other Tennis coach for the Braybrook under 10s

6 REFEREES referee  a person who knows you

well and will present you in a positive
Dr Russell Watson Rev. C. Leadbetter Ms Vivien Li
manner to a prospective employer
Maths Coordinator Sunshine Anglican Church Year 10 Coordinator
résumé  a formal record of your
Braybrook College Northumberland Rd Braybrook College
personal information and of your
Braybrook VIC 3019 Sunshine VIC 3020 Braybrook VIC 3019 work and education history
(03) 9312 4585 (03) 9311 4009 (03) 9312 4585 tertiary education  formal
education beyond secondary school,
such as at university or TAFE

Chapter 3: Finding the right career 71

 3.5 Career.com
You’ve written your résumé. What do you do now? How do you decide who to give it to, and how should you
send it? You might like to consider using the internet as a job-searching tool or as a host for your résumé.
The web gives you access to a mass of job information — and it’s all at your fingertips! You just need to
know where to look.

The internet is a great place to get
extra information about possible
careers. Try going to www.jobguide.
deewr.gov.au or to www.myfuture.
edu.au. Use the links to read about
a specific career and find out what
sort of an education you need to get
there.
For example, by following the
links at www.jobguide.deewr.gov.
au, you will learn that zoologists are
biologists who study the structures,
characteristics, functions, ecology
and environments of animals.
You will also learn that, to
become a zoologist, you will
probably have to pass your VCE
(with good results in maths and
science) and study science or
applied science (with a major in
zoology or biological science) at
university.
you information about preparing
yourself for employment, the
educational requirements of the
job, and the jobs that are currently
available.
If you go to the website of a
newspaper (e.g. The Age or The
Sydney Morning Herald ), you
will find a link to job vacancies.
For example, if you go to the Age
website, you will find a link to
www.mycareer.com.au.
Career websites allow you
to search their databases of job
vacancies; to be notified by email
if there are suitable jobs available;
to be updated with the latest
information on résumé writing,
interview techniques and assessing a
job offer; and to read the career and
educational profiles of others.
Other organisations also offer
this type of service. An employment
website operated by the federal
government’s Department
of Education, Employment
and Workplace Relations is
www.jobsearch.gov.au. Seek
Communications, at www.seek.
com.au, lists job vacancies from
Australian recruiters and advertisers.
Recruitment agencies will also often
have their own website.
Sending your résumé
Although the best way to get a job
is still often to send your résumé
and a letter of application to an
employer in response to a job-
vacancy advertisement, there are
now other technology-oriented
options. Some online recruitment
services now encourage you to place
your résumé on their website, so
that it can be viewed by potential
employers.

figure 1
www.myresume.com

My Résumé
PERSONAL EDUCATIONAL WORK SKILLS AND INTERESTS REFERENCES
DETAILS ACHIEVEMENTS HISTORY ABILITIES AND HOBBIES

PERSONAL DETAILS
Name: Marcus Chew
Finding jobs online Date of birth: 3 March 1993
Newspapers are often the first port Place of birth: Brisbane, Queensland
of call for job seekers looking for Citizenship: Australian
job advertisements. Newspapers Address: 15 Elderdale Street,
with large classified sections (usually Doncaster East,
on a Saturday) will have a separate Vic. 3109
section for employment. Phone details: (03) 9538 7592 (home)
But the internet can also be used 0422 836 692 (mobile)
to find this information. Once you Email: mchew@hotmail.com
start searching the internet, you Health: Excellent
will find lots of websites that give

72 Humanities Alive Economics & Citizenship 10 Second Edition


Figure 1 opposite shows how
one ‘page’ (or section) of an online
résumé could look — in this case,
a section headed ‘Personal details’.
By selecting different sections of
the résumé (e.g. ‘Interests and
hobbies’), users can display other
pages of the résumé. Some online
résumés include voice recordings —
even short video recordings — so a
figure 2
Artist Dr Levent Efe’s web page
Other job search
methods
Although the internet is an excellent
job-searching tool, it is a good idea
to use a variety of search methods.
Cold-calling
Some young people use cold-
calling as a method to find a job.
Cold-calling is when you contact a
business directly to let them know
you are interesting in working
for them. A common method of
cold-calling is to personally visit
the business and offer them a copy
of your résumé. Other methods
of cold-calling are contacting the
business by telephone, writing a
letter or sending an email.
potential employer can also hear and
see prospective employees speaking.
Some job seekers like to include
their own personal web page address
in their résumé. For example, it
would be useful for an artist to set
up a simple web page that includes
scans of their work, so that an
employer could judge the quality of
their work. Figure 2 is an example.
Networking
It has been estimated that over
60 per cent of jobs are obtained by
networking. Your friends, family
and neighbours may be able to help
you in your search for a job.
Joshua’s story
Joshua, aged 16, wanted a
part-time job. He mentioned this
to a friend’s mother. By chance,
his friend’s mother knew the
manager at the local supermarket
so she promised to put in a good
word for him. Two weeks later
Joshua was asked to go to the
supermarket for a chat about a
part-time job.
Student worksheet 
3.5
self-discovery
1 Imagine that you are
creating the visual and audio
component of an interactive
résumé. Write a list of questions
that you might be asked and
the answers that you would
provide.
design and creativity
2 In your notebook, sketch an
outline of how your web page
might look if you created one.
What sort of information would
you include? What special
talents could you highlight on
your web page? Would a web
page be useful for your career
choice, or would a standard
hard-copy résumé be better?
Explain.
COMMUNICATE
3 Complete this exercise with
a partner. Take it in turns to
practise cold-calling. One
person takes the role of an
employer. The other person
takes the role of a young person
who is personally visiting the
business to ask about part-
time job opportunities. The
young person should introduce
him or herself, ask whether it
is possible to leave a copy of
their résumé and, at the end
of the conversation, thank the
employer for their time.
ict
4 Research two career options
that interest you by visiting the
Career Options weblink in your
eBookPLUS. Find out the details
of the job, and the educational
requirements, including
university/TAFE courses and
VCE subjects.
5 Use the internet to search for
job classifieds. Choose two
careers or fields that you might
be interested in and find out
how many jobs are advertised
in Australia for each of them.
How do they compare?
Chapter 3: Finding the right career 73
 3.6 Applying for a job
After completing your résumé and deciding which companies to send it to, you are ready to apply for a job.
The first step would be to find an advertisement for a job that sounds appropriate and interests you. Respond
to it by phoning the business and/or writing a letter of
application. After you have successfully contacted the
business, you may then be asked to attend an interview.

Give yourself an edge!

If applications in response to an advertisement are to be
made in writing, get in first:
1. Ring the company and get some background
information.
2. Find out details of the position available and the
qualifications and qualities that are required. For
example, what is the specific nature of the work? What
personal qualities are they looking for?
3. Do some extra research on the company using other
resources such as the internet. Find out what they do,
where they are located, how large they are and what
their company aims are.
Once you have the information you need, you are ready
to prepare your letter of application. The advertisement on
the right and the sample letter and notes on the opposite
page will help you prepare one of your own.
SATURDAY 21 March 2009 • DAILY NEWS

Architecture, Building & Construction Beauty Community Appointments

& Fitness
DRAFTSPERSON SENIOR PROJECT
Req’d for office of new precast
concrete manufacturer. Must be ARCHITECTS BEAUTY THERAPIST/NAIL

proficient in takeoff of drawings
and capable of estimating duties.
Fax 2 pages 9111 6666 or Email
construct@email.com.au
MARSHWORKS
B U I L D E R S documentation and project
SITE MANAGER
est. builder specialising in
apartments seeks a well-organised
person with proven exp in
multi-level apartment construction.
Salary commensurate with skills.
Please send applications to:
e: marshworks.com.au
or fax 9000 4444
Due to continued growth we
have positions available for
Senior Project Architects. We
seek experienced candidates
with proven construction
delivery experience. Candidates
will be involved in all aspects of
projects with emphasis on
documentation and site
supervision. Apply in writing to:
The General Manager at
City Architects,
office@cityarchitects.com.au
WeCareForYou
TECH. exp pref. bio-sculp., gel
nails an advantage. Passionate
about retailing, 32-38 hrs/pwk,
poss F/T. Sat. arvo, Sun and Mon Are you looking for roles that
off. Great work environ. Busy
are challenging and where
city salon.
Ph: Sally 0402 100 200. you can make a difference?
Fax 9200 4601
email sally@hotmail.com We have the following position available.
HAIRDRESSER Team Leader Youth Services
Qualified hairdresser to work
P/Time. Must have salon Melbourne
experience. Motivated, well Part Time, 30 hrs pw
presented. Enquiries: Dennis, 9261 9999
Jane 0412 076 111 Applications close 6 April 2009

Job advertisements, such as the Tapia salesperson ad above, can often be found in newspapers.
Carefully read the details of the advertisement before telephoning or writing to the organisation.

74 Humanities Alive Economics & Citizenship 10 Second Edition

SkillBooster
Writing a letter of application
Your application letter is a very important document, as it will create a ‘first impression’ for a prospective
employer. If it is well written, carefully edited and positive, it is much more likely to result in an interview.
Below are some points to remember when preparing a letter of application.

Nick Ringtone
413 Eric Street
MOTOROLAVILLE VIC 0411
Human Resources Manager
TAPIA
1800 Knock-Ear Street
MELBOURNE VIC 3000

10 June 2009 Keep the structure simple. The first

paragraph explains that you are
Dear Sir/Madam applying for a particular position in
I am writing in response to your advertisement in The Age newspaper, dated 6 June 2009. response to an advertisement.
I would like to apply for the position of sales representative with the TAPIA Phone Company.
The second and third paragraphs
I have been working in the mobile phone industry for two years as a salesperson. My current briefly indicate who you are
position is at Davidsson, where I am responsible for sales of its mobile phone range. My and what you do, and set out
specialisation is in the area of promotions for prepaid SIM cards, and I have been very happy the qualifications and skills you
with my sales figures. I always exceed my sales budget, as I have a very outgoing personality have to offer (according to what
that encourages people and businesses to buy from me. the employer wants). They may
also include the reasons you’re
I have an excellent sense of humour and can communicate with people from all walks of
life. My sales of phones have been extensive in all suburbs of Melbourne, from Canterbury to interested in the position — your
Craigieburn, and I have extended my area to cover some country towns. commitment to the job can be
important in showing you are really
If I am appointed to the position of sales representative for your company, I would encourage motivated.
you to challenge me with a high sales target. I work well under pressure and constantly strive to
achieve my goals. Please find my résumé enclosed. The final paragraph must sign off
in a positive way.
Yours faithfully

Nick Ringtone If you begin with ‘Dear Sir/Madam,

end with ‘Yours faithfully ’. If you
Nick Ringtone start with the person’s name, end
with ‘Yours sincerely ’.

Student worksheet 
3.5

think communicate
1 Refer to the mock Tapia advertisement opposite and the letter of     Writing a letter of application
application reproduced above. 3 Using the guidelines listed
(a) What is good about Nick’s introduction? here, design a standard letter
(b) List the key pieces of information that the advertisement said of application for yourself. The
should be in the letter. information that needs to be
(c) Judge whether Nick covered the important information. Where is regularly changed is the date, the
the important information located? person your letter is addressed to,
(d) Identify the areas that Nick could improve on, and suggest and key information in the body of
improvements. the letter relevant to the particular
(e) Look at Nick’s attitude. What do you think of the way he has sold position.
himself? How might you change his wording? Why?   Include this in a folder labelled
2 Find the errors in the following extract from a job application letter: ‘My Career’ (see page 69).
In my current job I have the roll of desk support. My manger says I pay 4 Produce a letter of application
attention to derail. for a job you have located in the
I have included my currickulum vitea for your information. classified section of the newspaper,
C U later, James Good or on a job search web page.

Chapter 3: Finding the right career 75

 3.7 SkillBuilder
Preparing for and participating in
a job interview
What is a job interview?
A job interview is a discussion between an employer
and a job applicant. The job applicant may be
interviewed by one person or a panel. Most interviews
are face to face. Where this is impracticable, the
interview may take place over the phone or by
videoconference.
Why are job interviews useful?
The job interview process helps employers find the
applicant (candidate) with the most suitable skills,
qualifications and personal qualities for the job.
It also provides applicants with an opportunity to
assess whether the job suits them.
How to prepare for an interview
Your aim is to convince the interviewer that you are the right
person for the job. Performing well in an interview requires
preparation and practice.
STEP 1
Research the organisation. What products does it sell? What
services does it offer? Does the organisation have a website
you can check out?
STEP 2
Try to find out the duties or requirements for the job. Some
positions set out the duties in a written job description. Think
about what you have already done that relates to the duties of
the job. For instance, if the job requires you to work in a team,
think about other teams you have participated in such as a
sporting team.
STEP 3
Practise your interview techniques with friends or family
members. Brainstorm the type of questions you may be
asked and work out possible answers. Answering questions
effectively will show the employer what is unique about you.
76 Humanities Alive Economics & Citizenship 10 Second Edition
Getting an interview
In most cases employers will decide whether you will
get an interview based on your letter of application and
your résumé.
If the advertisement requires applicants to apply by
telephone:
• You should ring without delay. The employer may
stop taking calls after a certain number of people
have applied.
• Before you phone, have your résumé next to you for
reference purposes, pen and paper, and your diary so
you can make an appointment for an interview.
• Introduce yourself and specify the position you
would like to apply for.
• Speak clearly, watch your language, use whole words,
not ‘dunno’ or ‘s’pose so’.
• Be prepared to promote yourself.
STEP 4
At the end of the interview you may be given the opportunity
to ask questions. Prepare some questions in advance. It
demonstrates that you are interested and enthusiastic.
STEP 5
Pay attention to your appearance and take steps to look your
best. Dirty nails and untidy hair may send a message that
you are lazy and unmotivated. Work out what clothes you
will wear. Make sure your clothes and shoes are clean. As a
general rule, when you go to an interview you should wear
clothes similar to those you would wear to the job.
STEP 6
Decide how you will get to the interview location. This may
require looking up bus, train or tram timetables. Aim at
arriving approximately 10 minutes early. This will give you the
opportunity to observe the surroundings and relax.
STEP 7
Check that your job folder is up-to-date. It should contain
your résumé and any other relevant documents, such as a
copy of your most recent school results.
 Student worksheet 
3.9

Developing my skills
The interview 1 Look at the four interview situations shown in the
If you know what to expect in an interview, you are cartoons below. For each cartoon:
more likely to feel confident. The structure of an (a) Identify mistakes made by the job applicant.
interview generally follows this pattern: (b) Suggest what the applicant should have done in
1. Opening questions — easy questions to help you each case.
relax
2. Questions to obtain information about you,
including your strengths and qualities
3. Giving information about the position and the
organisation
4. Opportunity to ask your questions
5. Concluding discussion.

Tips for a succ

essful intervie
• Make sure yo
w
ur mobile phon
e is turned off.
• Have your jo
b folder with yo
u. 2 Examine the following job advertisement. Work with
• Maintain eye
contact and sm
ile in a
a partner to complete each of the activities below.
friendly, confid
ent way.
• Be aware of We are looking for two fun-loving, bright people who are customer-
your body lang focused to join our casual staff team. We are a rapidly expanding
uage. Sit
straight and up retailer of electronic games. If you want to work in a busy rewarding
right.
• Refer to the environment, we want to interview you.
interviewer by na
me at least
once during th
e interview. (a) Discuss possible answers you could give in a job
• Avoid long, m
eandering resp
onses to interview to the following questions. Write a brief
questions.
summary of your answers.
• Look for oppo
rtunities to ex
plain your
• Why do you want this job?
skills and abilit • Why do you want to work for this company?
ies.
• At the end of • What can you contribute to the company?
the interview, th
ank the
interviewer. (b) Prepare a list of three other questions that an
applicant could be asked. How would you answer
these questions?
3 Practise your interview skills.
(a) Select a job advertisement from the newspaper
or the internet. Make preparatory notes for an
interview. Think about strategies you will adopt
to make a good impression.
(b) In groups of three, conduct interviews in which
two people interview the third person for the job
they selected in 3(a).
• Make arrangements with your teacher to wear
appropriate clothing for the interviews.
• The interviewers should prepare for their roles
by listing relevant questions.
• If possible, videorecord the interviews for later
analysis.
(c) Use the tips for a successful interview on this
Do not be late for the interview or arrive at the last minute. page to assess the interview.

Chapter 3: Finding the right career 77

 3.8 What is SkillBooster

your body Creating positive body language

Our bodies give people a lot of clues about what is
on our minds. Body gestures tell people when we

saying?
Have you ever told a lie? Oh come on now! Just a
little white lie? Did you know that when you speak
an untruth, the physical changes that your body
undergoes can give you away? That slight pause as
you are thinking of what to say, or the change in tone
of voice as your throat instantly dries. You may even
experience an increase in your heartbeat or go red in
the face.
are confident, when we are lying, and what sort of
person we are.
When you are in an interview for a job, it is
a first impression that you are trying to achieve.
You want to stand out from the crowd. You want
the interviewer to like you from the first instant
they lay eyes on you.
Eye contact. The inability to look at someone when they are
talking to you or you are talking to them gives the interviewer
the impression that you lack confidence in yourself and your
abilities.

Body language
Your body language tells people a lot about yourself,
particularly when you are in an interview. The way
that you present yourself as you walk in the door of
an interview will say a lot about you before you speak
a word. It is important that, in an interview that may
determine your future, you give out the right signals.
What are some of the giveaways? Look at the
cartoons in this spread, and see if you can list some of
the positive and negative body-language signals. Do any
of these signals remind you of yourself?

Sitting in the chair. Slouching in an interview gives the

impression that you are not attentive, and are not very
interested in getting the job.

78 Humanities Alive Economics & Citizenship 10 Second Edition


Touching your face. Touching your ear, nose and chin can give the
impression that you are not telling the truth.
The pregnant pause. Taking too long to respond to a question may
give the interviewer the impression that you are not telling the truth.
People who lie need time to make up that lie. Ensure that your
responses are spontaneous.
The hands have it. Over-gesturing with your hands, or playing with
a pen, your clothes or your face can indicate that you are not telling
the truth. Although the interviewer will expect some nerves to
show in your body language, overplay of the hands gives them the
impression that you are creating your responses.
Student worksheet 
3.7
Remember
1 List four physical gestures that can let people know
that we lack confidence in our abilities.
think
2 In each of the following case studies, identify the
impression the person’s body language is giving:
(a) Jane sat on the edge of her chair and leaned
closely towards the Year 10 coordinator, pointing
her finger at her. As Jane explained her position,
she began to shake her fist wildly in the air
towards the coordinator’s head.
(b) Eric has been working in Coles for three years
now. He hates it when people ask him to find a
product for them — can’t people see with their
own eyes? So Eric often talks and jokes with his
mates, and ignores customers who try to make
eye contact with him.
Communicate
3 Take the Handshake Challenge by answering the
following questions, and then share your responses
with a friend or collate your answers in a group.
(a) How important to you is someone’s handshake?
(Select your answer.)
Not Somewhat Very Extremely
important Important important
important important
(b) What do you think someone’s handshake says
about him/her?
(c) How do you feel when someone gives you a
weak, or limp, handshake?
(d) What do you think about a handshake that gives a
bone-crushing grip?
(e) Why do we give people a handshake?
(f) How many pumps should be in a handshake?
(Nominate a number.) Explain.
4 Have you met anyone in the past month that you
liked instantly? Why?
5 Have you met anyone in the past month that you
disliked instantly? Why?
    Creating positive body language (pp. 78–9)
6 Use the information in the SkillBooster to roleplay, in
groups, how:
(a) poor body language can ruin an interview
performance
(b) positive body language can improve an interview
performance
(c) body language can alter people’s first
impressions.
body language  subconscious gestures such as fiddling
with a pen or slouching that give away information
about you
Chapter 3: Finding the right career 79
 3.9 On the job
The range of jobs and careers available to people today is huge. Many require specialised skills and
completion of tertiary education before starting. Others may allow employees to acquire the necessary
skills and experience on the job. Here are three case studies of young people working.

Hi, I’m Nigel Brown. As part of my VCE, I completed English,

Further Maths, Physical Education, Technology and Business
Studies. I knew during the last year at school that I’d be
doing carpentry. My dad’s had his own building business for
20 years and I’ve always had the option of working with him.
  As soon as I finished VCE, I started working in Dad’s
business as an apprentice carpenter. I work with them
through the week and then go to the Broadmeadows TAFE
one week every month to complete the theory and practical
lessons. I pay a fee to attend TAFE, which is tax-deductible.
When I complete my work experience and blocks of subjects,
I’ll have a Certificate III in General Construction (Carpentry).
  The type of work I do is physically tiring, but I enjoy being
on the go. It’s great to see a completed house or extension
and say, ‘I helped build that’. When I finish my apprenticeship
I plan to do further study so I have the skills needed to one
day run a business — my Dad’s, I hope! He spends many
hours at night sending bills to clients and ordering and
paying for construction materials. At the moment I enjoy
what I do.

Hello. My name is Amelia Curtis. I work as a personal

assistant (PA) in a large national law company. When I left
school, I used my savings to travel overseas for one year.
On my return home, I worked in the office of a new car
dealership for one year but I hated it. At school I always
loved Legal Studies so I decided that I wanted to do
something to do with the law.
  I went to open days at universities and TAFEs and decided
to enrol in an Advanced Diploma of Business (Legal Practice)
at Holmesglen TAFE. My course gave me a good grounding in
various areas of law and practical experience in maintaining
legal files. My keyboard skills also improved greatly!
  When I graduated it wasn’t long before I got my current
position. I really love my job. I get to meet clients and
sometimes attend court. My employers have said they will
allow me to work part time if I can get a place at university to
study for a law degree.

80 Humanities Alive Economics & Citizenship 10 Second Edition


gap year  the year between leaving school and
commencing tertiary education and training
REMEMBER
1 In relation to the case studies for Nigel, Amelia and
Emma:
(a) Identify the steps taken by each person to become
established in their job.
(b) List the type of knowledge and skills that each job
requires.
(c) Decide which skills are common to all jobs and
which are different.
THINK
2 (a) What might be the differences between completing
an apprenticeship, an advanced diploma and a
university degree? Think about aspects such as
course content, study approaches, the way skills
and knowledge are acquired and the costs of study.
(b) Why might a person choose one option over another?
3 With their skills and knowledge, what other
occupations could Nigel, Amelia and Emma pursue in
the future? Justify your opinion.
Hi. My name is Emma York. I work in the
health science industry. I didn’t go straight
from school to university. In fact, after
finishing my VCE, I completed a gap year
as a teacher assistant in Vietnam. I helped
students practise English. It took me way
outside my comfort zone. My time in
Vietnam also led me to develop an interest
in the prevention of sickness and disease.
  When I returned home, I worked as a
swimming teacher for a while but I always
knew I would end up going to university.
After going to a careers expo and talking
to many people, I decided to complete a
Bachelor of Health Science, majoring in
Public and Environmental Health. I walked
straight into a job with a local council.
My job includes preventing outbreaks of
disease by inspecting accommodation for
cleanliness and checking swimming pools
and spas. I also investigate noise and pest
complaints.
  My skills and experience qualify me
to apply for jobs as an environmental
health and safety technician anywhere
in Australia. I might take further study to
give me occupational health and safety
expertise.
Student worksheet 
3.3, 3.4
4 Write one paragraph that describes the benefits and
disadvantages of taking a gap year.
COMMUNICATE
5 Interview an adult who is working in a career area
you are considering pursuing. Ask them five or six
key questions to find out about their career path and
what they like and dislike about their occupation.
Make a short oral presentation to your class that
summarises the information you obtained in the
interview.
ICT
6 With a partner, use an internet search engine to find
out information about the range of gap year programs
available to students when they finish their secondary
education. Write a half-page report on a program
that you and your partner find interesting. Share your
findings with your class by reading out your report.
Chapter 3: Finding the right career 81
 3.10 Rights and
responsibilities
Once you begin working, you have many rights; you also have responsibilities to your employer. It is important
that you are aware of these. You will have heard of occupational health and safety, on-the-job training,
multiskilling, awards, enterprise agreements, strikes and trade unions, but you should make sure that you
learn more about them before beginning your job.
Rights and
responsibilities
As an employee you will be expected
to:
• attend work at the required times
• provide a fair day’s work, as
outlined in your job specification
• behave in a way that supports the
‘culture’ of the workplace
• obey the rules of the workplace
and the laws of society.
In return, you can expect from your
new employers:
• a fair and just workplace and
financial reward
• safe working conditions
• a safe and healthy workplace that
conforms with the law
• benefits such as personal leave
and annual leave, which are basic
employment standards protected
by the law.
Training
Some workplaces train you
when you start your employment;
this is often called ‘on-the-job
training’. This may involve going
to special training sessions or being
supervised by a more experienced
employee in your first few months
of work.
Many workplaces also train
their staff so that they can perform
more than one job. For example,
Hoyts Cinemas train all their staff
in each area of operation, including
‘candy bar’ service, ticket selling and
ushering. This is sometimes called
‘multiskilling’.
82 Humanities Alive Economics & Citizenship 10 Second Edition
You may find that, once you
commence a job, you can continue
with further education, funded
by your employer. This brings
added skills and expertise into your
workplace and may enhance your
chances of promotion in the future.
Money
You may be paid in cash, but this
is becoming very rare today. It
is more common to be paid by
cheque or by direct transfer into
your bank account. Regardless
of the way you are paid, you will
receive a pay slip that outlines the
details of your pay, tax deductions,
leave entitlements etc.
Working conditions
The Commonwealth legislation that
regulates working conditions is the
Fair Work Act of 2009. The body
overseeing the Act is called Fair
Work Australia (FWA).
The Act provides for ten National
Employment Standards (NES)
that cover essential conditions of
employment such as weekly hours
of work, leave and public holidays.
No employer can require an
employee to accept less than these
minimum standards. The Fair Work
Act also provides that the conditions
of employment may be set out in an
award or an enterprise agreement.
Awards
An award is a legal document
that sets working conditions for a
particular industry, for example, the
retail industry. Under the Fair Work
figure 1
Members of a union who are on strike
may demonstrate to draw attention
to their demands for better working
conditions. Employees have the right
to decide whether or not to join a
trade union.
Act, awards build on the National
Employment Standards and cover a
further ten matters including:
• minimum wages (including wage
rates for juniors)
• allowances for expenses incurred
in the course of employment
• overtime rates
• penalty rates including weekends
or public holidays
• procedures for dispute settlement.
Enterprise agreements
An enterprise agreement is a
formal agreement made between
an employer and a valid majority
of employees to whom it will
apply. Under the Fair Work Act,
agreements may cover any matters
relating to the employment
relationship.

Agreements must be approved by
FWA before they begin to operate.
There are some terms that must be
included in agreements including:
• a procedure for settling disputes
• a flexibility term to enable
individual employees and the
employer to vary the effect of
the agreement
• a nominal expiry date.
When negotiating an enterprise
agreement, the parties are required
to bargain in good faith and act in a
productive and appropriate manner.
FWA has the power to make orders
to ensure the parties comply with
these requirements.
If the parties cannot reach
agreement they may seek the
assistance of FWA through
mediation or conciliation.
Alternatively, the parties may take
industrial action. This includes
action such as a strike where
employees withdraw their labour.
When all reasonable avenues to
resolve a dispute about an enterprise
agreement have failed, the matter
may go to arbitration. FWA has the
authority to arbitrate and impose
a legally binding decision on the
parties.
Occupational health
and safety
Did you know that workers aged
between 15 and 24 are more likely
than any other age group to be
injured at work? The Victorian
Occupational Health and Safety Act
of 2004 requires both employers and
employees to share responsibility for
safety in the workplace. This means
that both employers and employees
should work together cooperatively
to identify and solve health and
safety issues.
You can help keep your
workplace safe by identifying and
reporting any hazards. A hazard is
anything that is likely to cause harm
to an employee or a visitor to the
workplace. Examples of hazards
include:
• boxes stacked unevenly on a shelf
that may fall on someone
• frayed electrical leads that may
electrocute a person
• water or other substances on the
floor that may cause a person to
slip
• loud noise from machinery that
may cause permanent loss of
hearing if no ear protection is
provided
• mechanical machinery that may
cause serious physical injury if no
guards are fitted
• manual handling of heavy items
that may cause back injuries
• toxic fumes or dust particles
that may cause health problems
if a respirator or mask is not
provided.
figure 2
Employees who work at heights
greater than two metres need to use
precautions such as a safety harness to
avoid the risk of falling.
arbitration  the process of resolving a dispute by an independent third party such
as a court or tribunal; the decision is binding on the parties
conciliation  a process in which an independent third party actively helps two or
more parties to solve a problem by reaching an agreed solution
trade union  an organisation of employees join together to bargain collectively
with employers regarding pay and working conditions
Student worksheet 
3.8
Remember
 1 What is multiskilling?
 2 What is a pay slip?
 3 What conditions may be
included in an award?
 4 Explain the use of awards for
employees and employers.
 5 What is the role of a union in the
workplace?
think
 6 Why would businesses
continually train their staff?
What benefits does this provide
for the employee and the
employer?
 7 Why is a safe and healthy
workplace an important
employer responsibility and
employee right?
Communicate
 8 Josie owns and operates a
fast food outlet that sells hot
chips, hamburgers and cooked
chickens. What hazards may
exist in Josie’s kitchen that could
be a threat to the safety of her
employees? Use ICT tools to
design a poster that could be
placed on the kitchen wall to
remind employees of safety
issues.
 9 In small groups, discuss the
advantages and disadvantages
of union membership. Use ICT
tools to summarise these points
in a table.
ict
10 Choose a career or industry
in which you are interested.
Conduct internet research to
find out if this industry has a
trade union.
11 Use a search engine to find out
information about JobWatch
including:
(a) what it is
(b) ways in which JobWatch may
help young people in relation
to their rights at work.
Chapter 3: Finding the right career 83
 Check and challenge
 1 (a) In a flowchart format, show a student’s  
education progression from primary school to
university.  
(b) Create another flowchart that shows how
another student might choose an alternative path
that could involve VCAL, TAFE, mature-age  
education, work, apprenticeship, volunteering or
studying part time. (pp. 64–9)
 2 What skills can you identify that are common to the  
following interest groups? (pp. 66–7)
(a) Outdoor/Practical and manual
(b) Artistic and creative/Clerical and administrative
(c) Helping and community services/Medical
 3 Suggest two careers for each of the interest groups
listed for activity 2.
4 Give one example of each of the seven life skills
listed on pages 64–5.
5 Create a clever jingle (or similar) to help you
remember the key points when preparing a résumé.
(pp. 70–1)
6 Check out the various careers websites mentioned
on page 72. Rate them in order of how helpful and
easy to use you found them, and justify your ranking.
7 Read the information below about becoming a nurse.
(a) What are the secondary education requirements
for this position?
(b) In your own words, describe three personal skills
that nurses need.
(c) List three different degree courses on offer
for nurses.

Registered nurse
Registered nurses have successfully
completed a degree in nursing
and have had their name
placed on the Register
of Nurses. Registered
nurses are health-care
professionals who assess
the needs of patients,
and provide preventative,
curative and rehabilitative
nursing care.
Nurses work closely with
doctors and other medical
staff to improve the health
of patients. Nurses can
work in hospitals, aged-
care facilities, mobile health
clinics, community health
practices, prisons, schools and
rural areas.
Nurses’ hours will often involve
shiftwork. They may be required to
work morning, afternoon and night
shifts, and will also work on weekends.
Personal qualities
Nurses must have:
• patience
• excellent communication skills
• a calm nature, able to handle emergencies
• the ability to work both individually and as part of a team
• a professional manner when dealing with patients’ health
problems.
Education and training
To become a registered nurse you will need to pass your VCE
and complete a nursing degree at university. To be accepted
into a nursing degree you must have good results in English,
and probably good results in a science or maths subject.
Some universities may also have extra prerequisites, so it is
worth looking at each university’s courses in more detail.
Some nursing degrees
Australian Catholic University (Ballarat and Melbourne)
Bachelor of Nursing (three years full time or equivalent)
Deakin University (Burwood, Geelong and Warnambool)
Bachelor of Nursing (Pre-registration) (three years full time
or equivalent)
La Trobe University (Albury–Wodonga, Bendigo and
Bundoora) Bachelor of Nursing (three years full time or
equivalent)
Monash University (Gippsland and Peninsula) Bachelor of
Nursing (three years full time or equivalent)
RMIT University (Bundoora, Sale and Hamilton) Bachelor of
Nursing (three years full time)
University of Ballarat (Mount Helen and Horsham) Bachelor
of Nursing (three years full time)
Victoria University (St Albans) Bachelor of Nursing (three
years full time or equivalent)

84 Humanities Alive Economics & Citizenship 10 Second Edition

 8 Summarise, in three paragraphs, the key points for • somewhat suspect — the position sounds
writing application letters. very vague, but the money is excellent, and
 9 In groups or pairs, answer the following questions the advertisement gives no details about
about first impressions. Think about your initial the job.
interactions with people when you meet them for (b) Select (from those collected) three interesting
the first time. job advertisements and complete the table below
(a) What non-verbal factors do you take into as far as possible.
consideration when forming a first impression of (c) For one of the advertisements, prepare a list
someone? of questions to ask about the business over the
(b) Explain why these factors are important to you. telephone. Set out the page so that the responses
(c) Do these factors change when the setting is can be completed next to the question.
school or work (compared with a social setting)? (d) Prepare a letter of application for your chosen
10 Prepare a roleplay with a group or partner that advertisement.
illustrates the correct body-language techniques for (e) Conduct a mock interview, with a partner, for
an interview. your chosen advertisement.
11 What is the role of trade unions in the workplace?
12 Using the classified section of a newspaper or a job-
seeking website:
(a) Select some advertisements that are:
• clear about the position, the role of the
applicant and the type of person that should
apply
• very vague about the job
• persuasive and clever — an advertisement
that is eye-catching, and/or makes the
position sound fantastic

Advertisement 1 Advertisement 2 Advertisement 3

Duties of the job

Location of the business

Hours of work

Salary/wage per hour

Other benefits (e.g. car)

Qualifications required

Experience required

How and where to apply

Closing application date

Further information

Chapter 3: Finding the right career 85

 Thinking about . . .
…what I have learnt
1 Post-school options Earning and learning activities of teenagers

Not in
The successful pathway from school to full-time work often labour force
Seeking
involves participation in further education and training. In work 5.0% Full-time
the first year after leaving school, approximately three quarters Part-time 3.7% education
of young people are engaged in full-time education or work. work 71.7%
Over half of those in full-time education also work part time. 6.7%
1 In the first year after you leave school, what will you be doing? Full-time
2 Do you think what you train for at 18 will still suit you work
when you are 35? 12.8%

In 2008, the majority

of 15–19 year olds were
engaged in full-time
education.
Source: ABS Labour Force Austalia (2011) (data cube LM3).

2 Personal profile
To get a job, you may have to fill out an application form or provide a
résumé. This is your chance to create a good impression. Employers will
not grant you an interview if you provide written material that contains
grammar and spelling errors.
1 Do you have a well-presented and up-to-date résumé ready to use
should an opportunity arise?
You can make sure you are ready for a job 2 Are you confident you can clearly sell your skills and abilities in a job
interview by taking a number of steps such interview?
as thinking about what you will wear.

3 Workplace rights
Before you start working, it is wise to be aware of your
workplace rights and responsibilities. Laws protect
your rights in relation to working conditions such as
rate of pay. Both you and your employer have a legal
responsibility to ensure your workplace is safe.
1 How do awards or enterprise agreements help protect
your basic working conditions?
2 You have a right to freedom of association.
Will you join a union when you start to work?
Everyone has the right to be safe at work. Workplace
Why or why not? violence or harassment is not acceptable.

86 Humanities Alive Economics

4 Second Edition
& Citizenship 10 Second Edition
 Student worksheet 
3.12

BACK TO THE ESSENTIAL QUESTION Self-evaluation

The Essential Question is: What vocational Many of the activities in this chapter were aimed at
pathway would best suit your individual developing and consolidating your written and oral
skills, interests and aspirations for the future? communication skills.
1 You used your written communication skills to create
(a) Discuss three things you have discovered job application letters and your résumé. Evaluate
about your skills and interests. your skills by placing a tick in the column that best
(b) Having learnt about the importance of reflects your level of competence.
planning your possible career path, write
Written Very Needs
a paragraph to answer the Essential communication Excellent good Good improvement
Question. Include a comment on why you Competent use of
think your chosen pathway will suit you. vocabulary

Correct spelling

…how I learn
Proper sentence
structure

Varied patterns
and lengths of
Well done! You have thought about your future career sentences
and are now well on the way to developing a pathway
to reach your goals. Now it is time to reflect on your Appropriate use of
understanding of what you have learnt by completing paragraphs
the following sentences. Relevant use of
detail to convey
3 Having an up-to-date 4 I am prepared to experience and
résumé is promote myself in skills
important because . . . a job interview by . . .
Coherent and
organised
2 School subjects structure
that might be 5 My body language is
helpful to enter important because
these occupations it tells people . . . 2 Think about the oral communication skills you
are . . . used in mock job interviews. For each of the
following statements rank your ability on a scale of
1 Given my skills
6 I can help ensure 1 to 5 where 1 equals excellent and 5 equals needs
and interests,
two occupations
my workplace is improvement.
that might suit
safe by . . . (a) When listening and responding, I can effectively
me are . . . use body language to convey complex messages.
(b) I can select and use language that is appropriate
to communicate information in a job interview.
(c) I can understand that a question may be
interpreted in various ways and I can respond
with insight.
(d) I can use pertinent questions to clarify the
meaning of something I am not certain about.
(e) I can generate appropriate questions on the
spot if the need arises.

Chapter
Chapter10:
3: Finding the right career 87
 eBook plus
ICT activities

The right person for the job

SEARCHLIGHT ID: pro-0004

Scenario and task

You are the HR (Human Resource) Manager for ‘Reality
Gaming’. Reality Gaming is a company that specialises
in the development of 3-D video games. The business is
growing rapidly and, because of this growth, it is expanding
the Digital Content Department. This department
specialises in the creation of 3-D characters and worlds.
You have posted an advertisement in all the major
newspapers and employment internet sites. In order to
attract the best in the business, you have offered flexible
working conditions. You must select the best candidate for ‘Reality Gaming’
Four potential candidates have been short-listed for the and provide a report to the Directors explaining the reasons
job. You have been supplied with the video interviews of why you chose this person over the others. Remember to
these candidates, their résumés and the details of the pay consider how the working conditions requested by each
and working conditions they have requested. candidate will impact on the real cost of their employment.

88
 SUGGESTED
SOFTWARE
• ProjectsPLUS
• Microsoft Word
Process • After you have completed the
• Open your ProjectsPLUS application for this chapter, SWOT analysis, you will prepare
a report on your choice of candidate (minimum 1 page).
located in your eBookPLUS. View your Project Brief, click
Make sure that your report includes the following points:
the ‘Start Project’ button and then set up your project
–– a description of the Job role and of the type of
group. You can complete this project individually or invite
person that would best suit working in your company
other members of your class to form a group. Save your
–– an overview of the other candidates
settings and the project will be launched.
–– an evaluative analysis of your choice of candidate
• Navigate to your Media Centre, watch the video
–– reasons behind your choice.*
interviews of each candidate and read their résumés.
Notes were taken at each interview regarding the * Remember that there are a number of
requested pay and working conditions, and are noted on anti-discrimination laws, so make sure
that your reasons do not discriminate
the bottom of each résumé. against the other candidates.
• Use your Research Forum to enter your feedback on each
of the candidates. The information that you enter should
be presented as for and against arguments. If working
in a group, you can rate and comment on each other’s
articles.
• Open the ‘Candidate Assessment’ template in your
Media Centre. Analyse and evaluate each candidate
by completing a SWOT analysis for each one. A SWOT
analysis is an evaluative tool utilised to assess the
‘Strengths, Weaknesses, Opportunities and Threats’ of a
particular situation.
In this exercise, the SWOT analysis will give you a
framework that will enable you to compare and contrast the
four different candidates.

Your ProjectsPLUS application is available in this

chapter’s Student Resources tab inside your eBookPLUS.
Visit www.jacplus.com.au to locate your digital resources.

MEDIA CENTRE
Your Media Centre contains:
• video interviews with the
four short-listed candidates
• résumés from the four
candidates
• a ‘Candidate Assessment’
template.
Your Project Brief includes a
video lesson presented by an
HR Manager.

Chapter 3: Finding the right career 89

 Glossary
arbitration  the process of resolving a
dispute by an independent third party
such as a court or tribunal; the decision is
binding on the parties
asset  an item or a resource of value
autonomy  independence or freedom
balance of payments  a statement
summarising the economic transactions
between the residents of a country and
those of other countries during a specific
period, usually a year
balance of trade  the difference, over a
fixed period, between the money gained
by a country from its total exports and
money it spends on total imports; where
export income exceeds import payments
there is a surplus in the balance of trade
bankruptcy  legal process that declares that
a person or a business cannot pay their
debts. Bankruptcy may be voluntary or
ordered by a court.
body language  subconscious gestures such
as fiddling with a pen or slouching that
give away information about you
business  a person or organisation
that produces goods or buys and sells
goods in order to make a profit
career  the combined experiences of
learning and of paid and unpaid work
undertaken during a person’s lifetime
cash flow  the amount of cash coming in
and out of a business in a given period
of time
collateral  assets (money or property)
used as a guarantee that a borrower
will repay their loan. The assets may be
forfeited if the loan is not paid.
collective bargaining  negotiation between
an organised group of workers, or union,
and their employer
conciliation  a process in which an
independent third party actively helps
two or more parties to solve a problem
by reaching an agreed solution
consumer  a person who purchases goods
and services to satisfy needs and wants
consumer confidence  a measure, obtained
through polling, of how people feel about
the future of the economy and their own
financial situation
cooperative  a jointly owned commercial
enterprise formed when a number of
people in the same industry combine to
produce goods and services
credit union  a financial institution, often
linked to an industry, that manages funds
and acts as a lender; it is not a bank
credit  when receipts are greater than
expenditure
90 Glossary
currency  a system of money used in
a country, or the notes and coins
themselves
debit  when expenditure is greater than
receipts
deficit  amount by which expenses exceed
revenue (loss)
demographics  variables by which people
can be grouped for the purpose of
marketing campaigns, e.g. age,
sex, income, occupation, education,
geographical location
developing economies  economies that
are emerging from an underdeveloped
stage and are showing growth in key
industries such as tourism, agriculture or
telecommunications
double-entry system  a system of
bookkeeping in which each transaction
is entered twice in the books, once to
the debit of an account and once to the
credit of another
drive-by advertising  advertising which
consumers can view while driving their
car, e.g. billboards
economic growth  growth of an economy
as measured by recognised factors such
as the total value of goods and services
produced in a given time (gross domestic
product)
economy  a system of production,
distribution and consumption of goods
and services
emotional intelligence  ‘people skills’ that
help a person to interpret other people’s
feelings and needs (even without being
told of them) and act appropriately
entrepreneur  a manager of a business
who sometimes takes business risks in
order to produce and make a profit
environmental sustainability achieved
when natural resources can continue
to be exploited without destroying the
balance of the environment; may be
threatened by the impact of production
methods in meeting demand for goods
and services.
exchange rate  the rate at which one
currency is exchanged for another
fixed expenses  predictable business costs
that need to be paid even if you don’t
trade, e.g. rent, utilities, insurance
free trade  an exchange situation between
two or more countries that involves
a reduction of trade barriers such as
tariffs, import quotas and government
restrictions on foreign ownership
gap year  the year between leaving school
and commencing tertiary education and
training
goods  merchandise, commodities for sale
or trade; items that you can see or touch
goodwill  money paid to purchase the
reputation of an existing business
graduate  someone who has received a
degree on completing a course of study
honours  the highest academic rank for a
course
human resources (HR)  the people working
in any organisation, permanent and
casual
impulse buyers  people who make
unplanned, spontaneous purchases
incentives  encouragement or motivation for
employees to work more effectively and
efficiently, given in the form of pay rises,
bonuses or awards
industrialised economies  economies that
have a solid manufacturing industry
and significant infrastructure for the
production of goods and services
initiative  the first step or opening move in a
series of actions
intellectual property  ideas created and
owned by an individual or company
inventory  the stock of items available for
sale
limited liability  shareholders cannot lose
more than their investment in the event
of the failure of the business
liquidity  availability of cash flow
manufacturing  making goods using
manual labour or machinery
marketing  the process of delivering the
right product, in the right place, at the
right time, at the right price
market research  surveying the market to
determine the views of consumers and
their lifestyle choices
market segment  a section of a market
mediation  a way of resolving a dispute
in which a mediator helps the parties
to reach agreement; mediators have
no power to impose a decision on the
parties
mediator  a independent person who is
trained to help the parties in dispute to
reach a compromise
multinational corporation  a company
that operates in a number of different
countries
multiskilled  the ability to perform a variety
of tasks within the same organisation
niche market  a market in which a limited
and clearly defined range of products is
sold to a specific group of customers
non-renewable  describes any resource
that cannot easily be replaced, such as
fossil fuels
parent company  the major (or head)
company that establishes smaller
companies (subsidiaries) to handle
particular operations
postgraduate  someone who undertakes
further study at a university after
completing a degree
primary producer  a person or company
involved in growing, producing or
extracting of natural resources
profit  excess of revenues (money received)
over outlays (money spent)
prospectus  an official document issued by
a company that explains the company
structure and invites investment from the
public
recession  a downturn in an economy that
follows two or more quarters of negative
growth; usually less severe than a
depression
recruiting  employing new workers for an
organisation
referee  a person who knows you well and
will present you in a positive manner to a
prospective employer
rent  a regular payment made by a tenant
to the landlord or owner for the use of a
building
retailer  a business which sells goods to
consumers
retaining  using pay and conditions such
as leave, superannuation and other
benefits to encourage staff to stay in an
organisation
résumé  a formal record of your personal
information and of your work and
education history
services  work done by one individual or
business and sold to another, such as
an accountant or plumber (generally
intangible goods of economic value);
actions done for you by others
shares  units of ownership in a company. An
investor may purchase a great many, or
only a few, of these units. As the value of
a company’s shares goes up or down, so
too does the value of the shareholder’s
investment.
standard of living  a measure of the level of
material comfort of a population, in terms
of the goods and services available,
poverty rate and average income
stock exchange  a market where stocks,
bonds and other securities are bought
and sold
subsidiary  a company established by a
parent company to handle particular
aspects of its operations
surplus  amount by which revenue
exceeds expenses (profit); a situation
in which there is too much of a good or
service available compared with what
consumers want to purchase
target market  a market that a product is
deliberately aimed at
tertiary education  formal education
beyond secondary school, such as at
university or TAFE
time management skills techniques
and strategies for planning, prioritising
and scheduling tasks to increase
effectiveness
trade union  an organisation of employees
join together to bargain collectively with
employers regarding pay and working
conditions
training  building the necessary skills to
work in an organisation
transaction  a business or commercial
exchange
transnational corporation  a business
(sometimes called a multinational
corporation) that operates in more than
one country, usually with branch offices
outside its home country
unpresented cheque  a cheque which
has not been deposited into the bank
account of the payee
variable expenses  business costs that vary
according to the level of sales (e.g. stock,
marketing, commissions)
vocation  a particular occupation, business
or career
work ethic  belief in the virtue of hard
work
Glossary 91
 Index
4Ps strategy  14 currency  42, 43 I
customer service  10 imported products  40–1
A impulse buyers  16, 17
advertising, to promote new behaviour  15 D incentives  10, 11
apprenticeships 69 debit 21 industrialised economies  45
arbitration 83 deficit  22, 23 initiative  64, 65
Asia–Pacific Economic Cooperation (APEC) demographics  14, 15 intellectual property  52, 53
Forum 45 developing economies  45 International Monetary Fund (IMF)  34
assets  7, 9 double-entry system of accounting  18, 21 internet, and globalisation  35
Australian dollar  42 drive-by advertising  16, 17 inventory  10, 11
Australian economy
effects of imports  41 E J
Australian trade  38 economic cooperation job applications  74–5
autonomy  8, 9 job interviews
importance of  44
awards 82 and body language  78–9
and trade treaties  44–5
economic growth preparing for and participating in  76–7
B job search methods
and export markets  38–9
balance of payments  40, 41 cold-calling 73
balance of trade  38, 39 economies, defined  5
see also Australian economy networking 73
bank statements  20–1 online advertisements  72
Best Biz Association Award (BBAA)  30–1 emotional intelligence  65
enterprise agreements  82–3 sending your résumé  72–3
body language  78–9
Boost Juice  5 entrepreneurs  4, 5
environmental sustainability L
boutique layout  16
defined 34 limited liability  6, 9
business  2–3, 5, 6
and fishing industry  48–9 liquidity
business finances  18–21
and globalisation  35 defined 21
business ideas  4–5
maintaining  19, 20
business knowledge  10 ethical issues, transnational corporations
business plans  12–13 (TNCs) 52
business premises
M
exchange rate  41
and layout  16–17 manufacturing  16, 17
export markets  38–9
location 16 market awareness  10
exports, importance of  38
businesses market research  14, 15
establishing 10–11 F market segments  14, 15
importance of planning  12–13 marketing
Fair Work Act 2009 (Cwlth)  82
marketing 14–15 a business  14–15, 18
Fair Work Australia (FWA)  82
reasons for failure  12 defined  8, 9, 14, 21
fishing industry, and environmental mediation  24–5, 83
types 6–9 sustainability 48–9 mediators 24–5
fixed expenses  22, 23 mobile phones  54–5
C
foreign currency  42–3 multinational corporations  54, 55
career paths  62–3
franchises 8 multiskilled  10, 11
careers  66, 67
free trade  34 multiskilling 82
cash budget, preparing  22–3
free trade agreements  46–7
cash flow  10, 11
cash payments journals  18 N
G National Employment Standards  82
cash receipts journals  18
cash transactions, recording  19 gap years  81 natural resources  35
cheques 19 globalisation 34–5 new wave economy, nature of  32–3
China goods  6, 9 niche markets  5, 44, 45
economy 50 goodwill  12, 13 Nokia case study  54–5
trade with Australia  51 graduates 69 non-renewable natural resources  34, 35
cold-calling 73 grid layout  16
collective bargaining  53 grouped bar graphs, interpreting  36–7 O
consumer confidence  43 Occupational Health and Safety Act 2004
consumers  4, 5, 55 H (Vic) 83
cooperatives 8–9 hands-on management  10 occupational health and safety (OHS)  83
credit 21 honours 69 on-the-job training  80–1, 82
credit unions  8, 9 human resources  24–5 open-plan layout  17

92 Index
Organisation for Economic Co-operation S training  24, 25, 82
and Development (OECD)  34 school, as a preparation for full-time transactions  18, 21
overfishing 48 employment 64–5 transnational corporations (TNCs)
services  6, 9 defined 34
P shares 7 ethical issues  52
parent companies  52, 53 shop layouts  16–17 globalisation and cheap labour  34
partnerships  6, 9 sole traders  6, 9 Nokia case study  54–5
pathways in life  68–9 standard of living  34, 35 regulating 53
pay slips  82 stock exchange  7, 9 role in world economy  52
pirate fishing  49 subsidiaries  52, 53
postgraduates 69 surplus  22, 23 U
primary producers  38, 39 university study  69
profits  4, 5 T unpresented cheques  20, 21
promoting new behaviour  15 TAFE (Technical and Further Education
proprietary (private) companies  7, 9 Courses) 68 V
prospectus  7, 9 target markets  4, 5, 14 variable expenses  22, 23
public companies  7, 9 technology, impact on business  4 VCAL (Victorian Certificate of Applied
terms of trade index  40 Learnings) 68
R tertiary education  69, 70, 71, 80, 81 VCE (Victorian Certificate of Education)  68
recession 38 time management skills  64, 65 vocations  66, 67
recruiting staff  24, 25 trade  38, 51
referees  70, 71 trade treaties, and economic W
rents  16, 17 cooperation 44–1 work ethic  65
résumés 70–1 trade unions  82, 83 work experience programs  69
retailers  16, 17 trade-weighted index (TWI)  43 workers’ rights and responsibilities  82
retaining staff  24, 25 traineeships 69 World Trade Organization (WTO)  34

Index 93