Vous êtes sur la page 1sur 13

1|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


NIGERIAN BUSINESS ENVIORNMENT 8. Economic forces consist of the general health well as, the increasing economic integration of
1. The concept business environment means; (a) of the country in which the business countries (a) general agreement on traffic and
the totality of the interaction between operates(Daft and Marcic, 2001). The trade (GATT) (b) North American free trade
business and the environment (b) a set of economic ricks of starting up a business agreement (NAFTA) (c) European union (EU)
forces and conditions outside the business consist of the economic system and how (d) Economic community of west African
boundaries that have the potential to government relates to business. The States (ECOWAS) (e) African Union (AU)
influence the my business components of the economic forces are; per 13. For Small and Medium Enterprises (SMEs) to
operates..(Bourgeois, 1985 and Jones et al, capital income, unemployment rate, make meaningful contributions. The factors
2000). government spending, inflation, deflation and are; (a) availability of foods and markets (b)
2. The term Business means ; (a) a human interest rates, infrastructures and facilities, the operating environment (c) level of
activity that is concerned with the production credit availability, taxation, etc. competition (d) level of technology (e) level of
and distribution of goods and services (b) an 9. Technological forces are the combination of management.(Owualah, 2001)
activity that seeks profit by providing goods skills and equipment that are use in design, ENTREPRENEURSHIP AND ENTREPRENEURS
th
and services to others.(Nickels et al, 2002). production and distribution of commodity. It 1. The term entrepreneur is derived from a 17
3. A business operates within several is also the new developments in the century French word preneur meaning a
environments, which affect the survival and transformation methods of resources. When person who takes on or initiates a task.
growth of the business, as well as the existing technologies are suitable for The word entre means between.
effectiveness and efficiency of the business entrepreneurial needs, then opportunity 2. The word entrepreneur was introduced from
managers. conditions will be even more the French word entreprendre by cantillon
4. The managers cannot control the favorable.(Enivorom 1994) in 1955, which means ability to take charge
environment, but can make decisions that are 10. Demographic forces are outcomes of changes and bear risk.
beneficial and must understand the in attitudes towards the features of 3. An entrepreneur is risk-taking, innovative
challenges and prospects of the business population. E.g. age, gender, ethnic origin, individual who establishes and manages a
environment..(Madura 2004) race, sexual orientation and social class (Jones business for the purpose of profit and growth
5. A task environment is the set of forces and et al 2000). Examples of demographic forces (Olson 1987, and car) and et al 1984).
conditions that originate with supplies, are: population density and distribution. 4. An investor is a provider of capital who
distributors, customers and competitors and Demography is the statistical study of the receives. Reward as interest on the capita
affect the ability or an organization to obtain human population, with regard to size, supplied, while an entrepreneur receives
inputs and dispose output done to the density and other features such as age, reward through profit earned.
pressure and influencing of the managers. income etc (Nickel 2002). 5. An entrepreneur is determined by the
6. A general environment is the economics, 11. Political and legal factors are outcomes of activities or actions of the individual.
technological, socio-cultural, demographic, changes in laws and regulation. Examples of 6. A small business owner manager as an
legal political and global forces that affect the these forces are deregulation and individual who establishes and manages a
organization and its task environment. privatization, environmental protection, business firm for the principal purpose of
7. Suppliers are individuals and organizations conservation, workshop safety and social furthering personal goals.
that provide an organization with the input discrimination. 7. The common characteristics between the
resources (raw materials, components parts 12. Global forces are outcomes of changes in entrepreneur and owner-managers are; (a)
or employee) needed for production. international relationships, technology and a need for independence and achievement (b)
carry economic, political and legal systems, as internal loans of control over the environment

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


2|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


(c) ability to live with uncertainty (d) taking which are reinvested to achieve the social 4) Bad labor market Expected
calculated risks goal. Social enterprises encompass social opportunities
8. Entrepreneurship is the art of operating in an firms, cooperatives, credit unions, 5) Decreased industrial
exceptional way (Vesper 1987). foundations, trading arms of charities. Production
9. Entrepreneurship is the process of creating 16. The Factors affecting womens Another approach or model is;
something different with value by devoting entrepreneurial aspirations are; Increased 1. Predisposing, triggering factors as well as
the necessary time and effort, assuming the media coverage, Positive role models, and the existence of a business idea.
accompanying financial, psychological and Affirmative action and access to support BARRIERS TO ENTREPRENEURIAL CULTURE
social risks and receiving the resulting rewards services. (a) Uncertainty of income
of monetary and personal CHARACTERISTICS OF ENTREPRENEURS (b) Risk of losing investment
satisfaction..(Hisrich 1990). (a) Opportunistic: Seeking opportunities where (c) Long hours and hard-work
10. Corporate entrepreneurship is others eek challenges or dont even see at (d) Capital and customs
entrepreneurial behavior in an established all. (e) Educational background and training
large organization. Corporate venturing (a) It (b) Innovation: ability to spot or create and (f) Government policy of support
is concerned with investments by larger firms exploit opportunities (Schumpeter 1934) ECONOMIC ROLE OF ENTREPRENEURSHIP IN
in strategically important smaller firms and (c) Self-confidence: taking responsibility for NATIONAL DEVELOPMENT
entrepreneurship (b) it is concerned with decision making and accept consequences (a) Utilization of local resources
individual employees and how they might be (d) Decisiveness and self-motivation: acting (b) Dispersal of economic activities
encouraged to act in an entrepreneurial fast to take advantage of opportunity (c) Diversification of economic activities
manners with a larger organization. (e) Risk-taking (d) Mobilization of saving
11. Intrepreneurship implies entrepreneurs (f) Commitment and hard-work SOCIAL ROLE OF ENTREPRENEURSHIP IN NATIONAL
within large firms aims at cutting the (g) Need for independence DEVELOPMENT
bureaucracy in such firms to develop new (h) Internal locus of control (a) Creation of jobs
products or services for the markets. FACTORS INFLUENCING ENTREPRENEURIAL (b) Stimulation of indigenous
12. Social entrepreneurship is the use of BEHAVIOR entrepreneurship/technology
entrepreneurial behavior for social objectives. The contingency model assumes that the (c) Transformation of traditional industry
It primary purpose is creating superior social environment emits signal that are capable or (d) Redistribution of wealth and income
value for clients. influencing people towards entrepreneurship. The
13. Motivations of Women Entrepreneurs are; model was postulated by..(Gilad and Levine, PROMOTION OF ENTREPRENEURSHIP
Need for money, Desire for 1986). These signals are called push and pull 1. In the past, the industrialization policy of
independence/self-accomplishments, and variables. most countries is centered on economy of
Unemployment. Push variables Pull variables scale.
14. The Barriers to Women Entrepreneurship are; 1) Job dissatisfaction Influence of 2. Economy of scale is a concept which
Finance, Gender gap in property rights, parents/role models emphasizes cost-effectiveness through large
Marriage, Inheritance , Types of business 2) Career set back Educational scale production. The concept was common
th
engaged, Period of experience, and Access to background in the 20 century
education and skill acquisition. 3) Unemployment Acquired 3. Peter F. Drucker in Innovation and
15. The defining characteristic of social experience entrepreneurship (1985), discuss the unique
enterprises is their ability to earn revenues features that made the American economy

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


3|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


greater in the past years over, that of Europe (c) Annual turn-over (b) Financing arrangement at the micro level
and Japan. The response was the activities of According to IFC (2003), the World Bank groups Nnanna (2001) stated the schemes as;
small and medium business. SME department, the classification is; 1. Provision or local finance through government
4. The post independence government adopted MICRO ENTERPRISES agencies, likes; federal ministry of industry
the import-substitution, large-sale Employees is 10 or less (FMI) central bank of Nigeria (CBN), Nigerian
industrialization strategy to accelerate Total assets: US $100,000 or less Industrial Development Bank (NIBB), Nigeria
industrial development in Nigeria. Total annual sales: US $100,000 or less Bank for Commerce and Industry (NBCI),
5. The Nigerian industrial development bank Small Enterprise Nigeria Export-import bank (NEXIM) etc.
(NIDB) was established 1964 to promote Employees: between 10 and 50 2. Facilitating external finance through agencies
large-scale industrial projects to aid growth Total assets: US $100,000 to $3 million like; world bank, African development bank
and development. Total annual sales: US $100,000 to $ 3million (ADB) etc
CONTRIBUTION OF MICRO, SMALL AND MEDIUM MEDIUM ENTERPRISES 3. Establishment of the National Economic
SCALE ENTERPRISES TO SOCIO-ECONOMIC Employees: 50 to 300 Reconstruction Fund (NERFUND)
DEVELOPMENT Total assets: $ 3million to $15 million PERFORMANCE OF SMES PROGRAMMES/SCHEMES
1. SMEs are the bedrock of any nations Total annual sales: $ 3million to $ 15 million 1. Small-scale industries credit scheme (SSICS): It
economy According to National Council on Industry (NCI) at was set up in 1971 by the federal government
st
2. The small business act in 1953 was enacted the 31 meeting at Makurdi, Nigeria in 2001, SMES through the federal ministry of industry (FMI)
by the United States of America were classified as: to provide financial and technical support for
rd
3. Netherland issued its white paper on the (A) MICRO/COTTAGE INDUSTRY SMEs. It was launched in the 3 national
development of small-scale industrial in Labour: 10 or less development plan (1975-1980) as matching
1954. Capital: N1.5 million or less grants between the federal and state
4. The federal republic of Germany had a policy (B) SMALL SCALE INDUSTRY governments. It became inactive in 1979.
framework on SMEs which was enacted in Labour: 11-100 2. Central bank of Nigeria (CBN): In 1979/80 fiscal
1959. Capital: n1.5million to N50million year, 10% of the total loans was given to SMEs.
5. Japan enacted the fundamental laws on (C) MEDIUM-SCALE INDUSTRY It was later increased to 16% in 1980 and 20%
SMEs in 1963. Labour: 300 or more in 1990. It became inactive in 1996.
FUNCTIONS OF SMEs..(Owualah 1999) Capital: N50million to N200million 3. Nigerian bank for Commerce and Industry
(a) Transformation of traditional or indigenous (D) LARGE SCALE INDUSTRY (NBCI): It was set up I 1973. It approved about
industrial Labour: 300 or more N965.5million for 797 projects between 1973
(b) Creation of jobs Capital: N200million or more and 1989. It became inactive in 1989.
(c) Redistribution of wealth and income 4. Nigerian Industrial Development Bank (NIDB):
(d) Utilization of local resources The bank empowered SMEs who has capital up
(e) Mobilization of savings APPRAISAL OF PAST POLICIES OF GOVERNMENT AT to N750,000. The bank gave loan of
(f) Dispersal and diversification of economic PROMOTING ENTREPRENEURSHIP N174.6million between 1980 and 1988. It
activities Nigerian government has established various became inactive in the late 1990s. It was later
CLASSIFICATION OF SMEs programmes/schemes to ensure growth merged with NBCI and NERFUND to form the
The criteria for identifying SMEs are; development of SMEs. They are; bank of industry (BOI).
(a) Number of persons employed (a) Monetary, fiscal and industrial policy at the 5. World Bank: It gave loan of $270million in
(b) Value of investment macro level. 1988. The SME apex office which was

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


4|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


established in the central bank approved boosted exports from N4billion in 1975 to National Resource Development and
$132.8million for 211 projects between 1990 N26 billion in 1980 while GNP per capita Conservation Scheme (NRDCS)
and 1994. increase from $360 to $1000. According to NAPEP had a take-off grant of N6 billion. The
6. National Economic reconstruction fund the federal office of statistics in 1960, Capacity Acquisition Programme (CAP) trained
(NERFUND): It was introduced in 1989 during about 15% was poor, but by 1980, it was 100,000 unemployed youths, 5000 were
the structural adjustment programme (SAP). It 28%, in 1985 was 46% and in 1992, it was trained as tailors and fashion designers. The
approved $144.9million or N681.5million 43%. In 1996, it was 66% (76.6million) of Mandatory Attachment Programme (MAP)
between 1989 and 1998. 110million. also empowered 50,000 unemployed
7. The Capital Market: The Second Tier Securities CAUSES OF POVERTY graduates
Market (SSM) was established in 1985. (a) Corruption 6. Small and Medium Enterprises Development
CONSTRAINTS TO FINANCING SMES IN NIGERIA (b) Bad governance Agency of Nigeria (SMEDAN): It was
1. Lack of depth of the financial system (c) Debt overhang established the SMEDAN act of 2003. It is
2. Inadequate infrastructural base (d) Unemployment posited as one stop shop. It available
3. Poor management (e) Low productivity services include, (a) Business support centres
4. Overbearing regulatory and operational (f) Burgeoning population growth (b) Business Information Centres (c) Capacity
environment (g) Lack of effective skills training Building and Promotional Services
5. Low equity base POVERTY ALLEVIATION LEGACIES 7. Small and Medium Enterprises equity
6. Unfavorable traffic policy 1. Between 1976-79, General Olusegun Investment scheme (SMEEIS): it is an initiative
NEW APPROACHES AT PROMOTING Obasanjo initiated the Operation Feed the of Bankers committee 9CEO of banks). As at
ENTREPRENEURSHIP Nation (OFN) Sep. 2004, a total of N26.8billion was created
1. Nigerian investment promotion 2. Between 1979-83, Alhaji Shehu Shagari by 82 banks while N9.3billion (32.3%) had
commission (NIPC): It was established by initiated the Green revolution been disbursed by 56 banks to 173 projects.
decree No: 16 of 1995. It replaced the 3. Between 1985-1993, General Ibrahim 8. Micro-Finance Bank (MFBs): are created to
industrial development coordination Babangida initiated the following; (a) people fund the poor who are not assisted by major
committee (IDCC). It achievements are; bank (b) community bank (c) Nigerian financial institutions.
(a) Participating at Nigerians in Diaspora agricultural land development authority FUNDING BY MULTI-LATERAL AGENCIES
forum Atlanta and London 2000. (NALDA) (d) National Directorate of 1. International finance corporation (IFC) is a
(b) Participating at Hanover, Germany 2000 Employment (NDE) (f) Better life for rural veritable source of finance and promotion of
(c) Participating at the investment forum in women private sector development. It has a project
China and South Africa 4. Between 1993-98, General Sani Abacha portfolio of $21million through the SME
(d) Match-making of Nigeria businessmen initiated; (a) Family Support Programme (FSP) capacity building facility, with an annual
with their foreign counterparts (b) Family Economic Advancement budget of $7.1 million, and has given over
2. National directorate of employment Programme (FEAP) $120million loan to private SME in Nigeria
(NDE): It was established by the NDE Act 5. Between 1999-2007, Chief Olusegun Obasanjo 2. International Development Association (IDA)
of 1989. It organs are the board, director- initiated; (a) National Poverty Eradication is focused on poverty reduction by giving
general, national advisory council and Programme (NAPEP) (b) Youth Empowerment credit at 0% rate to maturity of 35-40years at
state advisory committee. Scheme (YES) (c) Rural Infrastructures a grace period of 10years. It has about
3. National Poverty Eradication Programme Development Scheme (RIDS) (d) Social $8billion to develop countries. IDA lends to
(NAPEP): The increased global oil prices Welfare Services Scheme (SOWESS) (e) countries with PCI of less than $875 (N122,

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


5|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


500), and Nigeria has PCI of less $300 8. Export processing free zone scheme. It was 5. Between 1950 and 1999, global literacy
(N42,000) which makes her eligible to borrow established in 1991 increased from 52% to 81%. The female
from IDA. 9. Tax and other incentives literacy as a percentage of male literacy has
EXTERNAL/INTERNATIONAL BUSINESS The World Trade Organization (WTO) increased from 59% in 1970 to 80% in 2000.
ENVIRONMENT (a) It was founded on January 1, 1995 by the 6. Also, the percentage of children in the labor
1. The structure of Nigerian economy consist of; Uruguay round negotiations (1986-94) force has fallen from 24% in 1960 to 10% in
(a) Low PCI (per capita income) (b) (b) It operates based on negotiation, and 2000.
Overdependence on foreign currently under the Doha development GENERATING BUSINESS IDEAS AND INFORMATION
inputs/importation (c) high level of inflation Agenda launched in 2001 CATHERING
(d) rural under-development (e) increasing (c) It has 150 member countries, with 1. The following are necessary for starting and
unemployment rate (f) reliance on export of headquarters at Geneva, Switzerland managing a business/project; (a) motivation,
crude oil New Partnership for Africas Development (NEPAD) desire and talent (b) research and planning
2. Nigeria joined the organization of petroleum 1. It is a vision and strategic framework for 2. The reasons for starting business are; (a)
exporting countries (OPEC) in 1971. OPEC is a Africas renewed, which focus on socio- desire to be a boss (b) financial
body of countries which produces about 40% economic development (poverty, women independence (c) creative freedom (d)
of total world oil. empowerment, etc) utilization of skills and knowledge
Export Trade and Incentives 2. It was formed by 5 Africa states; Algeria, 3. Starting a business can be done in 3 days; (a)
1. The occasional shortages of Petroleum Egypt, Nigeria, Senegal and south Africa starting from the scratch (b) buy an existing
products on the domestic markets are caused 3. It highest organ is the heads of state and operation (c) obtain a formalize
by the downstream petroleum sector policy government of the AU. It also has the steering ENVIRONMENTAL SCANNING
instruments committee and secretariat 1. It is the internal communication of external
2. The downstream petroleum sector policies 4. The African growth and opportunity act information about issues that may
are; (a) state trading (b) import licensing (c) (AGOA) was passed in 2000 potentially influence an organizations or
exclusive import rights (d) administered GLOBALIZATION business decision-making
pricing (e) restrictions on foreign commercial 1. If is the increasing global connectivity, process..(Albright, 2004).
presence and administering subsides integration and interdependence in the 2. It focuses on the identification of emerging
3. The overall objective of Nigerias trade policy economic, social, technological, cultural, issues, situations, opportunities and
is to diversity the countrys export base and to political and ecological spheres. potential pitfalls that may affect an
liberalize the import trade 2. According to index, the most globalised organizations failure.
Export Incentives for Non-oil Sector country is Belgium, Austria, Sweden, UK and 3. Business opportunities are daily springing up
1. Retention of export proceeds in foreign Netherland while the least globalised in all the sectors of the Nigeria economy, as
currency countries are Haiti, Myanmar, CAR and the nations population increases and new
2. Export Development Fund (EDF or FUND) Burundi communities are established(Awaiko,
3. Export Expansion Grant Fund Scheme (EEGF) 3. Pro-globalists are the supporters of 2004)
4. Duty draw-back/suspension and manufacture- democratic globalization REASONS FOR ENVIRONMENTAL SCANNING
in-bond scheme 4. In East-Asia, the percentage of people Living 1. To discover the rapid changes in market and
5. Export adjustment fund scheme less than $2 a day decreased by 50.1%, while emerging business practices
6. Nigeria export import bank in sub-Saharan Africa, it increased by 2.2% 2. To address competitions and issues
7. Rediscounting of short-term bills

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


6|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


3. To learn external response of environment 1. Incorporated business associations are some time were directly
and influence organized and conducted through company involved.(Rosenblatt et al 1785).
PROCESS OF ENVIRONMENTAL SCANNING law regulation REGISTRATION OF COMPANIES (INCORPORATION
1. Identify the environment and organization 2. The principal legislation governing the DOCUMENTS)
need registration of companies is the companies 1. Memorandum of Association: It is a
2. Gather the information and Allied matters Act (CAMA 1990). companys charter that contains; name,
3. Analyze the information FORMS OF BUSINESS ORGANIZATIONS registered address, nature of business,
4. Communicate the result (a) The sole proprietor: Is registered with a share regulatory statement, type share capital
5. Make informed decision capital (sec 21 CAMA) authorization statement and the subscription
SOURCES OF BUSINESS INFORMATION (b) Company limited by guarantee: Is not clause of the company.
1. Information is the bedrock of a successful required to have a share capital. If promotes 2. Articles of Association: Is signed by
business operation commerce, art, science, religion, sports, subscribers to the memorandum of
2. The sources of business information can be culture, education, research (Sec 26, CAMA) association. It states the internal management
classified into; (c) Unlimited company: It is required to be of the company.
(a) External sources: Personal contact, registered with a share capital. The name of The above documents are prepared and registered
journals/magazines, books, newspapers, the company must end with unlimited and by an accredited legal practitioner, accountants and
customers, commercial database, radio, it either a private or public company. (Sec 25, chartered secretaries by Corporate Affairs
television, internet, professional CAMA). Commission (CAC).
conferences/meetings The private companies are usually small-sized, and PREPARATION OF BUSINESS PLAN
(b) Internal sources: Internet reports, the shareholders are also the directors. It 1. Planning is necessary to avoid business
conference papers, internal memoranda, membership does not exceed 50. It shares cannot failure, ensure success and to tackle
committees/meetings, sales staff, of her be sold on the stock exchange floor. The name of uncertain.
managers, after employees, internal database. the company must end with limited. (Sec 22 & 23 a. It is a written document that identifies the
3. Some categories of business projects or CAMA) nature and he context of the business
ventures; are; agricultural/agro-alhed, leather, The public companies have a minimum of 2 and opportunity and presents the approach the
paper products, textile, metal and engineering, maximum of no limit. It shares may be traded on entrepreneur plans to follow in order to
chemical and allied products, wood and the stock exchange. It must end with PLC. exploit the opportunity.(Longenecker, et al,
woodwork, service, word and woodwork. FAMILY BUSINESS 1997:15).
CHECK LIST OF FACTORS TO BE CONSIDERED IN 1. It is a owner-managed enterprise with family b. It is a written document specifying the
SELECTING A NEW PROJECT/VENTURE IDEA members predominantly involved in its business idea concisely but in
1. Basic feasibility of the venture administration operations and the details.(Owualah, 2000:12). It is a deliberate
2. Competitive advantages of the venture determination of its destiny(Pourziouris and conscious effort to state the business
3. Buyer decisions in the venture 1994) goals or objectives, manner of assets and
4. Marketing of the commodity 2. It is a owner-managed and whose goals are resources utilization in order to achieve
5. Production of the commodity associated with its owners personal profitably and meet long-term goals.
6. Staffing decisions in the venture objectives.(Harper&Churchill 1987) c. It is a blueprint for success or for creating a
7. Control of the venture 3. It is a firm in which majority ownership new business enterprise by an entrepreneur
8. Financing the venture (shares) or control lies in a single family and in (Longenecker et al, 1997:15; Green 1995:32).
FORMATION OF BUSINESS ORGANIZATION which two or more family members are or at

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


7|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


Precisely, a business plan serves as; A model, a resources used (input) and the extent to which b) Planning of sales
selling document, a game plan, a disciplinarian. It objectives are accomplished (output). c) Establish sales forecast, ensure intact
must put into consideration; Management Skills allocation of resource and give accurate
a. The insiders: Management and Employee 1. Technical skill: Use of tools, techniques and information
b. Deciding where you want to go knowledge.(Higgins, 1994:13) d) Detect the attitude of the consumer about the
c. Planning how to get there 2. Human skill: Used to build positive product
Elements of good business plan are; financial plan, relationships, solve problem e) Assessment of the market and the
marketing plan, Personal plan, and Production plan 3. Conceptual skill: Solving organizations competitor, to ensure product necessity and
OVERVIEW OF EFFECTIVE BUSINESS MANAGEMENT problem to the benefit of all(Fliggins, competitive merit
Definition of Management 1994:15). It consists of analytical, creative and Marketing Mix
1. It is the basic, integrating process of the intuitive talents. 1. It was popularized by Neil IT
organizational activity that surrounds our Code of Conduct for Managers is a set of guideline 2. It was published in the 1964 article, The
daily life. to ensure the profession of management continues concept of the marketing mix by Borden,
2. It is a universal process in all organized living. to play a vital and ethical role in contemporary used began the use of the term in his teaching
It is an operative force in all complex, business.(Australian institute of management in the late 1940s, after James Culltion who
purposive organizations 2008 code). described the marketing manager as a mixer
The concept of management is necessary due Guides to Good Management Practice of ingredients.
to the scarcity of resource to satisfy wants, 1. The manager, as a pension: must process 3. Bordens marketing mix ingredients are;
and the diverse, complex human activities. positive personal attitudes and planning, pricing, branding, distribution
The development and application of responsibilities channels, personal selling, advertising,
management skills determines the success of 2. The manager and the organization: Must take promotions, packaging, display, servicing,
a person. strategic and appropriate actions to achieve physical handling and fact funding analyses.
Uses of the term Management the organizations objectives. 4. Bordens ingredients were later grouped by
i. As a process: It is conceptual, theoretical, 3. The manager and the community: Must Jerome McCarthy; into 4ps of marketing;
scientific and analytical recognize the interests of the community and (Product decision) (price, decision) and
ii. As a discipline: It is a field of learning act to it. (promotion decision)
iii. As people: It is a managerial group. It is MARKETING FUNCTION Marketing Strategy
also called administration 1. It is getting the right commodity in the right 1. It is a process that can allow an organization
iv. As a career: It is an occupation quantity to the right place at the right time to concentrate its limited resources on the
and making a profit out of the operation. greatest opportunities to increase sales and
Functions of Management 2. It deals with every aspect of the product from achieve a sustainable comparative advantage
Basically, it creatively solves problems. It is done its inception, design, pricing, distribution, 2. It key principle and goal is consumer
through; Planning, Organizing, Staffing, Directing, selling and promotion until it get to the satisfaction
and Controlling consumer. 3. It key component is to keep marketing in line
Management Success is gained through 3. It focuses on what, how, when and where a with companys overall mission statement
accomplishment of missions and objectives. Success product is to be sold. 4. It is the foundation of a marketing plan, as
requires both effectiveness and efficiency. Efficiency Functions of Marketing well as tactics to make it effective
describes the relationship between the amount of a) It deals with the promotion and presentation Marketing Plan
of the product through strategies

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


8|Page

Visit JohnWellist.blogspot.com/p/academics.html for more


It is a set of specific actions required to successfully 1. It is the process to teaching technical staff HEALTH AND SAFETY ISSUES IN SMALL BUSINESS
implement a marketing strategy. how to perform their present duties more 1. Attention to safety issues helps business avoid
Strands of Marketing Strategy effectively and efficiently. legal penalties, improve employee morale,
a) Advertising a) Tactics is 2.
a procedure
It is anyor learning
set of maneuvers
experience
engaged
planned
into
byachieve
the and end
productivity
an and retention
b) Channel marketing aim of a goal. organization to further its goals (Peterson x Safety Issues
c) Internet marketing b) Strategic scope Tracy
is the 1979.
market penetration a) Electrical safety
d) Promotion and public relations c) Strategic Methods
strength isoftheTraining
firms sustainable
are; Apprentice,
competitive
On-the-job,
advantage. b) Fire safety: It could be classified into;
Types of Strategies Vestibule, Classroom: consist of; seminar, case Class A fires: caused by wood, paper and
1. Market dominance: It types are; leader, studies, programmed earning, role playing and furniture
challenger and follower (Late or early and late business game Class B forces Caused by flammable gases
followers) Management Development Class C: Fires: caused by electrical equipments
2. Porter Generic: It consist of product 1. It is the process of performing managers and c) Repetitive strain injury (RSI)
differentiation and market segmentation other professional to assume increased d) Slips, falls and trips
3. Innovation: It types are; pioneers, close and responsibility in both present and future e) Violence
late follower positions. MODULE 4 (FINANCING YOUR OWN BUSINESS)
4. Growth: It is classified into; Horizontal and 2. It is learning experience planned for high-level
1. Long-term fixed need: rents, equipment and
vertical integration, diversification, employees, possibly for longer duration with
machinery, repair and maintenance
intensification, analyzer prospector, and less structure (Peterson x Tracy, 1979) 2. Working / circulating capital need: salaries,
defender Welfare Services raw material, input.
5. Marketing warfare It categories are; Individual or personal service, 3. Preparation of financial reports or statement
PERSONNEL FUNCTION Group service. determine the access to fund from financial
Recruitment TIME AND PROJECT MANAGEMENT institution
1. It consists of a set of activities that improve Time Management
the number and quality of individuals, who 1. It is the various means by which people Sources of Finance
apply for employment, as well as the effectively use their time and other closely
probability that qualified and competent related resources in order to make the most a) Divers Funds
applicant will accept employment offer (Hill & out of it. b) Relations or Friends
Mc Shane, 2008). 2. It refers to principles and systems that c) Co-opted partners
2. It involves the request for job candidates, and individuals use to make conscious decision d) Money lenders, and other informed financial
looking for the right people to take up the job. about activities that occupy them. bodies e.g.: Rotating savings, credit bodies,
Types of Recruitment Strategies for Managing and Evaluating Time cooperative etc.
a. Internal: It is achieved through companys It is determined by the nature and size of the job. It
notice boards and memo circulation. consist of;
b. External: It is done through, employee (a) Crisis management
Formal financial Institution
recommendations, advertisements, (b) Project management: It stages are; need
manpower service commission, private identification, initiation, planning, execution
1. Formal market is regulated and controlled by
employment bureau, universities and colleges and control of the project
government. it institutions can be classified
and professional organizations. (c) Time evaluation
into
Employee Training (d) Delegation and control

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


9|Page

a)
Visit JohnWellist.blogspot.com/p/academics.html
The conventional Banks: Commercial and of some of the parts of the product if (a)
for more
Transactionary purpose: daily needs of cash
merchant banks produces to the small firm. The small firm is for business. e.g. raw material, fueling,
b) The specialized Banks: Development people called sub-contractor and big firm is called salaries, personal needs
and community banks. parent. (b) Precautionary purpose: for unforeseen
2. At 2004, Nigeria had about 89 deposit banks, contingencies e.g. sudden rise of raw
with over 3000 branches, but by December The availability of loans to SMEs or SSEs by banks, material, illness, accident etc
2005, due to recapitalization policy, it there is a strategic on both quantitative and (c) Speculative purpose: for taking advantage of
reduced to 25 qualitative considerations. Between 1980 and 1986, profitable opportunity in the future.
Nigeria banks empowered the SSEs with N3,988. 6
Development banks/Development finance million from 1987 to 1989, it was N15,043. 5 million, Cash flows of an organization
institution while between 1992 2002, it was 251,604. 55
million. It consists of sources of cash to an organization and
a) Nigeria industrial development Bank (NIDB) how its been invested to increase the earning
b) Nigeria bank for Commerce and Industry In 1999, the CRN through the bankers committee of capacity.
(NBCI) established in 1973 the cratered institute of Bankers of Nigeria (CIBN)
c) Nigeria Agricultural and Cooperative Bank initiated the small and medium Industries Equity (a) Borrowing from bank in form of short-term
(NACB) Investment Scheme (SMIEIS) to fun SMEs, through loan or overdraft. Banks considers firms in
d) Federal Mortgage bank, of Nigeria (FMBN) the 10% of banks pre-tax profits. It also requires the following ways; capital, capacity,
1) However, NIDB and NBCI, as well as NEFUND banks pump 60% in the manufacturing, 30% to the competence, credibility, collateral,
merged to become the Bank of Industry (BOI) service and 10% to other sector. confidence.
in 2001. (b) Selling of securities such as commercial
2) NACB (peoples Bank) and family economic Financial Statement paper, bankers acceptances, certificate of
advancement programme (FEAP) merged to deposits, treasury bills, stocks, debenture,
become the Nigeria Agricultural Cooperative 1. It is a useful instrument to determine the shares.
and Rural Development Bank (NACRDS). profitability and liquidity of an organization (c) Commercial finance companies
2. It is a quantitative and qualitative (d) Sales
Specialized Funding Schemes statements of the actives and performance
of an organ within a year (revenue and The investment of excess or idle cash is influenced
1. In the late 1980, the Babangida tenure expenses, assets and liabilities and profit x by; safety and liquidity.
established NERFUND loss).
2. World bank
3. Africa Development Bank, Managed by Cash Budget It is a statement of projected monthly
Nigeria Export import Bank (NEXIM) cash inflows and cash outflows from different
4. Leasing: Is a practice of entering into an sources to an organization and the net cash balance
agreement with a firm for the use of an for a year.
equipment and machinery for business.
5. Sub-contracting: Is also called ancilliarization Reasons for Holding Cash Estimating Cash Balances
(India) or Forster-father (Indonesia). It is
when a big firm contracts out the production

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


10 | P a g e

1) The Bourmol model: If adopt tools of a) Profitability or efficiency ratio ii) Quick ratio/acid test =
inventory management in the cash
management i) Return on asset (ROA) =
iii) Cash ratio: Cash is the most liquid
financial assets

=
2) The miller model: it assumes an uncertain
cash-flows by determining an upper limit iv) Activity ratio: It indicates how
and return points of cash balance, which is efficiently on organizations assets
the limit at which is set either when cash ii) Gross Profit Margin (GMP) = are used
is converted to marketable security. (a) Inventory turnover ratio: It shows how
effectively inventory is managed.

=
Users of Financial Statement
iii) Net Profit Margin (NPM) = or
a) a shareholder or prospective investor b) Account payable turnover ratio: it helps
b) government and its agencies the analyst to understand the company
c) lenders and creditors pattern of payment to supplier.
d) workers and employees iv) Return on equity (ROE) =
e) customers Note = Net worth = total assets total
f) management liabilities.

Framework for Analyzing v) Return on capital employed (RCE) = c) Solvency ratios:


Note: Capital employed = 1. Long term solvency: It the ability of a firm
a) Time series method: It is called trade analysis.
It identifies the GDP total asset current liabilities to generate a stream of cash inflow to
b) Cross industrial averaged sectional method: it maintain its productive capacity and meet
identifies the across business B) Credit Risk Ratios: It is the ability and interest and payment obligation. It is the
c) The peer group method: It compares willingness of a borrower to pay his debt level of the organizational financial
performance similar companies. leverage.
Liquidity: It is the companys ability to
Tools for Analysing Financial Statement generate cash for circulating assets and Financial leverage is the proportion of debt in
immediate debt repayment. It can be the capital structure. The higher the debt ratio,
1. Financial ratio: Is used for evaluating measured by; the higher the solvency risks.
companys profit performance and
assessing credit risk. i) Current ratio= (cash, (a) Long term debt to asset ratio =
debt and stock account)
Kinds of ratio

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


11 | P a g e

(b) Interest coverage = Ordering Costs is the cost of placing an order to Companies that neglect the tenants of corporate
stock into a firm/company. It include clerical and governance, result in bankrupting, liquidation and
(c) Long-term debt to tangible asset =
related costs. .e.g. cost of raw material, total entropy.
maintenance of machine.
(d) Gearing = Concepts of Corporate Governance
Holding Cost It is also called carrying cost. It is space
and storage cost. E.g. rent of warehouse, insurance, 1. It has become a catch-all concept, meaning;
lighting, opportunities cost of fixed capital, wastage, many different things to people.
WORKING CAPITAL MANAGEMENT leakage loss etc. 2. It deals with the ways in which suppliers of
finance to corporations assure themselves of
1. The main goal of any forward-looking and Stock-out Cost is a penalty cost for not having a getting a return on their
profit seeking organization is to remain in required level of necessary stock available for use investment(Shleiferand Vishny, 1997 1937
business and it is determine by effective when needed. cited in OECD, 2002).
management of working capital. 3. It is the relationship of a company to its
2. Working capital management involves the THE ECONOMIC ORDER QUANTITY (EOQ) Model shareholders or more broadly as its
financing and management of working capital, relationship to society (financial times 1997).
i.e. current and current liabilities. It is the level of stock held by a company that 4. It is a field of economics that investigates how
3. NET CURRENT ASSETS is current assets less minimizes all the ordering, holding and stock-out to secure and motivate efficient management
current liabilities costs. It is the optimum level of maintainable stock. of corporations by the use of incentive
4. Working capital decision is of short-term mechanism (contracts, designs,
decisions, which determines whether the firm Debt Management legislation)(Mathiesen, 2002).
would see the long run. 5. It is concerned with holding the balance
5. The key management of working capital items 1. Trade debt and discounts are means of between economic and social goals and
that are commonly located under current increasing sales of a firm. between individual and communal goals. 9Sir
assets are; management of stocks, debtors 2. Factoring of trade debts is the major means of Adrian Cadbury, Global corporate governance
and cash. minimizing the incidence of bad debts. Forum, World Bank, 2000).
6. The key current assets and current liability Factoring is sell trade debts for immediate 6. It is the system by which companies are
items are; trade debtors and creditors; bank cash. It involves 3 basic services; directed and managed (ASX Principle of Good
overdraft and cash at hand or bank, and they (a) Provision of accounting facility corporate governance and best practices
are linked by stocks. (b) Provision of credit insurance facility recommendations, 2003).
(c) Provision of finance 7. It is the system by which business
Management of Stock 3. Over trading is when a business trying to corporations are directed and controlled
support large volume of trading activity with (OECD April 2002).
1. These are 3 forms of stocks; raw materials, little long-term capital at its disposal. 8. It is the relationship between corporate
work-in-progress (WIP) or finished goods (FG).
managers, directors and the providers of
2. Effective management of stock involves the CORPORATE GOVERNANCE
equity (international chamber of commerce).
minimization of all costs pertaining to stocks.
9. The central theme of corporate governance is
financial control. It focuses on; accountability,
equity, and transparency.

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


12 | P a g e

10. In Nigeria, corporate governance watch word Vision and Mission 2. Unilever: To add vitality to life. We meet
is DUE PROCESS with emphasis on honesty, everyday needs for nutrition, hygiene and
probity, accountability and objectivity (a) It is a glimpse of the future wished for personal are with brands that helps
11. It is a system of which companies are lawfully (b) Organizational vision is the ability to perceive people feel good, and get more out of
managed to obtain the greatest practicable the many possibilities that are available to life.
enhancement of investment..(Barrister your company and to create an ideal picture
Assue Ighodalo). of the future Core Purpose
12. It is about promoting corporate fairness, (c) The making of vision statement is the function
transparency and accountability.(J. of top management, so it can change from 1. HP: to make technical contributions for the
Wolfensohn, Financial times of June 21, 1999). time to time. advancement of welfare of humanity.
13. Company governance operate through 2 (d) Visions are not some with mottos. Motto is a 2. Walt Disneys: to make people happy
relationships; creed.
(a) Owners/stakeholders and corporate (e) Mission statement is statement of being-the Principles of Good Corporate Governance
management reason for your companys existence
(b) Corporate management and employee (f) Core values are enduring character of an 1. they are guidance for implementation
organization 2. They are defined by the Organization for
Essence of Corporate Governance (g) Core purpose is the organizations reason for Economic Corporation and Development
being (OECD) in 2004.
a) To still confidence in owners and operators of
an enterprise Vision Statement They include;
14. Corporate governance has to be planned and
institutionalized. It is driven by well 1. Coca Cola: Putting a coke within arms reach (a) promote transparent and efficient markets
articulated vision and mission. of every consumer in the world. (b) protect the exercise of shareholders rights
15. A major thrust of corporate governance is 2. Procter and gamble: be either the first or (c) ensure equal treatment of shareholders
economic efficiency, and the critical issue is second consumer products and services (d) recognize the shareholders right
profit maximization company in the world in market share (e) ensure disclosure
3. UNILAG: To be a top class institution for the (f) ensure strategic guidance of company
GUIDING PRINCIPLES OF GOOD CORPORATE pursuit of excellence in knowledge through
GOVERNANCE learning and research, as well as in character BOARD AND MANAGEMENT DUTIES AND
to humanity RESPONSIBILITIES
Vision and Mission
Mission Statement Board of Directors
a) It is a glimpse of the future wished for
b) Organizational vision is the ability to perceive 1. Emzor: we have an unwavering 1. it has the primary responsibility to oversee
the many possibilities that are available to your commitment to provide our consumers the companys management
company and to create an ideal picture of the with healthcare products and services of 2. it is the ultimate decision-making of the
future. consistently high quality, made reality company
c) The making of vision statement is the function available at prices, which create value for 3. it is headed by a chairman, appointed by the
of top manage all stakeholders. proprietor or shareholders at AGM

GST307 DRILL by ARISTOKRAT CONSULT..08168031251


13 | P a g e

4. A director a person duly appointed by the and organizations to which they belong. It may be
company to direct and manage the business viewed from 3 perspectives, which are;
of the company.
(a) a general pattern of life e.g. Christian or Buddhist
Roles and responsibility of BOD ethics

a) Establishing the companys mission, vision (b) a set of rules of conduct e.g. professional ethics
and values
b) Setting the strategy and structure (c) a branch of philosophy
c) Delegating to management
d) Holding the management accountable 2) Professional ethics can be; situational or moral
e) Supporting assessing the CEO ethics
f) Ensure legal, ethical and financial integrity
g) Recruiting, menting and assessing the board Ernest Hemmingway said in Death in the
h) Setting and reviewing employees Afternoon, what is moral is what you feel good
compensation after, and what is immoral is what you feel bad
i) Establishing an effective management after.
succession plan
(a) Personal leadership proceeds corporate
Barriers to the Effectiveness of Boards leadership and private victories proceed
public success. - Stephen
a) Micro-management (b) The more we build our lives on principle the
b) Ineffective nominating committee more effective and successful we become in
c) Absence of rotation plan the long-term Convey
d) Non-removal of unproductive members
e) Small membership boards
f) Lack of functioning committee structure

BUSINESS ETHICS AND CORPORATE INTEGRITY

The most classical anecdote to the essence and


need of business ethics and corporate integrity was
introduced Kaptein and Scott Avellino (2005).

Concept and Dimension of Ethics

1) Ethics is a system of accepted beliefs and


principles of conduct typically based on moral
imperatives that govern the behavior of individuals

GST307 DRILL by ARISTOKRAT CONSULT..08168031251