International Management Decision Making

[M001098]

Module Leader: Dr Noah KarleyEmail: Noah.Karley@anglia.ac.uk

Room LAB322 Ext. 5739

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Module Objectives• Provide an introduction to firms, managerial

objectives, business plan and the decision making process

• Evaluate the ways in which economic, financial and regulatory forces impinge on management decision making within a multinational context.

• Critically assess the role of the market in the decision making process of the international manager.

• Apply appropriate quantitative and problem solving techniques to clarify the nature of managerial decision making.

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Module Structure• Lecture 1: Firms and Managerial Objectives• Lecture 2: Managerial Decision Making Process• Lecture 3: Economic Principles and Management

Decision Making• Lecture 4: Demand and Supply Estimations and

Forecasting• Lecture 5: Production Functions and Cost Estimation• Lecture 6: Market Structures and Pricing Strategies• Lecture 7: Financial and Investment Decisions• Lecture 8: Macroeconomic Environment of Business • Lecture 9: Business in the International Environment• Lecture10: Government Regulations and Management

Decisions

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Assessment• This module is assessed by means of an

assignment of no more than 4,000 words. • The Assignment accounts for 100% of the

overall module assessment• The completed assignment must be submitted

by 5pm GMT on Monday 6th January 2014.• For this module you are required to submit

your final assignment via Turnitin.

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Reading List• Key text

– Baye, M., 2010. Managerial Economics and Business Strategy, 7th Edition, McGraw-Hill

– Sloman, J. (2012) Economics, 7th Edition, Prentice Hall, Pearson Education, Harlow.

• Others texts– Sloman, J., Hinde, K., and Garratt, D., 2013. Economics for Business,

6th Edition, Pearson Education (EB); – Griffiths, A., and Wall, S., 2012. Applied Economics, 12th Edition,

Pearson Education (AE); – Griffiths, A., and Wall, S., 2011. Economics for Business and

Management ,13th Edition, Pearson Education (EB); – Keat, P., and Young, P., 2009. Managerial Economics, 6th edition

FT/Prentice Hall (ME). • Other useful resources

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Lecture 1

Introduction to the Module: Firms and Managerial Objectives

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Session Outline• Goals and Objectives of a Firm• Basic Business Functions• Business Planning as a Function of

Management• Environmental Factors affecting Business

Decisions• Factors Influencing Business Success

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Goals and Objectives of a Firm

• Background• Definitions• Differences • Basic Rules

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Background

• The study of economics holds that all companies are in the business to maximize the wealth of its owners.

• Most Admired Businesses: “Balancing and exceeding the expectations of all its Stakeholders”.

• This requires quantitative methods to achieve

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Who are these stakeholders?

• Shareholders and promoters• Customers• Employees• Suppliers and partners (including

Contractors and Agents)• Government• Society

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Definitions

• Goals and Objectives are written or verbal declarations describing what the organization wants to accomplish in the short- or long-term (Vision).

• Goals and objectives are often used interchangeably.

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Differences

• Goals and objectives are distinct concepts that cannot be attained without the help of the other.

• A goal is a long-term aim the company wants to achieve.– Goals are more vague and less structured.– Goals are very hard to measure

• Objectives are specific steps you take in reaching a goal. – Objectives tend to be concrete in nature– Objectives can be easily measured.

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Three Basic Rules

• Goals and Objectives that measure success must meet three criteria– Measurable and quantifiable– Has set timeframe to be met– They must be attainable/realistic.

• Thus goals must be S.M.A.R.T. – Specific, Measureable, Attainable Relevant

and Time-Bound

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Achieving the 3Es

• Maximize Efficient Use of Labour• Optimize Price and Output• Sustainable Competitive Advantage• Human Resources• Systems• Solution • Efficiency, Effectiveness, Equity

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Basic Business Functions

• Organising• Hiring/Human Resource• Establishing Corporate

Offices• Funding• Producing and inventory

management• Recording and reporting • Growing• Monitoring success

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Getting Organized

• Have clear, specific idea of what you intend to sell,

• To whom and • Strategies necessary to enter your target

market.

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Hiring

• Personnel decisions are cardinal in the corporate context.

• Useful to research the job market and select qualified professionals

• Hiring the right people can help expand your company in the long term.

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Establishing Corporate Offices and Funding

• Head Offices– Find appropriate premises for your corporate

headquarters. – Renting decisions depend on your

• startup capital and • the business size

• Seeking Funds– Think about whether equity stakes is more

appropriate for you than borrowing.

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Producing and managing inventories

• Manufacture a Product or Provide a Service– Having a clear, focused idea of your product or

service can help you efficiently adjust other strategies, such as pricing and distribution.

• Manage Inventories– Depending on the line of business you're in, you

may need to formulate an adequate strategy for storage and maintenance.

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Recording and reporting• Report Operating Data

– Indicating to potential investors whether your business is gathering steam. Financial statements include a balance sheet, profit and loss, cash flows and equity capital.

• Pay Taxes– Failure to pay taxes can be detrimental to your

company,

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Growth and success

• Think about Growth– Study your customers' needs and purchasing habits,

focusing on how the competition operates. – Think about how to improve customer loyalty and

gain market share.• Measure Success

– Measuring success may have different meanings for different people

– But in the modern economic environment, appraising your bottom line gives you a clear idea of your company's performance over a specific period, such as a quarter or fiscal year

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Business Planning as a Function of Management

• Business Plan• Planning and its

purpose• Effects of Planning • Importance of

Planning in business

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Business Plan• A business plan

– Outlines business functions– Lists your key personnel,– Gives preliminary budget needs, – Describes your sales and marketing approach– Projects revenue.

• Understanding the function of a business plan will help explain why you should put effort and resources necessary to create one

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What is Planning?

• Process by which management teams and executives set business – Objectives– Analyze the market and industry – Determine the best ways to reach those goals.

• Planning is ongoing– frequently evaluate work as compared to the plan– clearly communicate plans to employees and be

open to feedback and ideas to improve on the plan.– Delegate work and oversee as it progresses and

make changes to the plan when necessary.

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Purpose of Planning

• Plans are put in place to– Motivate employees– Rally the company around a goal

• Helps management efficiently organize– Tasks, Projects, resources, manage

employees and designate tasks.• Planning gives direction to a company.

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Effects of Planning

• It truly can make or break a company• Set challenging, realistically achievable goals.

– too high bars will set employees up for failure, which hurts morale.

– If goals are met, employees will take pride in their work, which is good for productivity.

• Success improves the company– better off financially and – Better positioned in the industry

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Uses of a Business Plan

• Attracting Personnel• Attracting Investment• Company Blueprint

– You create your business plan based on your initial vision for the company.

– It allows you to stay on track with your vision

• Progress– Create ways of measuring progress. – Develop milestones and set goals for them. – Re-evaluation of your methods and an update

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Environmental Factors Affecting Business Decisions

• Internal Factors

• External Factors

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Internal Environmental Factors• Employees

– The caliber, attitude and work ethic of a company's employees

• Capital– quality of their capital with respect to their available

money

• Cash Flow– Company's ability to generate income and pay its bills– Maintaining a steady cash flow is a balancing act.

• Other Considerations– External factors like steep recession compels layoffs,

takeover threat influence the company's well-being

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External Environmental factors Factors

• Competitors• Customers• Suppliers• Economics and Availability of Resources• Government Regulation• Infrastructure and Deliverability• Geography and Natural Disasters• Demographics

 

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Factors Influencing Success

“Success is not a consequence of luck, nor is it a matter of mere genetics… achieving success is the natural outcome of a set of common, identifiable traits” Napoleon Hill

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Success factors• Goals• Positivity• Mastery• Risks

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Seminar Question

• Meet with Module Tutor to discuss how weekly seminars are arranged. Note that the first seminar in week 2 to be handed over during this week seminar classes.

• Write up a Business Plan bearing in mind the ff:– A business plan

• Outlines business functions• Lists your key personnel,• Gives preliminary budget needs, • Describes your sales and marketing approach• Projected revenue.