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1.   Production can be defined as the creation of wealth which in turn,
adds to society's welfare .It is a vital link in the process of satisfying
wants; As man's wants are almost unlimited relative to the resources
available, it is important in production, then, that the limited resources
be used efficiently in order to create the maximum possible welfare.
2.  At a general level, all economies, irrespective of their organisation,
face the same basis decisions of what, how and for whom to produce, subject
to their production possibilities. In a mixed economy, such as the United
Kingdom, some production decisions are left to private enterprise and the
market mechanism whilst others are taken by the government: the production
by shoes for example, is the result of the decisions of private firms,
where as the quantity of hospital services or military tanks produced is
the result of political decisions.
3. The firm and its   The total level of output in an economy is of
objective      course, the sum of the outputs of all the individual firms.
It is important at the outset, therefore, to explain what is meant by a
and to consider some of the main factors which motivates firms to produce
goods and services.
4. Definition: A, firm is a decision-making production unit which
transforms resources into goods and services which are ultimately bought by
customers, the government and other firms.
5. Traditional economic theory has assumed that the typical firm has a
single objective-to maximise its profit. No distinction is drawn between
the objective of a comer-store proprietor and that of the largest firm. The
modern theories of the firm, however, do acknowledge that firms may -have
other objectives, such as sales-revenue maximisation or the maximisation of
managerial utility.
6. Types of busi ness units. Consider now the legal status of the
 types of firms in a western economy, such so the United Kingdom.
7. One-man business. In terms of numbers, the one-man business (or sole
proprietorship) is the most common type of firm. Typically it
is a small-scale operation employing the moat a handful of people. The
proprietor himself is normally in charge of the operation of the business,
with the effect that he is likely to be highly motivated as he benefits
directly from any increase in profits. As the one-man business is small it
can provide a personal service to its customers and can respond flexibly to
the requirements of the market. Decisions can be taken quickly as the owner
does not have to consult with any directors.
8.    Disadvantages associated with a one-man business are that the owner
cannot specialise in particular functions but must Jack-of-all trades, and
the finance available for the expansion of the business is limited to that
which the owner himself can raise. An even bigger disadvantage is perhaps
that there is no legal distinction between the owner and his business: The
owner has, therefore, unlimited liability for any debts incurred by the
business, so that in the eventually bankruptcy all his assets (for example
his house and car) are liable to seizure.
9 One-man business as are common in retailing, fanning, building and
personal services, such as hairdressing.
10 PARTNERSHIP. The logical progression from a one-man business is to a
partnership. An ordinary partnership contains from two to twenty partners.
The main advantages over a one-man business are that more finance is likely
to be available the influx of partners, and that each partner may
specialise to some extent (for example, the marketing , production or
personnel functions). The major disadvantage, once again, is that of
unlimited liability. As each partner is able to commit the other partners
to agreements entered into, all of the others may suffer from the errors of
one unreliable or foolhardy partner.
I I   Partnerships are oftcn found in the professions-for example, among
doctors, dentist, solicitors and architects, Ultimately, the upper limit on
the number of partners is likely to restrict the amount of finance
available to the partnership and so place a limit on its growth. This,
together with disadvantage of unlimited liability, means that many growing
business eventually form joint-stock companies.
12. JOINT-STOCK COMPANY, the Joint-stock company with limited liability
developed in the second halt of the nineteenth century. It helped to
promote the development of large companies by providing a relatively safe
vehicle for investment in industry and commerce by a wide cross-section of
the community. The liability of the shareholders is limited to the amount
they have subscribed to the firm capital and each shareholder knows the
extent of his potential loss it the company goes bankrupt. So make
information available to potential shareholders, all joint-stock companies
are required to file annually with the Registrar of Companies details of
their profits, turnover, assets and other relevant financial information,
such as the remuneration of the directors.
13. A joint-stock company can be either a private limited company or a
public limited company. The shares of a private cannot be offered for sale
to the public and thus are not traded on the Stock Exchange .The shares
cannot be transferred without the consent of the other shareholders.
Private companies require a minimum of two and a maximum of fifty
shareholders (or members), though the upper limit may be exceeded in the
case of employees or former employees of the company.
14.   The shares of a PUBLIC company can be offered for sale to the public.
A public company requires as minimum of two shareholders, but there is no
upper limit. Shares are freely transferable and the company is required to
hold an annual general meeting where shareholders are able to question the
directors, to change the company's articles of association, to elect or
dismiss the board of directors, to sanction the payment of dividends, to
approve the choice auditors
and to fix their remuneration. In practice, attendance at annual general
meetings is low, and normally the approval of the director's
recommendations is a formality.
15.  Although only about 3% of companies are public companies, most large
companies are public companies. Indeed, they account for about two-thirds
of the capital employed by all companies.
16. CO-OPERATIVES. In the'United Kingdom consumer co-operatives have been
successful since the first co-operative was formed at Rochdale in 1844. The
movement, which comprises a familiar section of the retail trade, is based
on consumer ownership and control, al-though there is a professional
management. In 1985 it was reported that there were 8,5 members of retail
cooperative societies in the United Kingdom.
17.   Producer co-operatives, on, the other hand, have not generally been
successful and are not particularly significant in the United Kingdom. The
recession of the early 1980s, however, led to an upsurge in the number of
producer co-operatives. In many cases they sprang from on attempt by
workers to continue production and to maintain jobs after a parent company
had decided to close or to sell a plant. This type of co-operative is
sometimes referred to as "phoenix co-operative". The Co-operative
Development of producer cooperatives reported the existence of 911 producer
co-operatives with around 20000 members in 1984. In some other countries of
the EEC, such as France and Spain, producer co-operatives are of more
significance than in the United Kingdom.
18. PUBLIC CORPORATION. The public corporation is the form of enterprise
that has developed in the United Kingdom for those areas where the
government has decided to place production in the hands of the state.
Whilst there are early examples of the formation of public corporation,
such as the Port of London Authority (1909) and the British Broadcasting
Corporation (1927),Boat were formed in the period of the post-war Labour
government of 1945-51. The
government appoints the chairman and the board of directors which is
responsible to a minister of the Crown for full filing the statutory
requirements for the public corporation aid down by Parliament. The
minister is supposed not to concern himself with the day-to-day running the
19. Recent government policy has been to return state-owned enterprises to
the private sector. Privatisation is the word used when the ownership of a
state-owned asset is transferred to private individuals or companies.
20. Examples of privatisation include the sale of British Aerospace (51%
sold in 1981 and 49% 1985) and of British Telecom (51% sold in 1984).

            Effective Communication
Effective communication is absolutely crucial to good management. You can't
get the best out of people unless you can communicate effectively with
them, and they with you.
It seems easy enough. All you have to do is to tell your subordinate what
you want him to do, and he gate on with it. A few words of encouragement or
criticism nay be needed, but that's all there is to it. If only it were so
simple. The manager has to consider three forms of communication , any of
which can cause him problems if he is not careful. They are:
Х oral
Х written
Х non-verbal communication.
Oral communication
Speaking directly to someone in person, by telephone or via a television
link is the most common form of human communication. Oral communication is
instantaneous, allows great flexibility, and permits sentiment to be
combined with an intellectual message without difficulty. Effective oral
communication depends on a number of factors which can't always be taken
for granted. These are:
Х language
Х the style used
Х the supporting signals
If a manager was asked to take charge of a group of Chinese workers he
would probably expect to have a language problem since everyone knows that
apparently identical words can have very different meanings to people
living in different countries. If, on the other hand, the group comprised
his own countrymen he would assume a shared vocabulary. And terms of
ordinary words he would be right. The problem is that management includes
many complicated issues which require the use of specialised words. If both
parties don't share the same sense of what these words mean, the scope for
misunderstanding is considerable. As a result the manager's intentions are
often not fulfilled. This in turn causes him frustration and the employee
confusion, and perhaps a sense of Injustice.
It is only technical or abstruse language which causes the problems; It can
just easily happen with what would otherwise seem commonplace words. Any
new manager has to take particular care to explain his meaning since his
predecessor might well have used words in different nay. Some examples
serve to illustrate the point. The interpretations are not meant to be
typical-only what can happen.
|What the       |What he means  |What the       |
|manager says   |               |employee may   |
|               |               |think he means |
|If you have the|I want you to  |You have the   |
|time           |do it right    |choice         |
|               |away           |               |
|Finish it this |Even if you    |You have until |
|evening        |have stay late |5.30           |
|I'm            |You've got to  |This is        |
|disappointed   |improve or     |friendly hint  |
|with your work |you're fired   |               |
|We shall       |You're in the  |You've got the |
|certainly bear |running        |job            |
|in             |               |               |

|mind           |               |               |
|We shall have  |You're fired   |Take you time  |
|to let you go  |               |to look around |

The list of opportunities for misunderstandly becomes immeasurably longer
when meetings are involved. Managers addressing a group of staff mixed by
seniority, age and sex have no tiptoe through a potential minefield of
confusion. If the issues are ones of personnel management, for example,
organisation, pay scales, working practices or whatever, they should take
great care the words they use.
Imagine such a meeting. The manager says: "I think we could be more
efficient if we combined order checking with computer logging so I've
decided to transfer Stan and Susan to Michael's section. I've asked Mike to
join the executive committee and he'll take responsibility for liaison with
the factory...
By saying, "we could more efficient", does he really mean that it's a
shambles at the moment? If so the staff presently involved may well find it
less than gratifying. The manager's decision to transfer Stan and Susan
sounds like a directive which doesn't involve any sort of consultation.
This may or may not be true, but the opportunity for misunderstanding is
there. Mike's joining the executive sounds like good news. The likely hood
is that the staff are either unsure about what its powers are or who is on
it anyway. What does liaison with the factory entail? Was someone already
doing the gob who has been given the elbow? And soon and so forth.
Things often get worse when question are asked the questioner may use
"insider" language which underlines his relationship with the manager. For
example, "Isn't the same trouble we had with Frank Barnes? No one else has
a clue who he was and the Manager has either to ask the questioner to
explain what be means or pass on quickly leaving an air of mystery in his
wake. Quest oners often use meetings to make implicit political points
about the organisation
and their own position within it. Some use the opportunity to score points
off the manager, if he allows it.
Whether the meeting is face to face or in a group .the manager has to bear
three principles in mind:
Х he should always be prepared to explain what he means if he has any
reason to suspect that he's being misunderstood ;
Х He should always be in control of the communications process when dealing
with subordinates and determine the vocabulary to be used ;
Х he should strive to make his own use of language as clear and
unequivocal as possible. Telephone calls. .These too can hold pitfalls
Х you don't know what the other person is doing (or who he is with);
Х you can't see his facial expression;
Х it's very easy to mishear what he has said. There are few things worse
than giving instructions on a conference phone. Not only is the voice
disembodied, but the person receiving the call will suspect that is being
overhead. This discourages open response and mumbled ascent is often the
only reaction the caller receives. Obviously, a good deal of man management
is conducted on the telephone. Here are some simple rules which is sound
for a manager to follow :
Х Be friendly-the recipient doesn't know if you're pleased or angry with
him at his ease straight way;
Х Be dear-explain the purpose of your call including your Instructions (if
there are any) before asking for comment. This gives the recipient, time to
assimilate the whole message end not waste time by disgracing.
Х Confirm that the message is understood-this la essential because words
become garbled very easily. "Offer them 15 per cent discount" can easily
become "offer them 50 per cent discount".
Х Listen carefully to the recipient's comments-ask for them to be repeated
if you haven't wholly understood them.
Х Close cheerfully-however miserable you say feel your instructions are
more likely to be implemented it you are cheerful and encouraging...
Written communication
Communication in writing should have the advantage of clarity since the
writer has the opportunity to marshal his facts, present the case and make
a clear recommendation.  Also several people can be communicated with
simultaneously, particularly in this age of electronic mailboxes and the
fax machine.
In the context of man management, however, there are pitfalls which should
be avoided.
Instructions can often be given more clearly in writing then orally.
Remember that the recipient lacks the opportunity to question the manager
directly and it is very easy for a feeling of authoritarianism to creep in,
"Give me an analysis of the Sales figures for May, broken down by product
and customer type," may be unequivocal, but it can sound like a military
order and the employee receiving the memorandum might be forgiven for
assuming a crispness that was unintended. Small organisations use fewer
internal memoranda to give instructions than large companies, and everyone
probably benefits from the smaller amount of paperwork and the greater
informality involved. It instructions are given at a meeting, it is always
good practice to confirm the main points in writing afterwards, whatever
the size of the organisation. Personnel Issues are also better dealt with
orally with subsequent accurate confirmation in writing. Pay rises,
promotions, changes in job specifications and the like, should not be
communicated initially in writing, however good the news for the employee.
Face-to-face meetings reinforce the relationship with the employee and
should always be used.
Disciplinary matters are sometimes dealt with in writings because the
manager is reluctant to confront the employee. This practice is always
wrong and will breed misunderstanding and resentment. It is even worse when
the memorandum is copied to others not directly concerned with the
employee's welfare. If, for example, someone another part of the
organisation, complains about an employee's efficiency or behaviour it is
tempting for the manager to kill two birds with one stone. A memo of
apology copied to the employee may placate the complainant, but will,
almost certainly infuriate the employee. If the manager needs to respond to
the complaint in writing he must see the employee first and ideally show
him the draft memorandum before sending if off. Notice boards offer a
valuable means of keeping a team up to date will relevant personnel
developments. The language used should, however, always be chosen with
care. For example, a notice which simply says, "Joe Smith is leaving us
after for years service," is doubtless factually correct, but offers
endless scope for different interpretations. Did he fall or was he pushed?
Are they glad to see the back of him or is he grieved over? The addition of
the world "valuable" before "service" and phrase "and we wish him well in
his future career" could resolve all doubt. Copies of memos and letters
should only be sent to those who have a relevant interest in the matter in
hand. Sending a copy of a memo to recipient's superior "for information" is
usually flagrant politicking and should be discouraged. Ease of copy-making
unfortunately encouraging widening the audience for memos well beyond the
bounds of common sense. Since recipients often feel honour bound to keep
the copies they receive, the real cost to the organisation can be enormous.
Letters written to employee should always conform to the style normally
used by his manager. Thus if the employee is "John" to him letters
addressing him as "Dear Mr. Smith", "Dear Smith", or "Dear Sir" should
always be avoided. It is part of the good manager's task to make sure that
all of the good manager's task to make sure that all communications with
employee reinforce the organisations normal style, whether formal or
Getting the beat out of communication. The key component in all
communication is the trust and understanding which is built up through face-
to face conversations. Telephone conversations are necessary but less
effective, and written   communications have many pitfalls for the unwary.
The manager needs to use all three forms which skills which may not come
naturally to him. Training in interviewing. Charring meetings, effective
speaking and effective writing is readily available.; Even in the smallest
organisations an investment in this branch of training is always soundly
Imagine yourself in a sales meeting with a client. As the client tells you
how pleased she is with your products and how she plans to recommend an
even larger purchase this year than last ,you sense that something is
wrong. Her voice is high-pitched and rapid and her eyes over yours focusing
instead on the ballpoint pen she is nervously checking on the desk. About a
week after the meeting, she sends you a note, telling you that the entire
deal is off. You are disappointed but not surprised for you had understood
the non-verbal messages she was sending at the meeting.
According to Albert Mehrabian a leading authority on non-verbal
communication, all our emotional messages are communicated without words.
We tell others what we really feel through our facial expressions, eye,
leg, hand, and torso movements. We also communicate through the pitch,
loudness, and cadence of our voice, the distance we maintain between
ourselves and others in conversation, our clothing, and more. Since non-
verbal communication can tell you what other people are saying without
their ever uttering a word, its importance in business communication is
obvious. Here are a few of the ways in which non-verbal messages can be
sent and used:
Х Even in business meetings, the eyes can be the mirror of the soul. By
averting your gaze, you tell those around you that they are not getting
their message across or that something negative is going on. If you choose
instead to stare directly at a meeting participant, you will probably make
the person extremely anxious. If you are in the midst of an argument the
harder you stare the menacing you seem.
Х Gestures which include the position and movement of the hands, feet,
arms, legs, torso, and shoulders, communicate a variety of non-verbal
messages. A handshake, for example, often expresses a persons real
feelings. A limp handshake is a sign of reserve and lack of enthusiasm
while a strong, powerful grip communicate confidence.
Х In a disagreement, you may find your boby turned away from the person
with whom you are arguing. If, on the other hand, you are on good terms
with your business associate, you are more likely to directly face the
person. Insecurity is communicated through the position of the arms and
legs. If in a meeting you discover that your limbs are wrapped around you,
try to analyse why you are nervous.
Х As you speak, keep in mind that the pitch, tone, loudness and rate of
your voice communicate as much and sometimes more than your words, Rapid
speech, for example, may signal excitement or nervousness while hesitant
speech may indicate insecurity or doubt.
Х The way you dress delivers an unmistakable message to those around you.
If you choose to wear jeans to a sales call on a conservative client, your
chances of making the Bale are small.
Don't fall into the trap of believing that an understanding of non-verbal
communication will enable you to read every potertial buyer like a book.
Our speechless messages are extremely compile, varying with the situation
and culture we find ourselves in and with particular personalities and
habits. However, a working knowledge of the nuances of body language wiil
still provide you with an invaluable business tool.
It's Monday morning and Jim Anderson, a financial manager, is already
behind schedule. With three phone calls waiting for him, a budget meeting
at 10,a lunch date with a supplier, and an analysis of last quarter's due
at 2. Jim is frantic. He doesn't know what to do first and worse yet, he
knows that he'll never meet all his deadlines.
Jim is suffering from a common problem plaguing manager-an inability to
control and effectively manage time. This problem which affects college
students as well, can be minimised by following simple suggestions;
Х Establish your goals and set priorities. Make a list of your long-and
short-term projects. Look at the list regularly and revise at as needed.
Arrange the list into specific tasks. Then on start at the top of the list
and get to work.(Don't upset it your priorities change by the hour. Just
revise your list and get on with the work. Schedule your daily activities
on an hour-by hour appointment calendar.
Х Learn to delicate work. Then follow this procedure to make sure you get
the result you want. Give clear instructions on what you want done, make
sure your instructions are understood, set a deadline, regularly check on
the projects progress, and allow enough time to correct mistakes.
Х Spend your time on those activities that will yield the moat results. The
PARETO PRINCIPLE of time management states that 80%, of your goals can be
achieved in 20% of your time if your work on those tasks that are critical
to the completion of the overall project and avoid those contribute little
to the outcome.
Х Do your most important when you are at your best. Work on high-priority
items when you are mentally alert and on low-priority items when your
energy has ebbed.
Х Group your activities. By reading all your mail and making all your phone
calls at once, you will make the most efficient use of your time.
Х Learn how to held interruptions. Incoming phone calls, unscheduled
visitors, and even the mail can play havoc with your schedule. You can
control these by having your sectectary handle all but essential calls when
you are working on an important task  by working in another office (no one
will be able to find you), by    setting times when they cannot (except for
emergencies), and by learning    how to deal with long-winded callers.
Interrupting yourself also wastes time. Instead of getting yet another
cup   of coffee or walking down the hall to chat with a friend, try to
finish what you're doing, even if the job is difficult or unpleasant.
Х Avoid the paper shuffle. Try to handle every piece of paper on your desk
only once.
Х Avoid long lunches when you are in a time crunch.
Х Finally, give yourself the time you need to get the Job done. Time
management is not the sane thing as time compression. Be realistic about
the amount of working time you need to get an important job done and then
schedule the rest of your day around it. By using these and other time
management techniques, you will begin to fed in control of your schedule.
The inevitable result will be greater productivity.
I.I. The United States has a fascinating business, history. Business has
significantly influenced customs, politics and even family living. The
historical development of the U.S. economy continues to effect the way of
business operates today. Colonial Society. Colonial society was primary
on the products of its farms and plantations. The nations prosperity
depended on the success of its crops, and most people lived in rural areas.
The cities-quite small in comparison to those of Europe- were the
marketplaces and residences craft workers, traders, bankers and government
2. But the real economics and political power of the nation was centered in
rural areas. The population was tied to the land socially as well as well
as economically. The colonies looked to England for manufactured products
and capital with to finance infant industries.
3. Even after the Revolutionary war (1776-1783), the United States
maintained close economic relations with England. Indeed, British investors
provided much to the money needed to finance the developing business
system. This financial influence remained well into 19* century.
II. 4. The Industrial Revolution. The industrial revolution occurred in
England around 1750. The traditional manufactured system of independed
skilled workers individually pursuing their specialities was replaced by a
factory system that mass-produced items by bringing together large numbers
of semiskilled workers.
5. The factory system profited from savings that were created by large-
scale production. For example, row materials could often be purchased
cheaper in large lots. Another savings came from the specialisation of
labour; each worker concentrated on one specific task. Production
efficiency improved substantially and the factory system revolutionised
6. Influenced by the events occurring in England, the United States soon
began its march toward industrialisation. Agriculture became mechanised and
factories sprang up everywhere. But most business historians agree that
real progress did not occur until railroads provided a fast, economical
method of transporting the goods produced by business.
7. The American Industrial Revolution was highlighted by the rapid
construction of railroad systems during the 1840s and 1550s. Not only did
the railroad provided the necessary transportation system, the also created
the need for greater quantities of lumber, still, and real estate.
III. 8. The age of the entrepreneur. During the 19th century business made
sizeable advises in the U.S. Eli Whitney introduced the concept of
interchangeable parts, an idea that would later facilitate mass production.
Peddlers, the sales people of the day, operated throughout the country.
Financiers became less depended upon England, and the banking system better
established after some early problems. Investors created a virtually
endless array of commercially usable products.
9. People were encouraged to take risks and to become entrepreneurs.
Cornelius Vanderbilt, John D. Rockfeller, J.P. Morgan, and Andrew Carnegie
-all became wealthy because of their willingness to take business risks
during this period. Admittedly, some people were hurt by the speculation
that characterised industry during the 1800s but, on balance, the
entrepreneurial spirit of the age did much to advance the business system
and raise the standard of living.
IV. 10. PRODUCTION ERA. The early part of the 20th century - the
production. era - was a period when business managers concentrated almost
solely on the firm's production tasks. Industry was under considerable
pressure to produce more and more to satisfy growing consumer demand and to
correct product shortages.
Work assignments became increasingly specialised. Assembly lines, such as
the one introduced by Henry Ford, became common. Owners turned over
management responsibilities to a new class of managers, who specialised in
operating established businesses rather than in starting new ones.
Marketing tended to be viewed strictly as selling. Business did not yet
accept disiplines like consumer research. In other words, marketers were
those individuals responsible for distribution after the production
function had been performed. Business was internally oriented rather that
consumer oriented.
V.ll. THE MARKETING CONCEPT. The post-World War II era was influenced by an
important new concept in management. The marketing concept, which became
the prevalent business philosophy, advocated  that all activities and
functions of the organisation be directed toward the identification and
satisfaction of consumer wants. A consumer orientation became the principal
goal of companies.
12.   Business organisations throughout United States formed marketing
research departments to analyze what the consumer would buy before the
company produced the item. This concept stood in marked contrast to the
earlier philosophy of producing a product then trying to sell it to the
consumer. Advertising reached over larger numbers of consumers and
increased the efficiency of firm's promotional affords. Today, firms must
have a strong consumer orientation if they are to remain competitive in the
VI. 13. THE CURRENT BUSINESS ERA. Challenge after Challenge has confronted
business in recent years. Well-known firms like Whickers and Continental
Airlines have filed for bankruptcy. Concern over high numbers of industrial
accidents and illnesses has resulted in the passage of federal legislation
regarding occupational safety and health. Financial scandals have touched
off public demand. Millions of people have been shocked by the ecological
reports of environmentalists. Higher fuel costs have made energy-saving
programs priority items at managerial meetings.
14. These challenges have produced several noticeable trembles in the
business world. Business has become more socially responsible; the social
impact of a business decisions making. Business has become more conscious
of its operating costs, particularly energy costs. More minorities and
women porsue business carriers today. Management continues to struggle with
the problem of predicting and then reacting to new government regulations
and requirements. Business has found new markets abroad - Some in Communist
nations - but has encountered increasing competition from foreign producers
at home writers may some day describe the current business era as one of
the most challenging for the private enterprise system.

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