Business Organization For l5-1

Learning Unit ONE
IDENTIFY ACTIVITIES TO BE ACCOMPLISHED FOR REAL BUSINESS

OPERATIONS
1.1 VERIFY BUSINESS START UP REQUIREMENTS
1.2 1. Meaning of business requirements
Business requirements are needs of the business. They’re things that must be
in place for the business to run.
For the business to operate, it has to acquire different categories of
requirements, for example productive machinery or fixed assets, production
consumables such as raw materials, labor, merchandise etc.
Business requirements can be either fixed assets or current assets.
Fixed assets: These are productive assets or items which are repeatedly used
in business operations for many production periods usually over a year. Fixed
assets are not consumed in the process of production and do not become part
of the finished product as its components.
Examples of fixed assets: machinery, furniture such as office chairs, desks,
tables and others, tools and equipment, land, buildings etc.
Current assets: These are items which are used in the course of production,
that is, they become part of the output or change form in the course of
business operations.
Examples of current assets: Raw materials, cash, Supplies (Stock of goods for
sale or for consumption), money owed by other people (Accounts receivable).
It is important to note that business requirements vary from one business to
another. For example, trading businesses do not need raw materials as
requirements.
Business requirements in general may include the following:
1. Raw materials: These are goods which are to be processed by the
business in order to produce finished products for sale to the consumers.
Examples: Wheat flour, baking powder, cooking oil, margarine are raw
materials for bread production in a bakery.
2. Machinery, tools and equipment:
Machinery incudes all the machines that are used in the transformation
of raw materials into finished goods or in delivering a service.
Tools are those other items used as simple machines to make a task
easier. Examples include knives, hammers, spanners, sauce pans, office
computers...
Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Equipment stands for a set of tools assembled to perform a certain job.
3. Utilities and consumables: These are other inputs that go into the
production process for goods and services.
Examples: Electricity, charcoal or gas, water, stationery, etc.
Utilities are used and get finished in the course of production but cannot
be part of the finished product as ingredients.
4. Goods for sale: These are goods that an entrepreneur buys for re-selling
in course of his/her business operations. They are not bought for
transformation but for the purpose of re-selling.
Goods in the shop waiting to be sold are referred to as Stock.
In business, Stock may be raw materials, finished goods waiting to be
sold or merchandise.
Estimating requirements for a business
Estimating goods and services required for starting and operating a business
entails doing the following:
Step One:
Identify the requirements of the business that have to be met in the day-to-day
operations of the business.
Identify the requirements that are not routine. E.g. fixed assets.
Step two:
Determine the period/cycle the business requires to have the raw materials
transformed into finished products (or to get the purchased goods sold) and
cash got from the sale of finished goods. [Bizatwara igihe kingana iki kugirango
ibyo nkoresha bibe bitanze umusaruro ugurishwa kandi ugurishwemo
amafaranga?].
It’s important to note that the period/cycle that raw materials take to get
transformed into finished products for sale or revenues collected to be re-
invested in the business varies form one business to another.
For example, in poultry that rears layers (for eggs) the cycle is about six
months while that of rearing broilers (for meat) is about three months. For the
case of a grocery shop, since it majorly involves purchasing groceries and
selling them, money may be collected within that same month even on the
same day.
Step three:
Determine the quantity or units of each requirement needed to cover the period
or cycle mentioned in step two. [Niba cycle ari umunsi umwe, ubwo mu kwezi

hazabamo cycles zingahe? Niba kuri cycle nkeneye ibiro 20 by’ibikoreshwa
ubwo ku kwezi nzakenera ibikoreshwa bungana iki?]
Step four:
Estimate how much each unit of the requirements will cost (For the starting
period).
Step five:
Calculate the total cost of all the items or requirements needed for the period
stated in step two.
The things to estimate as basic requirements of a start-up business, are
 The business location

 Raw materials/stock of goods for initial storage and
 Start-up finances
Business location
Business location refers to the setting up or establishment of a particular
business in a particular area. It is the place where a firm decides to site its
operations.
Business premises on the other hand comprises of buildings, workshops or
warehouses from which the business is operating.
Factors considered when choosing the business site and premises
1. Market: The business should be located at an area where it has
customers. Being near customers reduces costs of transporting products
to the market especially when the products are bulky and costly to
transport, perishable and costly to preserve, and it can help when the
competitors are near the customers.
2. Source of raw materials: A business should be located at a place where
it can easily find raw materials. This is important especially when the
raw materials used are bulky and perishable to reduce the costs of
transportation and the risk of perishable raw materials getting spoilt
before use.
3. Accessibility to transport and communication network: A good
business location should have a good transport network (enough roads
for example) and a good, effective communication services such as
telephone networks, post services, internet…
4. Availability of business support services: Business Support services
are services provided by service businesses that help other businesses to

run smoothly. For example, banking services, insurance services,
brokers’ services, marketing services…
5. Availability of human resources: Presence of required categories of
manpower.
6. Availability of land and premises to be purchased or rented.
7. Costs associated with rent, purchasing or leasing the business
premises/land.
8. Security
9. Government policy on location of the business.
10. Availability of power
11. Availability of water.
Working place lay out

Working place lay out or Plant lay out means the arrangement of physical
facilities such as machinery, equipment, furniture etc. within the factory
building in such a manner so as to have quickest flow of material at the
lowest cost and with the least amount of handling in processing the product
from the receipt of material to the shipment of the finished product.
(Ease of movement, economic use of space and cost efficiency)
Importance of plant lay out
a) To achieve proper and efficient utilization of available floor space
b) To ensure that work proceeds from one point to another without any
delay.
c) To reduce material handling costs hence reducing production
costs(Disorder might make it difficult to handle materials)
d) Easy movement reduces time wastage by workers and leads to labor
efficiency
e) To increase employee morale through convenience, safety and comfort
at work.
f) To prevent employee accidents and hazards to personnel in production.
g) To allow easy maintenance of machine and equipment in the production
process.
h) To improve productivity by increased speed and efficiency of production.
Types of layout
The type of plant lay out differs from business to business. Plant lay outs for
manufacturing businesses differ from those of service and trading
businesses.
There are three main types of plant lay outs:

1. Product or line lay out
2. Process or functional lay out
3. Fixed position or location lay out
4. Combined or group lay out
Product or line layout

Product lay out is that in which machines and equipment are arranged in
one line depending upon the sequence of operations required for the
product.
They are arranged in such a way that materials once introduced, get out of
that line of machines and equipment totally transformed into the desired
finished product. Everything required for a given product to be completed
is put at the same place, in the same line.
The materials move from one work station to another sequentially without
backtracking or deviation. Therefore materials are fed into the first machine
and finished goods travel automatically from machine to machine, the
output of one machine becoming input of the next.
This type of layout is preferred for continuous production, i.e.,

involving a continuous flow of in-process material towards the
finished product stage.
PRODUCT LAYOUT SAMPLE
Production of sandals apart
Cutting leather into strips-Assembling leather strips-Fixing soles- finishing works.
Production of shoes apart
Cutting and modelling leather-Assembling leather pieces-Fixing soles- Finishing works.
Process or functional layout

In this type of lay out, machines of a similar type are arranged together at
one place or under one department and hence there are various
departments arranged in order of sequence of operations.

That is to say, machines performing the same task are located in one area
or department and products undergo one process before being transferred
to another process.
This type of layout is generally employed for industries engaged in

job order production and non-repetitive kind of maintenance or
manufacturing activities.
Example: In a tailoring workshop, personnel in charge of cutting and

modelling cloth pieces may be located at one place, sewing machines at
another particular place, over sewing machines at another place, and the
finishing process at a different place.
Each process gives a particular form of products, finished or in progress
which are then passed to the next process.
Fixed position or location layout
This is a type of plant lay out where the major product being produced is
fixed at one location and therefore equipment, labor and components are
moved to that location. All facilities are brought and arranged around one
work center. This type of layout is not relevant for small scale
entrepreneurs.
The product to be produced or worked on remains at one place and then
different men and equipment are moved successively to the material until
the product is completed. Different equipment are brought at the place
where the product is being constructed. Example: Construction industry.

Combination Layout:
A combination of process and product layouts combines the
advantages of the both types of layouts. Moreover, these days pure
product or process layouts are rare. Most of the manufacturing
sections are arranged in process layout with manufacturing lines
occurring here and there (scattered) wherever the conditions
permit. A combination layout is possible where an item is being
made in different types and sizes
FACTORS INFLUENCING LAYOUT
Factory buildings
Office Equipment
Office equipment means a set of any Assets used for operating office functions
of a company. Office equipment includes desks, chairs, computers, and
light fixtures.
Essential Office Equipment for Starting a Business
Starting up a business or office will require both office furniture and office
equipment. Purchasing office equipment, such as computers, software,
printers, fax machines, and network equipment will most likely be your second
largest startup expense.
Examples of office equipment:
Business Telephone System
Computers and Softwares

Computer Network and Internet Connection
Multifunction Printer
Smartphone
Shredder
Mailing Equipment
OFFICE FURNITURE
Office furniture is needed to conduct office work efficiently and comfortably.

Every office needs furniture as a basic facility. Most office work is desk work
performed indoors.
Office furniture is needed for sitting, working and storing purposes. It consists
of:
- Chairs, sofas, couches for sitting

- Table, desks, trays for working
- Shelves, racks, cabinets, cupboards, lockers for storing
Furniture can be made of wood, metal, plastic, and fiberglass. Attractive

furniture provides impressive look to an office.
RAW MATERIALS FOR INITIAL STORAGE

Raw materials are the constituent parts input into a production process,
where they are transformed into finished goods.
It is important to think about how much raw materials will be employed in a
cycle, how many circles will be in the first operating period (week, month or
term) and therefore calculate how much raw materials will be needed in store
for the starting period.
Production equipment and machinery
"Production machinery or equipment" means machinery or equipment used in

a production activity.
Equipment means: Tangible property (other than land or buildings) that is
used in the operations of a business. Examples of equipment include devices,
machines, tools, and vehicles.

Production consumables
Consumables are those supplies consumed in the general production process,
such as machine oil. These items vary with production volume, but cannot be
traced back to specific units of production. Other examples include fuel, water
for washing, maintenance fluids…
Start-up finances
Startup finances refers to the money that is required to start a new business.
This includes money needed for office space, permits, licenses, inventory,
product development and manufacturing, marketing or any other
expense. Startup capital is also referred to as "seed money."
In estimating start-up finances, three categories have to be considered that is
Investment capital, Working Capital and Pre-operating expenses.
Try to find out how much time it will take for your new business to start
generating income and estimate how much money will be needed during that
period in terms of expenses.
Investment Capital
Investment capital means the amount of money necessary to purchase the
equipment you'll use to establish and continue operations. This means that we
need to find out what fixed assets will be needed both for office and production
and how much money each item will cost. This means for example machinery,
tools, furniture, motor vehicles…
Working Capital for the starting period
Working capital means the capital of a business which is used in its day-to-day
trading operations, calculated as the current assets minus the current
liabilities. Working capital would include the following:
 Cost of goods
 Operating expenses: Overhead expenses and Personnel expenses
Cost of Goods
For a retail or wholesale business, cost of goods sold--or cost of sales--refers to
the purchase of products for resale, i.e. the inventory
For a manufacturing firm, cost of goods is the cost incurred by the company to
manufacture its product. This usually consists of three elements:

1. Material
2. Labor
3. Overhead
Estimate how much will be needed for production or purchasing goods for
resale during the first period of operations.
Operating expenses
Operating expenses are sums incurred by a business in normal business
operations excluding purchasing and production costs. Operating expenses
include personnel expenses and overhead expenses.
Overhead expenses are the expenses associated with the operation of the
business. They are non-labor expenses associated with the operation of the
business. They include:
 Travel
 Maintenance and repair
 Equipment leases
 Rent
 Advertising & promotion
 Supplies
 Utilities
 Packaging & shipping
 Payroll taxes and benefits
 Uncollectible receivables
 Professional services
 Insurance
 Loan payments
 Depreciation
Personnel expenses are those associated with payment of workers’ wages and
salaries, motivation of employees and other labor related costs.
Pre-Operating Expenses
Pre-operating expenses also known as preliminary expenses are expenses
which are incurred before the formation of the business. Examples of pre-

operating expenses include fees paid to professionals, registration fees,
installation fees…
Sources of finances
After calculating how much money your business would cost to get off the
ground, you need to think and find out where that money will come from. The
possible sources of business finance are:
1. Personal investment
When starting a business, your first investor should be yourself—either with
your own cash or with collateral on your assets. This proves to investors and
bankers that you have a long-term commitment to your project and that you
are ready to take risks.
2. Love money
This is money loaned by a spouse, parents, family or friends. Investors and
bankers considers this as "patient capital", which is money that will be repaid
later as your business profits increase.
When borrowing love money, you should be aware that:
 Family and friends rarely have much capital
 They may want to have equity in your business
 A business relationship with family or friends should never be taken
lightly
3. Venture capital
This means accepting other people’s investments in your business for example
through selling shares to them.
Some of its disadvantages are that:
 It involves giving up some ownership or equity in your business to an

external party.
 It involves sharing profits with capitalists who expect a healthy return on
their investment. Be sure to look for investors who bring relevant
experience and knowledge to your business.
4. Business incubators
Business incubators (or "accelerators") generally focus on the high-tech sector
by providing support for new businesses in various stages of
development.However, there are also local economic development incubators,

which are focused on areas such as job creation, revitalization and hosting and
sharing services.
5. Government grants and subsidies …

6. Bank loans
1.2 RECRUIT EMPLOYEES IN LINE WITH TASK REQUIREMENST

Employee Recruitment refers to the overall process of attracting, shortlisting,
selecting and appointing suitable candidates for jobs (either permanent or
temporary) within an organization.
Functions of employee recruitment
Functions of employee recruitment stand for tasks involved in the recruitment
of employees.
The functions involved in employee recruitment are therefore:
 Job design and development

 Identifying and seeking candidates
 Receiving and tracking candidates
 Reference and background checks
 Testing
 Interview
 Evaluation and hiring
1. Job design and development

Job design is related to the specification of contents, methods and
relationship of jobs in order to satisfy technological and organizational
requirements as well as the social and personal requirements of the job
holder or the employee.
Human resource requirements of the business mean the determination of the
staff, their skills and other specific requirements that a business requires for
its operations.
Human resource requirements and processes are based on the following:
 The organization design

 Job analysis
 Job description
 Job specifications
 Job grading
 Job performance standards.

The organization design
The organization design is a set of different specific units of responsibility that
make an organization and relationships between them. The organization design
is represented using an organization chart.
An organization chart is an illustrative aid that shows different departments
of functional units and, job functions and the personnel within those units.
Example:
Board of Directors
Managing Director/General manager
Marketing Manager Production Manager Personnel Manager
Support Staff Support Staff Support Staff
Job analysis
Job analysis means a systematic collection and recording of information
concerning the purpose of a job, its major duties, the contact/relationships
with others that the performance requires, knowledge, skills and abilities
needed to perform the job efficiently and effectively.
For example, the job of a secretary would contain:
 Knowledge of a secretarial duties

 Typewriting( typing with a computer)
 Short-hand office management
 Knowledge of official language.

Job description
Job description is a broad statement of the purpose, scope, duties and
responsibilities of a particular job.
Job analysis stops by identifying them/collecting them and then Job
description means stating or putting them in in a statement.
Job specification is a written record or a summary which specifies what a
worker is supposed to do on a specific job i.e the major duties and
responsibilities of a worker.
A typical job description should contain:
 Job identification = Tittle of the job, department or division under which
it falls and the work station.
 Job summary: Brief content of the job
 Job duties and responsibilities
 Relation to other jobs( Determining that job is under who and who is
under it)
 Supervision: Reporting point or immediate supervisor.
 Use of machines and toots: Specifies what machines are supposed to be
used by the worker that he/she should be able to operate.
 Working conditions and terms of employment
e.g coldness, heat, under pressure, working on a permanent basis, part
time, remuneration scale…
Job specification
Job specification means a detailed statement of physical and mental abilities
involved in doing the job.
It is usually stated in terms of behavior, i.e what the worker is expected to
show as behavior, what knowledge, skills and experience he/she should
possess.
This can be defined as well as a detailed statement of the minimum acceptable
human qualities (physical and mental) required for the successful performance
of the named job.
Job grading
Job grading means division of jobs into groups or grades majorly to allocate to
each grade a particular basic pay rate or range. The job is then localized in one
of the grades.

Job performance standards
This involves setting the acceptable competency aspects required for the job.
It’s the expected output for a given job and hence one who doesn’t meet this
expectation is termed as a failure.
1.2.2.2 Identifying and seeking candidates
Identifying and seeking candidates is done through job advertisement which
involves informing the public about the jobs available through the various
advertisement media like newspapers, radio, television etc.
The advertisement gives the various details about the job to be filled in
particular the job description and job specification, for example education,
working experience and age of the candidates.
1.2.2.3 Receiving and tracking applicants
This involves preliminary analysis of the received applications to select the best
fits to the job and notifying the applicants whenever there is an update.
1.2.2.4 Reference and background checks
This involves contacting the job applicant’s previous employers, schools,
colleges and other sources to learn more about his or her employment history,
education background and qualification for the job.
1.2.2.5 Testing
This stands for administering exams to pre-selected candidates.
1.2.2.6 Interview
An interview is a somewhat formal discussion between a hirer and an applicant
or candidate, typically in person, in which information is exchanged, with the
intention of establishing the applicant's suitability for a position.
1.2.2.7 Evaluation and hiring
After testing and interview processes, evaluation comes as the making of a
judgement about the results obtained by different candidates and comparing
them in order to select the best.
Principles of strategic employee recruitment
Strategic recruitment means a well thought out plan that properly fulfills long-
term or overall (bihatse ibindi) needs and desires of your company.

The following are important principles that a good strategic employee
recruitment should base on:
1. Definite strategy (A well-defined strategy)
A strategy is a plan of action designed to achieve a long-term overall aim.(i.e a
set of different things that will be done in a given time span for achieving a
given long-term aim.
The recruitment is good and beneficial to the recruiting company when that
company the recruitment strategy is clearly defined and the message is made
prominent enough to reach the audience. This means you should define your
strategy and ensure to communicate it as much as possible to make it known
to the audience.
2. Continuous approach (Pipeline approach)
When hiring is planned, it would be good if the process is made continuous by
developing a stream of candidates for approaching.
Continuous recruitment approach means that you create a situation where
people always keep submitting job applications and you continuously receive
applications even when there is no vacancy. This enables you to have available
talent in the pipeline that will be there when the vacancy arises and you will be
able to select the best in the opportune time.
3. Comparing and competition (Competitive)
For a better and useful recruitment practice, you should compare your
strategies and principles to those of your competitors and try to be better than
they are.
4. Employment branding
Create a good brand of your organization to be attractive to applicants. If your
company is known to offer better employment conditions plus better and fair
recruitment processes, this is likely to attract better talents. (i.e what people
know of you in terms of recruitment is so good that it attracts better
applicants).
5. Universal (Global)
When recruiting. You should target applicants from a wide range of distance as
long as nearby applicants as talents can be even abroad, willing to work for
your organization.
6. Aiming at employed on-lookers (Target employed on-lookers)

Your hiring process should be the one that attracts even talented and top
employees employed in other top organizations. You should be doing enough to
convince those top talented applicants to forego their current employers for
coming and working for you.
7. Speedy hiring (Speed)
The hiring decision should be made quickly or as fast as the demand for skilled
candidates arises. This avoids losing good candidates to other candidate-
seeking competitors.
8. Usage of effective sources (Sourcing is critical)
Employees should be sourced from reliable sources. For example, Employee
Referral can be good for best hires. Employee Referral approach means that
you request your current employees to refer their friends whom they know are
good performers. This is better than professional events, off campus and
contests.
9. Data based decisions
Recruitment decisions should be based on objective data about the applicants.
The best candidates should be selected based on facts and data not emotions
or even common practices. For example, avoid nepotism.
This helps the recruitment process to produce more consistent, reliable and
high quality results.
10. Build a recruiting culture
To find the right talent, you should cultivate within your workers the culture of
being like scouts and recruiters for your company. This means that you should
make them accustomed to appreciating and recommending new talent.
Factors influencing employee recruitment
Every employer wants the best employees in his/her company. This however
does not mean that there are no other factors that should be looked at when
recruiting employees.
Employee recruitment is based on both internal and external factors to the
organization.
a) Internal factors
1. Budget constraints: We can only hire employees within our budget
constraint limits. That is to say that the amount of resources we have are
considered so that we recruit the employees that we are able to handle

both in terms of remuneration and offering the necessities to the
employees.
2. Expected or trend of employee separation: This means the expected
service period after which an employee will quit the organization. A short
trend of employee separation would mean that recruitment is urgent.
3. Production levels: The level of production required dictates the number
and the frequency of employee recruitment
4. Sales increase or decreases: Decreases in sales would mean that
production workers are less needed while sales persons would be an
urgency.
5. Global expansion plan: A company willing to expand its operations
would find itself in an urgent demand for workers I.e in need of more
workers.
b) External factors
i. Changes in technology: The changes in global technology in the
market may require a shift from one type of labor to another such that
some workers may be laid off while others are hired.
ii. Changes in law: When the law of the area where you carry out your
business change, this may require that your company changes its
workers. For example, by the time the workforce was said to be the
people between 18 and 65, the under 18 were not employable but now
job seekers at the age of 16 can be hired.
iii. Unemployment rates: Periods of high unemployment rates mean
that job seekers are many and so are hired for little remuneration
rates. This may be a chance for employers to employ many workers
since their payment is affordable.
iv. Shifts in population: A shift of the population from a young
population to an ageing population reduces the workforce and
therefore makes workers unaffordable because they are scarce.
v. Shifts in urban, suburban and rural areas: Mass movement of the
population from rural areas to urban areas for example causes a
surplus of labor force in towns which means a cheap labor force and
ability of employers to hire many workers.
vi. Competition: The choice of workers may be based on the personnel
that your competitors have if you are to be better than they are.
Recruitment process
Recruitment process is a process of identifying the jobs vacancy, analyzing the
job requirements, reviewing applications, screening, shortlisting and selecting
the right candidate.

Staffing plans and forecasting
Recruitment planning or staffing planning is the first step of the recruitment
process, where the vacant positions are analyzed and described.
Steps involved in a Recruitment plan
Step 1o Identifying the vacancy

At this step, requisitions for recruitment are received from different
departments of the organization by the HR department.
The requisition contains:
 The number of posts to be filled

 Number of positions
 Duties and responsibilities to be performed
 Qualification and experience required
Then the manager of the sourcing department ascertains whether the
position is required or not, permanent or temporary, full time or part time…
Job analysis
Job analysis is a process of identifying, analyzing, and determining the duties,
responsibilities, skills, abilities, and work environment of a specific job.
The following steps are important in analyzing a job −
 Recording and collecting job information

 Accuracy in checking the job information
 Generating job description based on the information
 Determining the skills, knowledge and skills, which are required for the
job
 The immediate products of job analysis are job descriptions and job
specifications.
Job Description
Job description is a broad statement of the purpose, scope, duties and
responsibilities of a particular job.
Job analysis stops by identifying them/collecting them and then Job
description means stating or putting them in in a statement.

A job description provides information on the following elements −
 Job Title / Job Identification / Organization Position
 Job Location
 Summary of Job
 Job Duties
 Machines, Materials and Equipment
 Process of Supervision
 Working Conditions
 Health Hazards
Job specification
Job specification focuses on the specifications of the candidate, whom the HR team is
going to hire. Job specification means a detailed statement of physical and
mental abilities involved in doing the job.
It is usually stated in terms of behavior, i.e what the worker is expected to
show as behavior, what knowledge, skills and experience he/she should
possess.
A job specification document provides information on the following elements −
 Qualification
 Experiences
 Training and development
 Skills requirements
 Work responsibilities
 Emotional characteristics
 Planning of career
Job evaluation
Job evaluation is a comparative process of analyzing, assessing, and
determining the relative value/worth of a job in relation to the other jobs in an
organization. The main objective of job evaluation is to analyze and determine
which job commands how much pay.

Step 2o Recruitment Strategy
Recruitment strategy is the second step of the recruitment process, where a
strategy is prepared for hiring the resources.
Step 3o Searching the Right Candidates

Searching is the process of recruitment where the resources are sourced
depending upon the requirement of the job. After the recruitment strategy is
done, the searching of candidates will be initialized. This process consists of two
steps −
 Source activation − Once the line manager verifies and permits the
existence of the vacancy, the search for candidates starts.
 Selling − Here, the organization selects the media through which the
communication of vacancies reaches the prospective candidates.
Searching involves attracting the job seekers to the vacancies. The sources
are broadly divided into two categories: Internal Sources and External
Sources.
Internal Sources
Internal sources of recruitment refer to hiring employees within the organization

through −
 Promotions
 Transfers
 Former Employees
 Internal Advertisements (Job Posting)
 Employee Referrals
 Previous Applicants
External Sources
External sources of recruitment refer to hiring employees outside the
organization through −
 Direct Recruitment
 Employment Exchanges

 Employment Agencies
 Advertisements
 Professional Associations
 Campus Recruitment
 Word of Mouth
Step 4o Screening / Shortlisting
Screening starts after completion of the process of sourcing the candidates.
Screening is the process of filtering the applications of the candidates for further
selection process. Screening is an integral part of recruitment process that helps
in removing unqualified or irrelevant candidates, which were received through
sourcing. The screening process of recruitment consists of three steps.
The screening process of recruitment consists of three steps:
 Reviewing of Resumes and Cover Letters
In this process, the resumes of the candidates are reviewed and checked for the
candidates’ education, work experience, and overall background matching the
requirement of the job.
While reviewing the resumes, an HR executive must keep the following points
in mind, to ensure better screening of the potential candidates −
 Reason for change of job

 Longevity with each organization
 Long gaps in employment
 Job-hopping
 Lack of career progression
 Conducting Telephonic or Video Interview

 Identifying the top candidates.
Step 5o Evaluation and Control

Evaluation and control is the last stage in the process of recruitment. In this
process, the effectiveness and the validity of the process and methods are
assessed.

The costs incurred in the recruitment process are to be evaluated and controlled
effectively. These include the following −
 Salaries to the Recruiters
 Advertisements cost and other costs incurred in recruitment methods, i.e.,

agency fees.
 Administrative expenses and Recruitment overheads
 Overtime and Outstanding costs, while the vacancies remain unfilled
 Cost incurred in recruiting suitable candidates for the final selection

process
 Time spent by the Management and the Professionals in preparing job

description, job specifications, and conducting interviews.
1.3 Perform purchasing of business requirements in line with

business plan
Meaning of purchasing
Purchasing means obtaining raw materials, merchandise or services of the right

quality in the right quantities from the right sources, delivered to the right place
at the right time. Purchasing is done in accordance with the requirements of a
business either for production and operational process or trading purposes (in
case of a trading business).
The purpose of purchasing
The purpose of purchasing is to avail the required materials, spare parts,

services, semi-finished goods and supplies for resale required by the
organisation to produce or sell the desired product at the right time, in the
desired quantities, quality and at affordable prices.
Types of purchasing
Centralized purchasing
Centralized purchasing refers to the purchase of materials by a single purchase

department. This department is headed and managed by a purchasing manager.
Under centralized purchasing, all purchases made by the purchase department
to avoid duplication, overlapping and the non-uniform procurement. A company

has to follow the centralized purchasing of materials for ensuring proper
materials control as well as efficient store keeping. Under this system, the
purchasing department purchases the required materials for all the
departments and branches of the company.
Advantages Of Centralized Purchasing
- Bulk quantity of materials can be purchased at a low price with favorable

purchasing terms.
- The service of an efficient, specialized and experienced purchase executive can
be obtained.
- Better layout of stores is possible in centralized stores.
- Economy in recording and systematic accounting of materials.
- Transportation costs can be reduced because bulk quantity of materials
purchased.
- Centralized purchasing avoids reckless purchases.
- Centralized purchasing discourages duplication of efforts.
- Centralized purchasing helps to maintain uniformity in purchasing policies.
- Centralized purchasing helps to minimize the investment on inventory.
Disadvantages of Centralized Purchasing
- High initial investment has to be made in purchasing.

- Delay in receiving materials from the centralized store by other departments.
- Centralized purchasing is not suitable, if branches are located at different
geographical locations.
- In case of an emergency, materials cannot be purchased from local suppliers.
- Defective materials cannot be replaced timely.
Decentralized purchasing
Decentralized purchasing refers to purchasing materials by all departments and

branches independently to fulfill their needs. Such a purchasing occurs when
departments and branches purchase separately and individually. Under
decentralized purchasing, there is no one purchasing manager who has the right
to purchase materials for all departments and divisions. The defects of
centralized purchasing can be overcome by decentralized purchasing system.
Decentralized purchasing helps to purchase the materials immediately in case
of an urgent situation.
Advantages Of Decentralized Purchasing
- Materials can be purchased by each department locally as and when required.

- Materials are purchased in right quantity of right quality for each department
easily.
- No heavy investment is required initially.
- Purchase orders can be placed quickly.
- The replacement of defective materials takes little time.
Disadvantages Of Decentralized Purchasing
- Organization losses the benefit of a bulk purchase.

- Specialized knowledge may be lacking in purchasing staff.
- There is a chance of over and under-purchasing of materials.
- Fewer chances of effective control of materials.
- Lack of proper co-operation and co-ordination among various departments.
Principles of purchasing
These are fundamental truths or propositions that serves as the foundation for
a purchasing system (i.e. that are based on when purchasing).
The person in charge of procuring the required supplies to an organization
should therefore ensure the following:
 The right price
 The right quality
 The right quantity
 The right time: Bought exactly in time to ensure it is available every time
needed.
 The right place: Bought from the right supplier
Purchasing procedures
Meaning of purchasing procedures

Purchasing procedure means a series of actions conducted in the purchasing of required
materials and supplies.
Steps involved in purchasing procedures

The purchasing procedure involves the following steps:
1. Determining the needs of a business in respect to their quantities and
qualities.
2. Checking on where they can be sourced from and ordering for them.
3. Receiving and checking the delivered goods.
4. Storing the delivered goods.
5. Paying for them.
A. Determining the needs of a business in respect to their quantities and
qualities (See 1.1 Business requirements)

B. Checking on where they can be sourced from and ordering for them.
After determining the business requirements and confirming that the
business has the necessary funds or can get the required money, then the
entrepreneur should decide where to purchase them from (Choice of
suppliers).
Factors considered when choosing suppliers
1. The terms and conditions of payment
2. Lead time and distance between the supplier and the purchasing
entrepreneur. Lead time means the time required for purchases to reach
the purchasing organization starting from when an order is placed.
3. The consistency and reliability of the supplier.
4. The quality of goods and services supplied.
5. Tax and regulatory procedures in the purchase and delivery of the goods
and services.
6. Supplier’s capacity in relation to the quantity of requirements needed.
7. The prices charged by the different suppliers for the requirements.
Ordering for goods and services

Ordering for goods and services can either be done verbally or through writing.
Ordering of goods through writing involves drafting documents at each stage in
the ordering process.
Steps of the ordering process:
1. Making inquiries: Asking chosen suppliers if they have the goods or
services that you need.
2. Reply to the letter of inquiry by the chosen supplier by sending
Quotation.
3. Placing a purchase order by the purchasing business.
4. Goods delivery: Goods are sent by the chosen supplier
5. Invoicing: The supplier issues an invoice to communicate to the buyer
how much money he/she owes and the terms and conditions of payment.
C. Storing the delivered goods. (Inventory management)

D. Paying for the delivered goods (Either cash or on credit, in kind or
by cheque)

Documents used in purchasing procedures (p158)
1. Material requisition form
Definition: A materials requisition form is a source document that the
production department uses to request materials for manufacturing process.
The production manager usually fills out the materials requisition form and
delivers it to the materials or storage department where all of the raw
materials are stored. Once the materials manager signs off on the request, the
raw materials are moved from storage and placed on the production floor or if
they are not available in the store, then this form can be used as the basis for
the reordering of any inventory items that are not currently in stock .
Example
REQUISITION FORM
Department Name …………………………… User Reference No ………………………

User ………………………………………….. Requisition Number ……………………..
User Phone ……………………………………
Account name ………………………………... Route ……………………………………
Account Number …………………………….. P.O Box ………………………………..
My Department needs the following services, Equipment, tools or materials
Item No Description Quantity Unit(using Unit Price Total price

Unit)

2. Letter of inquiry
At the very beginning of the ordering process, the purchasing organization
sends a letter of inquiry to the chosen supplier in order to know if the supplies
are available, terms and conditions of a sale and prices of the goods.
Example of a letter of inquiry:
KAGARAMA SECONDARY SCHOOL

P.o Box ……………..
Tel. ………………….
Date ………………..
The sales Manager
Edition Bakame
P.o Box
Kigali
Dear Sir,
Please quote us your price, terms of payment and terms of delivery for the following
items:
Quantity Description
50 copies Basic Economics by Dr. Dumba

30 Copies Essentials of Commerce by S.A Butt
60 Reams Duplicating paper
40 files Box files
We hope to make substantial orders and would like delivery before the
commencement of the next academic term.
Your quick response will be greatly appreciated.
Yours faithfully
Purchasing officer

3. Reply to the letter of inquiry/ Quotation
Once a potential supplier receives an inquiry, he/she will respond by giving
his/her quotations in which he/she will state his/ her prices, specifications of
the products to be supplied, lead time, warranties, payment terms and
conditions, etc.
The quotation is a document prepared and sent by the potential supplier to
the buyer stating the information about the things inquired about in the
inquiry sent by the buyer. It may also be accompanied by catalogues, price
lists, product samples, etc.
A price list is a list of items sold by the supplier with their respective prices.
A catalogue is a booklet which briefly describes each item offered for sale,
often carries illustrations of the items and is therefore more informative than a
price list.
Example of a Quotation:
Edition Bakame bookshop
Po. Box
Tel.
To: Kagarama Secondary School

Po. Box
Tel.
Subject: Quotation No 0012

In reply to your inquiry dated ……………., we have the pleasure to send you
our quotation as shown in the information below:
Quantity Description Unit price Total price
50 copies Basic economics by Dr. Dumba 50,000 2,500,000
Essentials of Commerce by S.A
30 copies Butt 15,000 450,000
60 copies Duplicating paper 5,000 300000
40 files Box Files 4000 160,000
Delivery: One month from date of receipt of your purchase order and 50%
Deposit payment
Payment: 50% with purchase order
50% balance on delivery with full purchase price or credit
not exceeding 30 days from the date of delivery.
Cash Discount: 2%
We look forward to receiving your order
Name of the sales Manager

4. Purchase order
A purchase order is a document issued by an entrepreneur/enterprise to the
supplier whose quotation is the most acceptable, requesting to be supplied
with the goods and services specified/quoted therein as regards quantity,
quality, description, price and place of delivery.
Example
KARANGAZI HIGH SCHOOL

P.O Box …………..
Tel ……………….
Order No:23 .
Date; ………… .
To: The sales Manager

Mulinga Bookshop
P.O Box:
Kigali
Dear Sir,
Please supply us with the following goods:

Quantity Description Unit Price Total
price
50 Copies Basic Economics by Dr. Dumba
30 Copies Essentials of Commerce by S,A Butt
^0 Reams Duplicating paper
40 Files Box Files
Delivery date:
Packing: Separate
Enclosed is our cheque No 020864001 for Rwf 1,705,000 being 50% deposit
payment.
Yours faithfully
Purchasing officer

5. Delivery Note
After the supplier receives the purchase order from the buyer, he/she then
supplies/delivers the goods/items ordered for, or the buyer/entrepreneur may
collect them in his own van or they can be transported using public
transporters.
At this step a goods delivery note should be prepared by the seller and should
accompany the goods supplied.
A delivery note is a document issued by the supplier of goods that goes
together with the goods and includes brief details of the goods as regards the
quantity, name, size, colour, mode of transport used etc.
This serves the buyer to crosscheck the goods delivered and then the
crosschecked note is sent back to the supplier. The supplier should examine
the goods delivery note to ensure that the goods have been accepted on the
terms and conditions agreed and then pass it over the billing section which
issues an invoice to the purchaser.
Example:
Aristock Bookshop
P.O Box …………….
Date ………………… .
DELIVERY NOTE

P.O Box ……………………
Kigali
Please receive the following:
Quantity Description Unit Total
Price price
50 copies Basic Economics by Dr. Dumba
30 copies Essentials of commerce by S.A Butt
60 Reams Duplicating paper
40 Files Box Files
TOTAL 3,410,000
Dispatched/Delivered by …………………………………………….
All received in good condition ……………………………………….
Signed by …………………………………………………………………
For M/S …………………………………………………………………..

6. Invoice
After delivering goods and receiving the delivery note signed by the buyer, the
supplier should inform the entrepreneur/buyer of the amount due by
preparing an invoice, that is, when goods have been bought on credit.
An invoice is a document prepared and sent to the buyer by the supplier
informing him/her of the amount/balance due for the goods supplied to him
on credit. It serves as a notification to the buyer of the amount due and also
evidence of debt due to the seller who also uses it for accounting or
bookkeeping purposes.The supplier should attach a copy of the purchase order
and the goods delivery note to the invoice and send them to the customer for
settlement of the balance due.
Example of an invoice:
Aristock Bookshop
P.O Box ……………
Date ……………………… .
INVOICE No ………………
P.O Box …………………………
Kigali
Tel ………………………
Quantity Description Unit Price Total Price
50 Copies Basic Economics by Dr. Dumba
30 Copies Essentials of Commerce by S.A Butt
60 reams Duplicating paper
40 Files Box files
TOTAL 3,410,000
Delivery: Free
Terms of payment: 50% with purchase order and 50% balance on delivery
with full purchase price or credit not exceeding 30 days from the date of
delivery.
Cash Discount: 2%
Issued by ………………………………………………..
Signed by ………………………………………………..
Tittle ………………………………………………………
Goods received by ……………………………………..
I/We undertake to comply with the invoice terms and conditions and fully
liable for the amount due as stipulated in this invoice.
Signed by …………………………….
Title …………………………………….

7. Credit status inquiry
8. Debit note
A debit note is a document sent by the seller to the buyer in order to correct
an overcharge in the invoice and it informs the buyer that he/she has been
credited by the seller i.e relieved of paying the amount of overcharge in the
invoice.
A credit note may be sent under the following circumstances:
 When any wrong quantities of goods i.e goods of poor quality or wrong
description are sent to the buyer and the buyer returns them to the
seller.
 When there is a damage on the goods delivered to the buyer and the
buyer returns them to the seller.
 When there is an arithmetic error e.g wrong addition on the invoice
causing overcharge.
 When some packaging materials previously included in the price charged
are returned by the buyer to the seller.
 When goods not ordered for are sent to the buyer by the seller and the
buyer returns them.
9. Credit note
A credit note is a document sent by the seller to the buyer in order to correct
an undercharge in the invoice and informs the buyer that he/she has been
debited by the seller i.e charged an additional amount of money that was
undercharged in the invoice.
The debit note is sent to the buyer in the following circumstances:
 When more goods than what the buyer ordered for are delivered.
 When wrong prices, in this case lower prices than agreed prices were
charged or due to wrong additions leading to undercharging of the
customer.
 When some items that were delivered to the buyer are omitted from the
invoice.
NOTE that the debit note performs the same function as the invoice as it also
informs the buyer about the goods supplied to him/her on credit and amount
due, and is therefore a demand note. The debit note is therefore not commonly
used but instead the seller simply sends another invoice to correct the
undercharge in the previous invoice.

10. Receipt
A receipt is a document issued by the seller acknowledging payment by the
buyer for the goods and services supplied to him/her.
Example of a cash receipt:
ROKO CONSTRUCTION LTD

P.O Box ………………………..
Date …………………………… .
CASH RECEIPT No. RKC 0012
Received from ……………………………………………………………………………

Amount in figures (Rwf) ……………………………………………………………….
Amount in words …………………………………………………………………….....
……………………………………………………………………………………………….
Being payment for (Reason) ……………………………………………………………
Signed by ………………………………………………… Balance ……………………
Thank you
11. Statement of Account

A statement of account is a document sent to a customer, showing billings to
and payments from the customer during a specific time period, resulting in an
end balance.
The purpose of the statement is to remind the customer of sales on credit that
have not yet been paid to the supplier.
A sample statement of account usually includes the following information:
1. The beginning total of unpaid invoices
2. The invoice number, invoice date and total amount of each invoice issued
to the customer during the time period.
3. The credit number, credit date and total amount of each miscellaneous
credit issued to the customer during the time period.
4. The payment date and total amount of each payment received by the
supplier during the time period.
5. The net remaining balance of all transactions listed. This is the total
amount payable to the supplier,
6. A payment slip on the bottom of the page that can be torn off and used
as a remittance back to the supplier.

STATEMENT OF ACCOUNT
To: (Customer) ….…………………. From (Supplier)…….…………………

Address ………………………… Address ………………………………..
Town ……………………………. Town ……………………………………
Area Code ……………………… Area code ………………………………
Date ………………………………….. Reference No_____________________
Opening Balance Rwf100,000

Date No. Description Amount Payment Remaining
08.02.16 SI 10072 Sale 250,000 350,000
08.11.16 SI 10093 Sale 400,000 750,000
08.15.16 DC18 Payment 100,000 650,000
08.22.16 CR20020 Credit -50,000 600,000
Subtotal RW600,000
Interest RWf2,740
Comment Total due Rwf 602740
Please pay your overdue amount
of Rwf 100,000 within 7 days
Payment due by September 30, 2016
Please make payment into Account No. 12345678910
Interest of 10% per annum will be charged on late payments
MEANING OF SUPPLIERS
A supplier is a person or organization that provides something such as a
product or service. This means those people or businesses from where goods
and services are bought and acquired from.
There may be many possible suppliers for the requirements of the business.
After determining the business requirements and confirming that the business
has the necessary funds or can get credit, then the entrepreneur should decide
where to purchase them from.
Factors influencing the choice of effective suppliers
1. The terms and conditions of payment. Different suppliers offer
different terms and conditions of payment. For example,
Some do business only on cash
Others can allow credit terms

Others can allow paying for goods in installments
Some suppliers offer trade and cash discounts …
The entrepreneur therefore should choose a supplier whose terms
and conditions of payment are suitable or favorable to him/her.
2. Lead time and distance between the supplier and the
entrepreneur.
Lead time means how long it takes to order and receive the
requirements of the business. Lead time may depend on such
factors as mode of transportation, place of procurement or where
the requirements are to be bought; local or international market,
conditions of the chosen supplier, nature and number of items
ordered for methods of production and delivery used by the chosen
supplier. The supplier will choose the supplier with the shortest
lead time.
3. The consistency and reliability of the supplier. The
entrepreneur should choose the supplier that who is able to supply
the requirements whenever they are needed to ensure continuity of
production of goods and services.
4. The quality of goods and services supplied. The supplier to be
chosen is the one that is able to supply goods and services with the
right quality, which are therefore relevant in meeting the needs.
The suppliers’ offerings must be approved by the national
standards bureau, and we should check the material accepting
them.
5. Tax and regulatory procedures in the purchase and delivery of
the goods and services. The supplier should be chosen after
checking whether buying from then will not occasion more taxes
and harder regulations. For example, buying from a foreign
supplier from another county may be more disadvantageous on
this regard than buying from local suppliers.
6. Supplier’s capacity in relation to the quantity of requirements
needed.
7. The prices charged by different suppliers for the requirements.
8. …

Learning Unit Two
CREATE A PRODUCTIVE WORKING ENVIRONMENT
2.1 Setting business ethical conduct
Ethical Conduct means acting in ways consistent with what society and
individuals typically think are good values.
Ethical behavior tends to be good for business and involves demonstrating
respect for key moral principles that include honesty, fairness, equality,
dignity, diversity and individual rights.
Business ethics are the guidelines a company uses when interacting with
entities inside and outside the company. It is a conscious effort to treat people
and companies with respect and establish a positive working environment. The
effects of ethical practices in business can benefit a company financially and
they can also help a company gain the elements it needs to grow.
Objectives of ethical conduct
1. To create and maintain a positive image of the company
A business is seen as a single entity by its vendors, the community, its

employees and other corporations. The actions of the company, and not the
actions of any single individual, dictate how the company is perceived by
others. A code of ethics ensures that the company presents a unified image and
maintains a standardized positive image among all of the internal and external
elements it will come into contact with.
2. Compliance with government laws and avoiding sanctions
A company's ethical practices include developing strict guidelines for adhering

to employment laws and avoiding the problems that violating these laws can
create. For example, Sexual harassment, discrimination and hazardous
working conditions are regulated by government laws. A company that violates
employment laws and standards can find itself facing fines, lawsuits and
injunctions that can cause work to stop.

3. Creating good Business Relationships
A company's ethical business practices give the organization a positive

professional reputation among vendors, clients and potential business
partners. Good business ethics can help create strong business relationships
that result in lower product costs, repeat business from customers and sources
of financing for company growth. Maintaining good ethics sustains these strong
business relationships for the benefit of the company and its business
contacts.
4. For retaining employees and therefor avoiding effects of staff turnover
The ethical treatment of employees is a key element in retaining employees and

reducing the effects of turnover. Employee turnover can be damaging to a small
business. A company comes to rely on the staff it has in place, and having to
train new employees due to staff turnover can become expensive and disrupt
growth.
5. To create a healthier working environment and positive culture
Ethical involves the creation of a positive business culture. When workers

strive to act in an ethical manner, they may be less likely to engage in engage
in potentially harmful behavior such as bullying, sexual harassment and
discrimination. The result is a healthier work environment where employees
treat each other with respect and work together as part of a team.
6. For increased employee productivity and avoid unnecessary losses
Employees are less likely to take company property, including office supplies,
or make larger claims on expenses for travel or other business-related
activities, including the cost of conducting some non-business activities.
Employees who act ethically also do not take excessive breaks or spend
company time and resources engaging in personal activities, lowering their
productivity and the profitability of the business.
RULES AND REGULATIONS OF THE BUSINESS
To promote ethical conduct within the business, some rules and regulation
should be set and adhered to by the concerned business members.

Such rules and regulations include for example,
Build Trust and Credibility. The success of our business is dependent on the
trust and confidence we earn from our employees, customers and shareholders. We gain
credibility by adhering to our commitments, displaying honesty and integrity and reaching
company goals solely through honorable conduct.
Respect for the Individual. We all deserve to work in an environment where we

are treated with dignity and respect. Workers and employers need to treat one another in dignity
and respect.
Create a Culture of Open and Honest Communication.

Everyone should feel comfortable to speak his or her mind, particularly with respect to ethics
concerns. In our businesses we should respect every one’s right to freedom of expression.
Upholding the law. Commitment to integrity begins with complying with laws,
rules and regulations where we do business. Complying with the law involves being dedicated to
fair and ethical competition, respecting other people’s proprietary information (intellectual
property rights), complete disclosure of information to the authority, ensuring health and
safety in the working place (maintaining a healthy environment).
Avoid conflicts of interest. Our personal relationships should not

impair the ethical performance of our business activities. Our personal
interests should not make us forget that the businesses should be run in an
ethical manner.
The following are susceptible cases where we should avoid conflicts of interest:
1. Being employed (you or a close family member) by, or acting as a consultant to, a competitor or
potential competitor, supplier or contractor, regardless of the nature of the employment, while
you are employed with your employer.
2. Hiring or supervising family members or closely related persons.
3. Serving as a board member for an outside commercial company or organization.
4. Owning or having a substantial interest in a competitor, supplier or contractor (as you may be
tempted to betray your employing company).
5. Having a personal interest, financial interest or potential gain in any business transaction of your
employing company.
6. Accepting gifts, discounts, favors or services from a customer/potential customer, competitor or
supplier, unless equally available to all of your employer’s employees.

Set Metrics and Report Results Accurately
This involves Set Metrics and Report Results Accurately, Corporate Recordkeeping
Positive attitude to business members

Attitude means a settled way of thinking or feeling about something. (How you
receive and react something).
Types of unethical behavior in a business

1. MISTREATING EMPLOYEES
2. FINANCIAL MISCONDUCT
Financial misconduct may include, but is not limited to, ethics violations, fraudulent
transactions, conflicts of interest, inappropriate expenditure of funds, questionable
internal controls and failure to comply with accounting standards and audit practices,
theft or inappropriate use of cash or other College resources, falsification of hours worked
for payroll purposes and inappropriate spending of cash through the accounts payable
process. (Kwitwara nabi mu by’amafaranga, gukorera umugayo ugamije inyungu
z’amafaranga utari ugenewe)
3. MISREPRESENTATION
Misrepresentation means Fraudulent, negligent, or innocent misstatement, or an

incomplete statement, of a material fact. If a specific misrepresentation induces the other
party to enter into a contract, that party may have the legal right to rescind the contract or
seek compensation for damages. The guilty party avail of the defense that the wronged
party could have checked the facts and have discovered what was wrong. A misstatement
of an intention or opinion is generally not considered a misrepresentation. ( Kugaragaza
ibitandukanye n’ukuri). Example by the time of tax declaration, declaring wrong figures.
The above are unethical behaviors commonly for business owners but even employees can
have unethical behaviours such as:
3. Misuse of company time. Whether it is covering for someone who shows up late or altering
a time sheet, misusing company time tops the list. This category includes knowing a co-worker is
conducting personal business on company time.
4. Abusive Behavior. Too many workplaces are filled with leaders who use their position and
power to mistreat others. Unfortunately, unless the situation involves race, gender or ethnic origin,
there is often little to no legal protection against abusive behavior in the workplace. Abusive
behavior is unethical.
5. Employee Theft. Whether its check tampering, not recording sales in order to skim, or
manipulating expense reimbursements, employee theft is a crime and unethical.

6. Lying to Employees. The fastest way to lose the trust of your employees is to lie to them. If
you ask employees whether their manager or supervisor has lied to them within the past year, you
may be surprised at the results. Lying is unethical.
7. Violating Company Internet Policies. Cyberslackers. Cyberloafers. These are terms

used to identify people who surf the internet when they should be working. This is a huge, multi-
billion-dollar problem for companies. Who would have thought that checking your Facebook or
Twitter account is becoming an ethical issue? It is. Violating company Internet policies is unethical.
Techniques of encouraging a positive ethical behavior in

business
You can help your employees to behave ethically by aligning your company's
management practices with your expectations.
1. Rewards
Catch employees “doing something right” and reward ethical behavior. For example,
you might implement a system in which people can submit anonymous tips telling
about employees behaving in a particularly honest way. Show gratitude when
someone shows honesty and courage on a practice that could potentially hurt
customers or stakeholders. Encouraging ethical behavior is always easier than
confronting unethical behavior.
2. Expectations
Make sure that all concerned people mainly employees know what is expected from
them ethically. Ensure that your company states its values in the employee handbook
and that these values are talked about and implemented in everyday business matters
by all employees in a supervisory capacity.
3. Training
Through training, explicitly teach your employees how to behave in an ethical
manner. Discuss ethically questionable situations and how to respond to them.
Emphasize the benefits of ethical behavior, and point out how employees expect
others to treat them fairly and with honesty.
4. Policies
Set policies to be followed by all when at work. Sometimes implementing a policy to
prevent unethical behavior is the best option. For example, if workers regularly use

the copy machine to make personal copies or steal supplies from the storeroom, you
can require a code for the copier and ask the secretary to distribute office supplies as
requested. Such policies result in employees not having to put their personal integrity
to the test, Baggett said. Consider incorporating ethical behaviors into company policy
as well. For example, confidentiality is required of healthcare workers, and breaching
it can be grounds for termination. The same can hold true in your company for ethical
standards that are essential to a productive work environment.
WAYS TO ADDRESS UNETHICAL BEHAVIOUR AT THE
WORKPLACE
Unethical behaviors can plague a workplace, whether an executive steals
money from the company or an associate falsifies documents. Unethical
behaviors can damage a company's credibility, causing the business to lose
customers and ultimately shut down. However, business owners and their
management teams can work with employees to prevent unethical behaviors.
1. Create a Code of Conduct
A written code of conduct provides employees and managers with an overview

of the type of conduct and behaviors the company expects. It outlines what
behaviors are unacceptable and what measures are taken if an employee
violates the code of conduct. For example, a company with a social media
policy in place prohibiting company discussion may need to discipline or fire an
employee who violates the policy by ranting about a new workplace initiative.
2. Lead By Example
Employees look to business owners and managers for direction on how they
should conduct themselves. As a business owner, make ethics-based decisions
and monitor the individuals you put into leadership roles at your company for
the same values. If you see a manager violating company practices, such as a
policy against workplace relationships, intercede immediately to retain
credibility with other workers.
3. Reinforce Consequences for Unethical Behavior
Business owners must hold their employees accountable when they act
unethically. Start by informing new employees of the rules during their
orientation sessions. Make sure all new workers know the consequences of

policy violations. If an employee acts unethically, refer to the code of conduct
and take the necessary measures to warn or terminate. i.e punish unethical
behaviours.
4. Show Employees Appreciation
Loyal employees feel that a company values the hard work they put into
accomplishing tasks on a daily basis. A loyal employee is less likely to act
unethically. Show appreciation to workers on a regular basis to encourage
loyalty. Consider offering an extra day off per quarter or year to top performers
or institute a bonus program in the sales division to reward hard work.
5. Welcome an Ethics Speaker
Schedule an ethics trainer to visit your work site to discuss ethical behavior
and explain why it is important in organizations, regardless of the size or
industry. Ethics trainers use role-playing, motivational speaking, videos and
handouts to illustrate the importance of ethics in the workplace.
6. Create Checks and Balances
Rather than putting related responsibilities in the hands of one employee,

create a system of checks and balances to minimize the opportunities for
unethical behavior. For example, a sales associate rings up customer
purchases, while an accountant balances the books to ensure that all payables
are received and documented. Use an annual audit to verify established
procedures are being followed and develop new policies to address any unique
situations that arise during the year. i.e make sure that your employees are
given tasks such that the work of one requires that he/she checks the work of
the other = Internal check.
7. Hire for Values
When business owners hire employees, many seek to bring on individuals who
have the education and experience that prove they are skilled workers, capable
of handling the tasks at hand. Employers who want to prevent unethical
behavior also look at candidates' values to ensure they mesh with the
company's culture. Make sure a new employee believes in working diligently to

earn a salary and are ready to comply with company policies. i.e by the time of
hiring ensure to check on their values and ethics.
IMPORTANCE OF ETHICAL CONDUCT IN BUSINESS

Conducting yourself ethically as a small-business owner and encouraging your
employees to engage in ethical business conduct brings about several benefits
for your company. Similarly, unethical conduct can hurt your business
financially and tarnish its image, leading to diminished future opportunities for
your company. The following show the importance of ethical behavior in a
business.
Social Norms
1. Ethical conduct serves to harmonize (kuûmviikaniisha) the working
environment and enable the working society to coexist, adhering to
the same norms.
Ethics involve people from different walks of life, different countries and
different cultures all agreeing on some basic principles of how to conduct
themselves. Since business transactions in our increasingly global economy
involve businesses with employees and owners who come from different
backgrounds interacting with each other on a regular basis, business ethics
provide a common ground everyone can agree upon. For example, accountants
from different backgrounds may all prescribe to the same system of accounting
standards such as GAAP, or General Accepted Accounting Principles. By
everyone adhering to the same standards, investors and other groups can
assess the financial performance of one company using the same methods it
uses to evaluate another company.
Employee Conduct
2. To avoid hurting each other in the business. Ethically behaving
employees hurt their employers nor their colleagues. The same
applies to employers who then cannot hurt their employees when
they ethically behave.
If employees feel they are expected to act ethically and are treated ethically by
their employer, they are less likely to engage in unethical behavior that would
hurt their employer. Employees are less likely to take company property,
including office supplies, or make larger claims on expenses for travel or other

business-related activities, including the cost of conducting some non-business
activities. Employees who act ethically also do not take excessive breaks or
spend company time and resources engaging in personal activities, lowering
their productivity and the profitability of the business.
Legal Problems
3. To avoid problems with the law which might otherwise lead to
various forms of losses.
Depending on the country, state or even city where you are conducting
business, engaging in some unethical activities may lead to trouble with the
law. You may have to work to defend your business from legal action as a
result, which takes away from any profit the business earns. Problems arising
from unethical behavior may seriously affect the company’s ability to operate in
certain markets.
Public Relations
4. To improve the company’s public image and build trust by the
public cooperating well with the surrounding people.
When your company, or the employees within your company, engage in

behavior that is either ethical or unethical, the members of the public who
interact with your company take notice. If your company acts in ways the
public considers ethical, your company enjoys an increase in public trust.
Building a positive image in the public sphere helps your company unlock
future opportunities and avoid intense public scrutiny during periods when
your firm may struggle.
2.2 ASSIGNING RESPONSIBILITIES IN ACCORDANCE WITH

ORGANIZATION STRUCTURE
Meaning of responsibilities assignment
Responsibilities assignment means attributing different tasks available

within an organization to the employees supposed to occupy different job
positions.
Importance of assigning duties
1. To ensure that all necessary tasks are completed.

2. To allow employees to specialize and perform their tasks efficiently.
3. Eliminating redundancy for more efficient use of time and money.
If the responsibilities assignment is not carefully carried out, this may lead to
uncertainty and chaos which hampers the performance of the workers and the
business as a whole.
How to attribute responsibilities to different job positions?
1. Estimate the volume of task
This involves finding out everything that has to be done by employees in the
business and how big it is, i.e if it requires physical force, a lot of time and so
on.
2. Determine the task requirements
After having a clear view of what tasks are to be performed by employees in the
organization, the next step is to find out what employees to fulfill the tasks are
supposed to be fulfilling. Make it clear that an employee to assume this task
will be able to do it if he has this or if he/she doesn’t have this.
3. Allow time to the volume of task
Dividing work tasks between employees is an essential step in running your

business. A clear-cut job description and duty assignment for each employee
ensures that all necessary tasks are completed. Assigning specific duties also
allows employees to specialize and perform their tasks efficiently. An evaluation
of your current employees and their responsibilities is a key step in dividing
duties. Eliminating redundancy in the duties each person performs makes
more efficient use of time and money.
1. Interview current employees to gain a sense of what responsibilities they

currently handle. Ask for suggestions on better dividing work duties to make
the company run efficiently.
2. Write a list of the primary tasks that you need completed by your employees.
Use this as the master list when you divide the duties.

3. Identify redundancy in the current work responsibilities. For example, if two
different people generate reports with the same information, maximize your
employees' time by assigning that report generation to only one person.
4. Evaluate each employee to identify strengths and weaknesses. Determine if

the skills each employee has line up with her current work responsibilities.
5. Identify employees who are able to handle more responsibility than they
currently have. Trusting your staff with greater responsibility helps motivate
them.
6. Assign the tasks on your list to the employees on your staff. Consider the
employee evaluations and conversations held with the employees when making
decisions regarding delegation of these responsibilities.
7. Review the job descriptions to determine if they accurately portray what your
employees are doing. Rewrite the descriptions as needed to reflect the newly
assigned work duties.
RESPONSIBILITY ASSIGNMENT MATRIX
Before looking for employees or assigning responsibilities to people in different

job posts, it is important to design what tasks are involved in each held job
post. Assigning well defined tasks to different employees eliminates confusion
and promotes clarity and specialization which improves performance of
employees.
Responsibilities Assignment matrix (RAM) is a diagram in form of a table

that helps in separating and assigning different tasks available in an
organization to the different job positions.
A RAM is also called a Responsible, Accountable, Consulted, and Informed
(RACI) matrix.
Meaning of RACI matrix:
1. Responsible – the person who does something as part of their job or role
to do a specific task or activity.
2. Accountable – the person who is expected to justify actions taken or
decisions made to deliver the completed task or activity.
3. Consulted – groups or people whose opinions are sought by the person
responsible for the task or activity.
4. Informed – those groups or people that should be kept up-to-date on
progress with the task or activity.
How to use the RACI matrix?
Consider an example of an organization where the following tasks have been

identified:
i. Ensure that the raw materials are bought

ii. Bring products to the customers’ disposal
iii. Recording day to day transactions
iv. Paying workers’ remunerations
v. Producing periodic financial statements
vi. Processing raw materials into products to be sold
If you think about the job positions that should be there to assume the above
tasks, you may imagine the following:
a) The purchasing worker

b) The cashier
c) The sales person
d) The owner of the business
Trying to allocate the different tasks in the different posts using the RAM would
look like this:
Cashier
Production workers
Owner of the business
The purchasing Worker
The sales person
Task Descritpion
Ensure that the raw materials are bought R I I
Bring products to the customers’ disposal R+C I I
Recording day to day transactions C R C I C
Paying workers’ remunerations R+C I I
Producing periodic financial statements R I I
Processing raw materials into products to be sold I R+C
RACI Matrix

Learning unit 2.4 Maintain good
relationship with customers and suppliers
Meaning of relationship in a business
Business relations are connections between stakeholders in the process of

businesses, such as employer–employee relationships, customer-supplier
relations, managers as well as outsourced business partners.
Purpose of maintaining a good relationship with customers and suppliers
Customers and suppliers are very important for the performance of any
business. Losing any of them is not good news for any business.
The major purpose of maintaining good relationships with customers and

suppliers is to keep them happy and interested in doing a fruitful business
with your company.
Methods used to maintain good relationship with customers
To create customer relationships, and keep them strong, you must do all you can
to engage customers. Here are five ways to build customer relationships and
keep them coming back.
1. Communicate.
Rather than just telling customers about your business, have conversations with
them. Find out what your customers need, then show them that you have a
solution to their problem. Train your employees to communicate with customers
and take care to answer customers’ communication.
2. Exceed expectations.
Try to serve the customers better than you think they expected. Do this by
offering great products or services, you can even do it by delivering a product or
service faster than anticipated. This will make your customers keep coming
back.

3. Ask for feedback.
Invite customer feedback to show you are listening. For example, you can place
comment cards on your business counter, or conduct a survey.
Customer feedback helps you find out your customers’ specific needs so you
can find the best solutions to their problems. The better your offering meets
their needs, the more your business will grow.
Always listen carefully to comments and respond promptly, whether it’s a

compliment or a complaint. The worst thing you can do is ask for feedback then
not address concerns. Even negative feedback is valuable and can give you an
honest gauge of customer satisfaction.
4. Connect.
With technology, there are more ways to begin conversations with your
customers than ever before. There are many online tools and social media
outlets you can use to reach customers.
When you engage with customers online, be careful not to create a one-way
conversation. Ask customers questions, and respond to their inquiries.
5. Show appreciation.
Reward long-time customers with a loyalty discount program. You can hand out
reward cards.
With a loyalty program, customers earn points for buying your goods or
services. After earning a certain number of points, the customer gets a reward.
For example, you could reward a customer with a discount on their next
purchase.
Also give away inexpensive branded items, such as pens or notepads, or even
expensive items, like shirts, hats or jackets with your logo on it. It’s a small yet
effective way to say thank you to customers while keeping your business top-of-
mind

Methods used to maintain good relationship with suppliers
1. Always pay on time. Your suppliers are in business, just like you are; they want to
get paid as much as you do. If you foresee that you might have problems meeting your
obligations, work out favorable contract terms before signing. If something unexpected
happens, call your suppliers and talk to them. Your best bet is to reach out to them before
they begin to call you to follow up on overdue bills.
2. Make their job easier. Give your suppliers adequate lead time and communicate
your needs on an ongoing basis. Crises can't always be averted, but if you're the client
who repeatedly calls suppliers with last-minute jobs, they won't be happy. Don't expect
your suppliers always to anticipate your needs. What you request might be distinct
enough to require more time, or what you want might not even be clear. Work with
suppliers if they need to puzzle through what it is you need.
3. Personalize the relationship. Get to know them. It's easy to get caught up in email
communication, but face-to-face contact and the occasional phone call is important. Visit
their offices and invite them to company functions. Doing lunch and meeting for coffee is
also a way to network with suppliers and build up a personal rapport. Suppliers can be
advocates for your business; their industry contacts might in fact become your clients in
the future.
4. Share information. Share information about your business. Keep suppliers in the
loop about changes in key staff, new product lines and special promotions. This lets
suppliers know you value the relationship. It also provides them the opportunity to
market more of their services to you if they spot an additional service they can offer.
Also, if you let them know you're running a promotion that could increase the volume of
sales, they can be better prepared to fulfill an order which is larger than normal.
Developing good relationships with suppliers is not a complicated

process. Be communicative, tell them of your needs and
standards, treat them fairly, be demanding, be loyal, and pay
them on time. It's that easy.
Importance of maintaining good customers and

suppliers relationship to the business
1. Importance of maintaining good relationships with

customers
1. It Reduces Churning of Customers (i.e. instability of market)
Building relationships with customers on a constant basis reduces instability

in the customer number. It gives them good customer care services ensures
that your clients get the satisfaction.

2. It Acts as a Differentiation Point
In the current marketplace where customer competition is very high, the

relationship you have with your clients will be a key differentiator with your
competitors. Businesses that thrive in such environs are those who make
customer relations a key business strategy.
3. Customer relationships enable you to have information from

customers that serves as a basis planning future purchases and sales
Strong relationships show how they will make their future purchases. When
you gauge satisfaction from your service and get a seven, when rating between
1 and 10, then you can conclude that the customer is satisfied. You can make
these clients advocates of your business. You should put in place metrics
which will help you measure customer loyalty and repurchase power.
4. It enables to retain your customers rather than looking to create

new ones which is not always easy.
This statistic is the one that holds more power in the market than any other in
the market. You will incur a seven times cost to acquire new customers than
maintaining your current ones.
5. It makes the existing customers create new connections of

customers.
6. It helps you to avoid aversive word of mouth and Will Reduce

Market Rejection
Unhappy and dissatisfied customers will tell other people about their nasty
experience.. This can work negatively for your business. Customer-business
relationship directly links to repeated purchases and revenue. Unless you are
careful with your relationship status with customers, you will not be able to
understand the impact it subjects to your business. Keep tracking satisfaction
and strong customer relations for ensuring that you keep all your customers.
7. It Increases the Lifetime returns we get from Customers (They give

us revenues for a long time).
Satisfaction leads to building a healthy relationship that will lead to generating

more revenue from a single customer for your business. Firms which are
successful understand the longtime value of a client as it leads to increasing
your returns. The lifetime value of a customer is a benefit that comes from
establishing significant relationships and high customer satisfaction.

Importance of building good relationships with suppliers
1. It can help to get monetary benefits. The good relationships we have

with suppliers enable us to get discounts on goods we purchase.
2. It enables us to get prompt services especially when the supplies are

urgently needed.
3. It enables to improve your manufacturing processes as suppliers will feel

it a necessity to provide you with better quality supplies which
enables to grab a market share from competitors.
4. Providing mutual assurance and awareness. When you’re on

friendlier terms, conflict will be easier to resolve. Suppliers will
more likely seek ways to improve your operations and they will be
able to see your potential needs arise before you do.
WAYS TO ADDRESS CUSTOMER COMPLAINTS

Following a service breakdown, there is often a possibility that you may never
see the customer again. This is potentially disastrous to your business because
it is costlier to win a new customer than maintaining an existing one.
In case a customer presents you with a complaint;
1. Treat complaints as opportunities to redeem missed service expectations
and handle them effectively.
2. Acknowledge any error on your part and do everything possible to resolve
the problem quickly and to the customer’s satisfaction.
3. Thank the customer for bringing his or her concerns to your attention.
4. Have a clear procedure for handling customer complaints including face-
to-face negotiation in a calm and professional manner. Your
documented customer complaints procedure needs to be accessible and
easy to understand by yourself and employees. You need to practice the
procedure with your staff so they feel comfortable when applying it.
Having well-trained staff can be the difference between inflaming or
soothing a situation. Visit Training for more information on skilling up
your staff.
In order to avoid possible future complains and signs of customer
dissatisfaction;

i. Keep a record of all promises, agreements and undertakings you
have with your customers. Clear, documented communication means
you can refer back to it as a source of truth and avoid
misunderstandings.
ii. Understand your legal obligations. Ensure that your business complies
with the relevant laws and regulations with regards to products, pricing,
refunds and warranties.
iii. Listen to your customers (put yourself in their shoes) and make a
note of feedback received from them. Taking the time to follow up on
all the feedback you receive is another great way to improve your
customer service. Your customers will appreciate it if they can see you
have acted on their feedback, or addressed it in some way.
Remember that only a handful of customers will complain to you. Most

customers just choose not to return to your business. If you make it easier for
customers to complain (e.g. anonymous feedback forms, a dedicated place on
your website) then people might be more inclined to let you know about their
experiences. You can then fix the issue before it becomes a problem for more
customers.
WAYS TO ADDRESS SUPPLIER COMPLAINTS

Supplier complaints means the suppliers’ expression of dissatisfaction or
displeasure about the customer’s handling of their dealings.
Most disputes/misunderstandings with your suppliers can be resolved quickly
and efficiently using a common sense approach. If a dispute arises with your
supplier, try these steps:
1. Acknowledge the complaint (Ha agaciro icyo akubwira)
2. Review the issue (Bitekerezeho/Byigeho)
3. Check your facts - Get a ‘fresh eye’ to look over the documentation.
If you have a written contract, the first thing to do is to read it through
carefully. This can help you understand the problem more clearly and get
your facts right before any action is taken. There may also be a dispute
resolution clause in the contract that needs to be followed.
4. Discuss with supplier. Contact your supplier as soon as you can and
explain the issue. You may be able to find a simple resolution by simply
talking it through.
5. Listen to what they have to say – put yourself in their position and try
to see the situation from their point of view as well.

6. Keep records to help you keep track of what has happened. You may
need these records the matter is taken further.
7. Make a decision
8. Communicate decision
Remember – the issue could be a simple misunderstanding. There may be facts
or background that you don't know about, so it often pays to give the supplier
the benefit of the doubt before you take any action.
LEARNING UNIT 3
RUNNING REAL BUSINESS OPERATIONS

3.1: Setting of short-term business goals
Goals are used to help a business grow and achieve its objectives. They can be
used to foster teamwork and help the business describe what it wants to
accomplish. Setting goals is an important part of any business plan.
Business Goals: Business goals are a description of what a company expects

to accomplish over a specific period of time. Businesses usually outline their
goals and objectives in their business plans. Goals might pertain to the
company as a whole, departments, employees, customers, or any other area of
the business.
The Importance of Business Goals

Businesses should not fear setting goals because there is absolutely no
downside to the process. Goals give a business direction and help measure
results.
1. Business goas help to measure success - Good organizations should
always be trying to improve, grow, and become more efficient. Setting goals
provides the clearest way to measure the success of the company.
2. They make Leadership decisions matter(Impamvu yazo yumvikana
ikubahirizwa) and create cohesion - Setting goals ensures that everyone
understands what the organization is trying to achieve. When the leadership
team clearly understands what the business is trying to accomplish, it provides
greater rationale for the decisions management might make regarding hiring,
acquisitions, incentives, sales programs, etc.
3. They improve employee performance and work relevance (Gukora
igikenewe). Knowledge is power - If an employee knows and understands the

goals, it becomes easier for him or her to make daily decisions based on the
long- and short-term goals that were established.
4. They enable to review and change our way for better results. “Reassess
goals” - When goals are set, they can be monitored on a regular basis to verify
the business is headed in the right direction. If the business is not achieving or
moving towards accomplishing its goals, then changes or adjustments need to
be made.
CATEGORIZATION OF BUSINESS GOALS

1. Short-Term Goals (Ibintu wiyemeje kujya ukora ariko bikorwa mu gihe gito) (Nubwo Atari cyo
gisubizo cya nyuma wakabihaye ariko nibura bikemura ikibazo mugihe urimo)
Short-term goals are statements describing the daily, weekly, monthly,

quarterly and annual actions every business undertakes to reach medium-
term and long-term goals.
Each goal should be a single action, prioritized for that day and week, that
supports a monthly or quarterly goal.
When setting short-term goals, keep them SMART. The acronym stands for
Simple (Specific), Measurable, Achievable, Relevant and Time-Sensitive.
Setting SMART daily goals prevents "but-first" time management (But-first:

pressing someone/yourself for something that was not planned for the
achievement of medium term goals). But-first tasks help employees look busy
without advancing longer-term goals. When carrying out a daily task, avoid
telling yourself: "I need to [insert task], but first I will [insert distracting
task]."
Examples of SMART short-term goals:
Daily Goals
 Hold a 15-minute AM strategy meeting every morning.

 Make 200 calls between 8 a.m and 8 p.m.
 Convert 15 of those contacts to appointments or sales.
 Schedule a 15-minute PM strategy meeting every afternoon.
 Adjust calling to ensure 15 conversions out of 100 for the day.
Weekly Goals
 Review 10 resumes.
 Set appointments to conduct interviews.
 Record weekly sales data totals.
Monthly Goals
 Plug previous month's sales data into the monthly report chart.
 Generate past month's sales report by the 10th of the current month.
 Hold monthly sales performance meeting.
Quarterly Goals
 Generate quarterly report.

 Send tax payments.
 Review previous year's same-quarter performance versus this year's data.
Annual Goals
 Generate annual report.

 Plot data to determine trends.
 Print trend data from prior and current year.
 Plot data for past five years (if you've been in business that long).
 Identify trends.
 Hold a brainstorming session to generate solutions.
2. Medium-Term Goals
Medium-term goals are statements of things to be achieved over relatively

longer periods of time (over one year but less than 5 years) and help in
achieving a long term goal.
They bridge the gap between daily activities and the long-term vision you have
for your company.
Examples of SMART Medium-term Goals:
 Reduce turnover by 15 percent in each of the next four quarters.

 Use suggestive selling to increase the total value of each sale by 10 percent by
the end of the current fiscal year.
 Send a service quality survey to every customer within 30 days of their first
contact.
3. Long-Term Goals
Long-term goals define the company's vision. They tend to be loftier(more
imposing/with more weight) than short- and medium-term goals and often
have intentions that extend beyond profit-making, such as building and
connecting communities, eradicating disease, preserving resources,
developing an educated workforce and reducing global conflicts.

Examples of SMART Long-Term Goals:
 Become the industry leader in your field with brand-building, retention and
recruitment.
 Form partnerships with local school systems to increase job-readiness of new
graduates (community-building).
 Increase your company's investment of time, money and resources in the local
community by 5 percent per year for the next five years.
 Invest 1 percent of profits in combating preventable diseases in supply-chain
communities.
Learning Outcome 3.2: Optimize the utilization of available

resources
Definition of business resources: Business resources are Human, financial,

physical, and knowledge factors that provide a firm the means to perform its
business processes. (See also factors of production).
Types of business resources
 Human resources
 Material resources
 Financial resources
 Technology resources
 Time resources
 Information resources: Requisite knowledge
Purpose of optimizing the utilisation of available resources
Resource optimization is the set of processes and methods to match the

available resources (human, machinery, financial) with the needs of the
organization in order to achieve established goals.
The purpose of optimizing the use of resources is to achieve desired results

within a set timeframe and budget with minimum usage of the resources
themselves. The need to optimize resources is particularly evident when the
organization’s demands tend to saturate and/or exceed the resources currently
available.

Methods used to control utilization of resources
Procedures of using resources: In your business, set and agree on how

you should use the resources available to avoid misuse.
Targeted result: For a better use of the available resources, set the results
to be achieved using a defined amount of resources and ensure to respect it.
Anticipated emergencies in planning: Think about any emergencies that

may arise and set aside resources for it so as you don’t need to misuse them
in case of an unpredicted event.
Inventory planed: Think about the size of inventory that needs to be used
in a given period of time and ensure to use it as it is for maximum results.
This will avoids unplanned imprests.
Importance of optimizing available resources
How good/important is it for
(How good it is for Employees, owners and other stakeholders when an

organization optimizes resources) think about it in groups.
Learning Outcome 3.3: Employ targeted promotional and marketing

campaigns
Product promotion
Meaning of product promotion

Product promotion means an action taken by a company's marketing staff
with the intention of encouraging the sale of a good or service to their target
market.
For example, product promotion performed by a typical business might take

the form of advertising the product in question via print or Internet ads, direct
mail or e-mail letters, trade shows, telephone and personal sales calls, TV and
radio ads, billboards, posters and flyers.

Aspects of product promotion
1. Advertising product or brand: Having a known, trusted brand is

important for your company to thrive. Product promotion will help if
your target audience doesn’t know or trust your brand (make the
customers know and trust), and this will help you to increase your
customer base and sales.
2. Generating sales: Sales promotion is designed to increase sales or

encourage the use or trial of a product or service. Sales promotions take
many different forms, but they all focus on persuading
a target audience to make a purchase or become a client of a business.
3. Creating brand loyalty. Brand loyalty is defined as positive feelings

towards a brand and dedication to purchase the same product or service
repeatedly now and in the future from the same brand, regardless of a
competitor's actions or changes in the environment.
Elements/tools/piece of promotion
1. Public relations/publicity
Public relations (PR) is the practice of deliberately managing the spread
of information between an individual or an organization and the public.
Public relations may include an organization or individual gaining exposure to
their audiences using topics of public interest and news items that do not
require direct payment.
Publicity is often referred to as the result of public relations, in terms of
providing favourable information to media and any third party outlets. This is
done to provide a message to consumers without having to pay for direct time
or space. This in return creates awareness and achieves greater credibility.
After the message has been distributed, the publicist in charge of the
information will lose control of how the message is used and interpreted, in
contrast to the way it works in advertising.
Publicity therefore means doing something that will positively expose you to
the public and create awareness. (Examples, participation in umuganda,
supporting vulnerable people,…)
2. Advertising
Advertising means spreading information about a product to the prospective

customers to make them more informed and interested in buying it.

It refers to any paid form of non-personal communication transmitted through
the media about a product or idea by an identified sponsor who in this case is
the entrepreneur or enterprise.
Advertising is done through media (Means through which the advertising

message about a product is passed onto the customers.).
Forms of advertising media:
Print media vs Broad cast media
Outdoor vs Indoor advertising media
Display advertising
Sales promotion (p95 Curriculum)

Personal selling
Direct marketing


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Learning Unit ONE

IDENTIFY ACTIVITIES TO BE ACCOMPLISHED FOR REAL BUSINESS

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

 The business location

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Working place lay out

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Product or line layout

This type of layout is preferred for continuous production, i.e.,

Production of sandals apart

Cutting leather into strips-Assembling leather strips-Fixing soles- finishing works.

Production of shoes apart

Cutting and modelling leather-Assembling leather pieces-Fixing soles- Finishing works.

Process or functional layout

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

This type of layout is generally employed for industries engaged in

Example: In a tailoring workshop, personnel in charge of cutting and

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Computers and Softwares

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Office furniture is needed to conduct office work efficiently and comfortably.

- Chairs, sofas, couches for sitting

Furniture can be made of wood, metal, plastic, and fiberglass. Attractive

RAW MATERIALS FOR INITIAL STORAGE

"Production machinery or equipment" means machinery or equipment used in

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

 It involves giving up some ownership or equity in your business to an

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

5. Government grants and subsidies …

1.2 RECRUIT EMPLOYEES IN LINE WITH TASK REQUIREMENST

 Job design and development

1. Job design and development

 The organization design

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Managing Director/General manager

Marketing Manager Production Manager Personnel Manager

Support Staff Support Staff Support Staff

 Knowledge of a secretarial duties

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Step 1o Identifying the vacancy

 The number of posts to be filled

The following steps are important in analyzing a job −

 Recording and collecting job information

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

 Job Title / Job Identification / Organization Position

 Machines, Materials and Equipment

A job specification document provides information on the following elements −

 Training and development

Business Organization Notes compiled by NDACYAYISENGA Vedaste IPRC Kigali

Step 3o Searching the Right Candidates

Internal sources of recruitment refer to hiring employees within the organization