TOPIC FOR REVISION – ESP1

Unit 1: Management
1. What is the function of management?
The process is used to accomplish organizational goals through planning, organizing, leading, and
controlling people and other organizational resources.
2. The roles (tasks) of a manager and its significance?
- Planning: setting objectives, decide how they can achieve or accomplish by developing strategies, plans
and precise tactics, allocating resources (people and money).
- Organizing: analyze and classify the activities of the organization and the relations. Divide the work
into manageable activities and then into individual tasks. Select people to perform those tasks.
- Integrating (motivating and communicating): communicate objectives to the people responsible for
attaining them. Have to make the people who are responsible for performing individual tasks form
teams, make decisions about pay and promotion - supervising the work of their subordinates.
- Measuring performance: to see whether the objectives or targets set for the organization as whole
and for each individual member of it are being achieved.
- Developing people: both subordinate and themselves. A developed team leads to excellent
performance. Need to assess strengths and opportunities, host a development conversation and monitor
the progress.
- Consider the future and modify or change the objectives when necessary and introduce the
innovations which allow business to continue. Manage businesses relations with customers, suppliers,
distributors, bankers, investors, neighboring communities and public authorities and deal with any crisis
that arises.
3. The differences between a manager and a leader?
- Managers focus on planning, organizing, and controlling resources to achieve organizational goals.
They are responsible for setting objectives, allocating resources, and ensuring that tasks are completed
efficiently. Managers often have a strong understanding of processes and procedures, and they are good
at delegating and motivating their team members.
- Leaders focus on inspiring and motivating their team members to achieve more than they thought
possible. They set a clear vision for the future, and they empower their team members to take risks and
innovate. Leaders are also good at building relationships and creating a positive work environment.
- The employee will obey the manager, but people follow a leader, it is a voluntary choice.
- Leaders do not have to hold a management position.
VOCABULARY

A person who provides

Consultant When someone is raised to a
expert advice to a company Promotion
higher or more important position
A situation of danger or The section of the economy under
Crisis Public sector
difficulty government control
Innovation A new idea or method Strategy A plan for achieving success
Something you plan to do A person with a less important
Objective (n) Subordinate
or achieve position in an organization
Unit 2: WORK AND MOTIVATION
1. The importance of motivation?
Firstly, motivation is a driving force that enhances the individual and organizational performance.
- higher productivity levels ⇒ employees more engaged and satisfied; hence lowering absenteeism and
turnover.
- enhanced creativity because it drives people to think outside of the box and come up with new and
innovative ideas.
- increase workplace harmony as motivated people are likely to trust, cooperate and communicate
effectively with the managers, which can foster labor relations in the workplace.
- improving a company's reputation and strengthening recruitment. By motivating employees,
companies can create a positive and productive work environment that attracts and retains top talent
and motivated and engaged employees capable of providing excellent customer service.
 Effective leaders and organizations understand the importance of motivation and work to foster
it among their teams
2. Common types of motivators?
a. Intrinsic motivation: refers to the act of doing something that does not have any obvious external
rewards. You do it because it’s enjoyable and interesting to you, not because of any outside incentives or
pressures, like rewards or deadlines. Intrinsic motivators come from within an individual, such as their
own interests, values, and goals.
Examples
- Enjoyment: Engaging in activities that are pleasurable and fun
- Curiosity: The desire to learn and explore new things
- Challenge: Seeking out and overcoming difficult tasks
- Personal growth: Striving to develop one's skills and knowledge
- Autonomy: Having the freedom to make one's own choices and decisions
b. Extrinsic motivation: refers to the behavior of individuals to perform tasks and learn new skills
because of external rewards or avoidance of punishment. Extrinsic motivators come from external
sources, such as rewards, punishments, or social recognition.
Examples
- Money: Financial rewards, such as salary, bonuses, or commissions
- Power: The desire to have control over others and influence their behaviors
- Status: The desire to be respected and admired by others
- Recognition: Receiving praise or rewards for one's accomplishments.
- Competition: The desire to outperform others and achieve success
3. Theory X and Theory Y

Theory X Theory Y
Authoritarian leadership Participative leadership
Autocratic management style Democratic management style
Pessimistic approach Optimistic approach

- Theory X: It assumes that most people are incapable of taking responsibility for themselves and have to
be looked after or threatened, for example with losing their job and rewarded with incentives, probably
monetary ones such as a pay rise or bonuses.
It has traditionally applied, for example, by managers of factory workers in large-scale manufacturing.
It relates to the basic, lower order needs at the bottom of the hierarchy, such as financial security.
Apply when:
- Workforce is large and unskilled
- The work if repetitive and routine
- Theory Y: Most people have a psychological need to work, and are given the right conditions - job
security, financial rewards - they will be creative, ambitious and self-motivated by the satisfaction of
doing a good job.
It is probably more applicable to skilled professionals called “knowledge workers” - managers,
specialists, programmers, scientists, engineers - than people in unskilled jobs.
It relates to higher order needs such as esteem (achievement, status and responsibility) and self-
actualization (personal growth and fulfillment) that can be pursued if basic needs are needed.
Apply when:
- Workforce is small and highly skilled
- Work is complex and challenging
- There is a need for creativity and innovation
- by skilled professionals and “knowledge workers” - managers, specialists, programmers,
scientists, engineers
4. Maslow’s hierarchical needs
Maslow’s hierarchy of needs is a motivational theory in psychology comprising a five-tier model of
human needs, often depicted as hierarchical levels within a pyramid. The five levels of the hierarchy are
physiological, safety, love/belonging, esteem, and self-actualization. Physiological (survival) needs are at
the bottom and the more creative and intellectually oriented “self-actualization” needs are at the top.
Maslow argued that survival needs must be satisfied before the individual can satisfy the higher needs.
The higher up the hierarchy, the more difficult it is to satisfy the needs associated with that stage,
because of the interpersonal and environmental barriers that inevitably frustrate us.
- Physiological needs: are biological requirements for human survival, e.g., air, food, drink, shelter,
clothing, warmth, sex and sleep.
- Safety needs: people want to experience order, predictability, and control in their lives. Safety needs
can be fulfilled by the family and society (e.g., police, schools, business, and medical care)
- Love and belongingness needs: refers to a human emotional need for interpersonal relationship,
affiliating, connectedness, and being part of a group (e.g., including friendship, intimacy, trust,
acceptance, receiving and giving affection, and love)
- Esteem needs: are the fourth level in Maslow’s hierarchy and include self-worth, accomplishment, and
respect. 2 categories: (i) esteem for oneself (dignity, achievement, mastery, independence) and (i) the
desire for reputation or respect from others (e.g., status, prestige)
- Self-actualization needs: are the highest level in Maslow’s hierarchy, and refer to the realization of a
person’s potential, self-fulfillment, seeking personal growth, and peak experiences.
The order of the levels is not completely fixed. For some, esteem outweighs love, while others may self-
actualize despite poverty. Our behaviors are usually motivated by multiple needs simultaneously.
- Deficiency needs concern basic survival and include physiological needs (such as the need for food,
sex, and sleep) and safety needs (such as the need for security and freedom from danger).
- Growth needs are more psychological and are associated with realizing an individual’s full potential
and needing to ‘self-actualize’. These needs are achieved more through intellectual and creative
behaviors.

Unit 3: COMPANY STRUCTURE

What is an organizational structure?
- An organizational structure is the levels of management and division of responsibilities within an
organization.
Chain of command
A chain of command defined by a ranking of authority where senior people in an organization direct and
control employees who are below them. There is a clear chain of command running down the pyramid.
All the people in the organization know what decisions they are able to make, who their line manager is
(to whom they report), and who their immediate subordinates are (over whom they have line authority,
and can give instructions to).
It is to distribute power and responsibilities, keep employees aware of company news and create a
system for sharing knowledge. It also ensures each employee is responsible for their own work but also
has a more senior leader to offer support, encouragement and motivation.
Functional structure
A functional structure is an organizational structure that groups employees into different departments
based on areas of expertise such as marketing department, finance, human resources, etc. This type of
structure is one of the most common types in business, especially in larger companies, where employees
within each department typically only communicate with each other, rather than dealing with workers in
other departments.
Advantage: within each team, experienced managers have the chance to teach their team members the
same skills they possess, resulting in an enhanced skill set for all involved.
Disadvantage: people are more concerned with the success of their own department than the
achievement of the common goals of the company.

Strengths Weaknesses
- slow response to environmental changes
- economics of scale
- decisions pile up
- enables in-depths knowledge and skill development
- poor horizontal coordination
- able to accomplish functional goals
- less innovation
- works best with one or a few products
- restricted view of organizational goals
Flattening hierarchies
Flattening hierarchies is a modern tendency, referring to reducing the levels of management in an
organization so that there's less separation between executives and employees. The goal is to create a
more open, collaborative work environment where communication flows freely, decision-making is
faster, and employees feel more empowered and valued.
Benefit of this way is that most staff members have a heightened level of responsibility and autonomy in
their work and an increased ability to make important decisions without consultation.
Strengths Weaknesses
- Better Communication: Information flows quickly
- Role Confusion: Responsibilities may blur.
across fewer layers.
- Manager Overload: Fewer leaders, more
- Employee Empowerment: Direct involvement in
work per leader.
decisions.
- Decision Delays: Too many voices can slow
- Increased Agility: Faster responses to changes.
decisions.
- Innovation-Friendly: Ideas from all levels are more
- Limited Career Paths: Fewer upward
visible.
mobility options.
- Higher Engagement: Employees feel more valued.

Matrix Management
In a matrix, employees report to more than one manager—often both a functional manager (based on
their role or department, like marketing or finance) and a project or product manager (focused on
specific projects or products). This structure allows for better resource sharing and flexibility, making it
popular in organizations that handle complex, interdependent projects.
Three conditions for Matrix structure:

- Environmental pressure exists

for two or more critical outputs, - The environmental domain of
- Pressure exists to share scarce
such as for in-depth technical the org is both complex and
resources across product line.
knowledge (functional unstable.
- The org is typically medium
structure) and frequent new - Frequent external changes and
sized and has a moderate
products (divisional structure). high interdependence between
number of product lines.
- This dual pressure means a departments require a large
- It feels pressure for the shared
balance of power is needed amount of coordination and
and flexible use of people and
between functional and product information processing in both
equipment across those
sides of the or and a dual vertical and horizontal
products.
authority structure is needed to directions.
maintain that balance.

Strengths Weaknesses
- Can meet dual demands of customers - Dual authority can be frustrating and confusing
- Flexible sharing of human resources across - Participants need good interpersonal skills and
department extensive training
- Adapt to frequent changes in unstable - Very time-consuming
environment - Requires a lot of effort to maintain power
- Opportunity for functional and product skill balance
development
- Best in medium orgs with multiple products
VOCABULARY
A system of authority with different The power to give
levels, one above the other, e.g., a Line instructions to people at
Hierarchy/ chain authority the level below in the
series of management positions,
of command chain of command
whose holders can make decisions,
or give orders and instructions. To be responsible to
A specific activity in a company, e.g., To report someone and to take
Function to instructions from them
production, marketing, finance.
Independent, able to take decisions
To give someone else
without consulting someone at the
Autonomous To responsibility for doing
same level or higher in the chain of
delegate something instead of
command.
you

Unit 4: MANAGING ACROSS CULTURE

1. Richard Lewis model of types of culture
The Lewis Model: was developed by linguist and leading cross-cultural specialist Richard D. Lewis. The
model divides humans into 3 clear categories, based not on nationality or religion but on BEHAVIOR,
namely, Linear-active, Multi-active and Reactive.

Linear-active Multi-active Reactive

Reactive cultures are

Highly task-focused, Multi-active cultures focused on harmony,
prioritize schedules, prioritize relationships listening, and respect,
Characteristics and approach tasks and flexibility, often with an emphasis on
sequentially (one at a handling several tasks adapting to the
time) simultaneously situation rather than
imposing their views

Indirect, often focused

Direct, logical, and Expressive, emotionally
on listening and
data-driven, with an rich, and often indirect,
Communication style understanding others
emphasis on facts and focusing on building
before responding, to
efficiency personal connections
avoid confrontation

Southern European,
Northern European and
Latin American, and
North American East Asian cultures, like
Example Middle Eastern
cultures, like Germany, Japan, China, and Korea
cultures, like Italy,
Switzerland, and the US
Spain, and Brazil
Strong interpersonal Strong consensus-
Reliable planning, time
relationships, building, diplomacy,
Strengths management, and task
adaptability, and and sensitivity to group
completion
passion harmony
May come across as May seem overly
May seem rigid or
disorganized or overly passive or indecisive in
Challenges impersonal in cultures
social in more task- more action-oriented
that value relationships
focused cultures cultures.
2. The conflict between globalization and localization
Glocalization: is a combination of the word “globalization” and “localization”. The term is used to
describe a product or service that is developed and distributed globally but is also adjusted to
accommodate the user or consumer in a local market.
The conflict between globalization and localization refers to the tension between the forces of global
integration and local autonomy. Globalization is the process of increasing interconnectedness and
interdependence among countries, economies, and cultures. It involves the flow of goods, services,
capital, information, and ideas across national borders. Localization, on the other hand, emphasizes the
preservation of local customs, traditions, languages, and identities
There are several key points of conflict between globalization and localization:
- Economic Impact: Globalization often leads to the expansion of multinational corporations and the
homogenization of products and services. This can threaten local businesses and industries, as well as
cultural diversity. Localization, on the other hand, aims to protect local economies and promote local
industries.
- Cultural Identity: Globalization can lead to the spread of Western cultural values and norms, which can
erode local traditions and identities. Localization seeks to preserve and promote cultural diversity and
local customs.
- Environmental Concerns: Globalization can contribute to environmental degradation through
increased consumption, resource extraction, and pollution. Localization emphasizes sustainable practices
and the protection of local ecosystems.
- Political Sovereignty: Globalization can challenge the sovereignty of nation-states, as international
organizations and agreements may impose regulations and policies that limit local autonomy.
Localization seeks to maintain political sovereignty and decision-making power at the local level.
It is important to note that globalization and localization are not mutually exclusive. Many argue for a
balanced approach that combines the benefits of global integration with the preservation of local
autonomy and cultural diversity. This can be achieved through policies that promote fair trade,
sustainable development, and respect for local customs and identities.
VOCABULARY
Globalization An invented word combining
Improvise To do something when
worldwide and regional concerns
necessary without having
Logic Thought based on reason and already planned it
judgement rather than feelings
and emotions Status Respect, prestige, ore
Confrontation A face-to-face disagreement or importance given to
argument someone
Collectivist Believing that the group is
Compromise Reducing demands or changing more important than the
opinions in order to agree individual
Intuition Understanding or knowing Lose face To be humiliated or
without consciously using reason disrespected in public
Connections People of influence or importance Interrupt To cut into someone else’s
with whom you are associated turn to speak
Eye contact Looking directly at the
people you are talking or
listening to
Unit 5: RECRUITMENT
Recruitment is the entire process behind sourcing, attracting, shortlisting, interviewing, signing, hiring,
and onboarding new employees to your organization. It’s the entire process governing how talent finds
your brand, gets to know it through candidate experience and comes aboard as an employee (and all the
tools involved in the process, too).
Internal recruitment: when a vacancy is filled by someone who is an existing employee of the business.
External recruitment: when a vacancy is filled by someone who is not an existing employee and will be
new to the business

Stage Description
Identifying the hiring needs Analyse vacancies and pinpoint the skills and
experience required for success
Preparing a job description Write a compelling description to attract qualified
candidates
Talent search Utilize various methods to find top talent internally
and externally
Screening and shortlisting Prioritize applications based on qualifications and
conduct initial interviews
Interviewing Assess shortlisted candidates through in-depth
interviews and potentially skill tests
Evaluation and offering employees Present a competitive offer to your top pick and
negotiate terms
Onboarding and introducing Welcome the new hire, provide necessary
information, and integrate them into the team

Unit 8: PRODUCTION
Production: the process of converting inputs such as land, labor and capital into saleable goods, for
example shoes and cell phones.
The process of industrial production
- Product Design and Development
- Raw Material Procurement
- Material Processing
- Assembly or Manufacturing
- Quality Control and Testing
- Packaging
- Storage and Warehousing
- Distribution and Transportation
- Sales and Marketing
- Customer Support and Service
- End-of-Life Recycling or Disposal
VOCABULARY

Of materials, parts, work in process, Involved in producing and

Inventory Supply chain
and finished products delivering g&s
From other companies
Componen Outsourcing rather than manufacturing
That make up a product or machine
t them
That can be achieved from a Economics of Arising from large-scale
Capacity
production process scale production
And other facilities used in the Such as manufacturing a
Plant
production process Lead time product or delivering it to
a customer
Location Of a factory or other facility

Unit 9: LOGISTICS
1. Different strategies for stock control and manufacturing (Pull and Push strategies)
- Pull strategy: company manufacture depending on current demand, which is satisfied from a small
inventory. This is a replenishment strategy: both production and supplies are constantly reacting to the
actual consumption of components, rather than planning ahead.
- Push strategy: include lean production, stockless production, continuous flow manufacturer and agile
manufacturing, nothing is bought or produced until it is needed, production is based on estimates of
future demand, and begins according to the planned production lead time.
2. Just-In-Time (JIT) production
- JIT: production method focusing on reducing and eliminating the need to hold inventories of raw
materials or components and on reducing work in progress and inventories off the finished product. The
raw materials and components are delivered just in time to be used in the production process, the
making of any parts is taken just in time to be used in the next stage of production and the finished
product is made just in time to be delivered to the customers.
VOCABULARY

(of production) using small

Accurate Correct, exact Lean quantities and avoiding any
waste
Able to move quickly and Designing and managing the
Agile
easily Logistics flow of goods, information, and
other resources
A guess of what the size or
Estimate
amount of sth
Manual Done with the hands
A statement of what is
Forecast expected to happen in the Replenish To fill sth up again
future

Unit 12: MARKETING

1. A product life cycle: the standard pattern of sales of a product over the period that it is marketed.
The introduction stage: following a product’s launch, generally involves slow growth. There are
probably no profits because of the heavy advertising, distribution and sales promotions expenses
involved in introducing a product onto the market. Customers must be aware of the product’s existence
and persuaded to buy it. Some producers will apply a market-penetration strategy, selling product at as
low price as possible, to attain a large market share.
The growth period: early adopters’ join the innovators who were responsible for the first sales, so sales
rise quickly, producing profits. Competitors will probably enter the market, reduce prices but the
competition will increase the market’s awareness and speed up the adoption process.
The maturity stage: During the maturity stage of a product's life cycle, the market reaches a saturation
point, and sales stabilize. This stage can last for several years and is characterized by fluctuations due to
evolving marketing strategies. Marketing managers aim to maintain the product's appeal by converting
nonusers, exploring new markets and segments, and encouraging increased usage among existing
customers. They may introduce product modifications, such as new features, sizes, or stylistic changes.
Managers also have the option to adapt the distribution methods, adjust prices, increase advertising, run
aggressive sales promotions, and seek new distribution channels to prolong the product's life cycle.
The decline period: the product begins to be replaced by other ones, due to advances in technology, or
changes in fashions and tastes. Some manufacturers will abandon it to invest their resources in more
profitable or innovative products.
2. Role of marketing
Marketing is a dynamic and comprehensive function that serves as a bridge between organizations and
their customers. Its role encompasses understanding customer needs, developing products, creating
awareness, and building and maintaining strong brands, all with the aim of driving business growth and
success.
3. Pricing and distribution strategies
Pricing Strategies:
- Cost-Plus Pricing: This strategy involves setting the price of a product by adding a markup to the
production or acquisition cost. It's a straightforward approach but may not take into account customer
demand or competition.
- Value-Based Pricing: With this strategy, pricing is determined by the perceived value of the product to
the customer. It considers factors like the benefits, features, and quality of the product, as well as what
customers are willing to pay.
- Competitive Pricing: In this approach, prices are set based on what competitors are charging for
similar products. Companies may choose to price their products lower, at par, or higher than
competitors.
- Dynamic Pricing: This strategy involves adjusting prices in real-time based on demand, customer
behavior, and other market factors. It's commonly used in e-commerce and the travel industry.
- Penetration Pricing: Companies may use this strategy to initially set lower prices to gain market share
quickly. Once they have a foothold in the market, they may gradually increase prices.
- Price Skimming: The opposite of penetration pricing, price skimming involves setting a high initial
price for a new product and gradually lowering it over time. This strategy is often used for innovative or
premium products.
Distribution Strategies:
- Intensive Distribution: In this strategy, products are made available through as many channels as
possible. It's commonly used for consumer goods where broad availability is essential.
- Selective Distribution: Companies use this approach to select specific retailers or distributors to carry
their products. It's often seen in industries where brand image and customer experience are important.
- Exclusive Distribution: Exclusive distribution limits the number of retailers or distributors allowed to
sell a product. It's typically used for high-end or luxury items.
- Direct Distribution: Some companies choose to sell directly to consumers, bypassing (bỏ qua)
intermediaries. This can be done through company-owned stores, e-commerce websites, or direct sales
teams.
- Franchising (nhượng quyền): This strategy involves granting individuals or businesses the right to
operate under the company's brand and distribute its products or services.
- Online and E-commerce: With the growth of the internet, many companies employ e-commerce
distribution strategies, reaching customers through online marketplaces, their websites, or mobile apps.
VOCABULARY

Distribution All the company or individuals (‘middlemen’) involved in moving G&S

channel from producers to consumers
An intermediary that stocks manufactures’ goods or merchandise, and
Wholesaler sells it to retailers and professional buyers

Marketing Dividing a market into distinct groups of buyers who have different
segmentation requirements or buying habits
Making a product (appear to be) different from similar products
Product
offered by other sellers, by products differences, advertising, packaging
differentiation
…
Market Possibilities of filling unsatisfied needs in sectors in which a company
opportunities can profitably produce G&S
Setting high price for a new product, to make maximum revenue before
Market skimming competing products appear on the market

Sales Someone who contacts existing and potential customers, and tries to
representative persuade them to buy G&S
The attributes or characteristics of a product, such as size, shape,
Product features quality, price, reliability…
The extent to which supply or demand (the quantity produced or
Price elasticity bought) of a product responds to changes of price

Market The strategy of setting a low price to try to sell a large volume and
penetration increase market share
Unit 13: ADVERTISING
1. Different kinds of sales promotions
A sales promotion is a marketing strategy in which a business uses a temporary campaign or offer to
increase interest or demand in its product or service. Reason: to boost sales. Sales boosts may be needed
to reach a quota as a deadline approaches, or to raise awareness of a new product.
- Discounts, coupons, rebates, buy one get one, loyalty programs, flash sales, clearance sales, contests and
sweepstakes, gifts with purchase, referral programs, trade-in promotions, products bundling, …
2. Conditions to make a successful advertising campaign
- Clear Objectives: Define clear and specific objectives for your advertising campaign. Whether it's
increasing brand awareness, driving sales, launching a new product, or promoting an event, having well-
defined goals will guide your strategy and measure success.
- Know Your Audience: Understand your target audience inside out. This is crucial for your campaign to
land—and excel. Conduct market research to identify their demographics, preferences, behaviors, and
pain points. Tailor your messaging and creative elements to resonate with their interests and needs.
- Compelling Message: Craft a compelling message that captures attention and communicates the
unique value proposition of your product or service. Your message should be clear, concise, and
memorable, resonating with your audience on an emotional level.
- Creative Execution: Develop creative assets that stand out and align with your brand identity. Whether
these are visual elements, copywriting, or multimedia content, ensure that your creative execution is
captivating, relevant, and consistent across all channels.
- Multi-Channel Approach: Reach your audience where they are by leveraging multiple channels and
platforms. Spread your message across digital channels such as social media, email, search advertising,
and display ads. Another key element for a successful campaign? Diversify your approach to maximize
reach and engagement.
- Integrated Strategy: Coordinate your advertising efforts across different channels and touchpoints to
create a seamless and cohesive experience for your audience. Ensure that your messaging and creative
assets are consistent and complementary across all platforms.
- Call to Action (CTA): Incorporate clear and compelling calls to action in your advertising materials to
prompt the desired response from your audience. Whether it’s making a purchase, signing up for a
newsletter, requesting more information, or visiting your website, your CTA should be persuasive and
easy to follow.
- Flexibility and Adaptability: Stay agile and adaptable in response to changing market dynamics,
consumer trends, and competitive landscape. Be willing to pivot your strategy, refine your messaging,
and reallocate resources based on evolving needs and opportunities.
Unit 23: THE BUSINESS CYCLE
Business cycle: Causes
External causes:

Changes in the global economic environment, such as shifts in international

Global Economic
trade, financial crises, and fluctuations in commodity prices, can impact a
Factors
country's economy and contribute to the business cycle.
Major events like wars, pandemics, natural disasters, or geopolitical
Global Events tensions can disrupt the global economy and have a significant impact on a
nation's economic growth
Technological innovations and disruptions can lead to changes in
Technological productivity and competitiveness, affecting the business cycle. For example,
Advancements the rapid adoption of automation and artificial intelligence can lead to
economic shifts.
Stock market crashes, banking crises, and changes in lending practices can
Financial Markets influence the business cycle. Financial market volatility can lead to
economic downturns.

Internal Causes:

Confidence in the economy plays a crucial role in the business cycle. When
Consumer and consumers and businesses are optimistic, they tend to spend and invest
Business Confidence more, driving economic growth. Conversely, a lack of confidence can lead to
reduced spending and economic slowdowns.
Central banks' decisions regarding interest rates, money supply, and credit
Monetary Policy availability can impact economic cycles. Lower interest rates, for example,
can stimulate borrowing and spending, leading to economic expansion.
Government policies related to taxation, spending, and budget deficits can
Fiscal Policy influence the business cycle. Expansionary fiscal policies, such as tax cuts or
increased government spending, can boost economic growth.
Disruptions in the supply of goods or services, such as natural disasters or
Supply Shocks geopolitical events, can lead to supply shocks that impact production and
prices. These shocks can result in economic fluctuations.
Changes in the labor market, such as shifts in employment rates, wages, and
Labor Market labor force participation, can affect the business cycle. High unemployment
rates often lead to reduced consumer spending.
Inventory cycles, where businesses increase or decrease their stock of goods,
Inventory Cycles can impact production and economic activity. Businesses adjusting their
inventory levels can influence the business cycle.
Government Changes in government regulations, trade policies, and other economic
Regulations policies can have a significant impact on business cycles.
Unit 24: CORPORATE SOCIAL RESPONSIBILITY (CSR)
What is corporate responsibility?
Corporate responsibility (CR), also known as corporate social responsibility (CSR) or business
sustainability, is about the ethics which drive an organization’s activities and how it operates so that it’s
viable over the long term. These two factors are intrinsically linked because a business that damages the
systems on which it depends will ultimately be unsustainable.
1. Responsibilities of businesses
Environmental responsibility: Corporate social responsibility is rooted in preserving the environment.
A company can pursue environmental stewardship by reducing pollution and emissions in
manufacturing, recycling materials, replenishing natural resources like trees, or creating product lines
consistent with CSR.
Ethical responsibility: Corporate social responsibility includes acting fairly and ethically. Instances of
ethical responsibility include fair treatment of all customers regardless of age, race, culture, or sexual
orientation, favorable pay and benefits for employees, vendor use across demographics, full disclosures,
and transparency for investors.
Philanthropic responsibility: CSR requires a company to contribute to society, whether a company
donates profit to charities, enters into transactions only with suppliers or vendors that align with the
company philanthropically, supports employee philanthropic endeavors, or sponsors fundraising events.
Financial responsibility: A company might make plans to be more environmentally, ethically, and
philanthropically focused, however, it must back these plans through financial investments in programs,
donations, or product research including research and development for products that encourage
sustainability, creating a diverse workforce, or implementing DEI, social awareness, or environmental
initiatives.
2. Illegal acts (non-ethics business practices)
- Fraud - Bribery and Corruption - Price fixing
- Environmental violations - Unfair labor practices - Consumer Deception
- Insider Trading - Conflict of Interest - Data privacy violations
- Antitrust Violations - Counterfeiting - Tax evasion
- Substandard Product Quality - Money laundering

Unit 27: INTERNATIONAL TRADE

1. Theory of free trade
2. Advantages and disadvantages of free trade.