Bus 103 STUDY PACK ON BUSINESS ADMINISTRATION INTERMEDIATE I

CHAPTER ONE: NATURE OF BUSINESS

1.0 Learning Objectives 1

1.1 Introduction 1

1.2 Definition 1

1.3 Why the need of Business 2

1.4 Classification of Business Activities 3

1.5 Industry and its Types 3

1.6 Commerce 5

1.7 Trade 5

1.8 Auxiliaries to Trade 6

1.9 Classification of business based on activity 7

1.10 Classification of business based on mode of ownership 8

1.11 Characteristics of Business 9

1.12 Business and Society 12

1.13 Business and the Law 13

1.14 Summary 13

1.15 Review Questions 14

1.16 References 15

CHAPTER TWO: EVOLUTION OF BUSINESS

2.0 Learning Objectives 16

2.1 Introduction 16

2.2 The Development of Commerce 16

2.3 Evolution of Industry 17

2.4 The Industrial Revolution 18

2.4.1 Industrial Revolution Elements 19

2.5 Factors that Facilitated Industrial Revolution in England 20

2.6 Consequences of the Industrial Revolution 21

2.7 The Impact of Industrial Revolution on Business Management 22

2.8 Summary 22

2.9 Review Questions 23

2.10 References 23

CHAPTER THREE: THE ENVIRONMENT OF BUSINESS

3.0 Learning Objectives 24

3.1 Introduction 24

3.2 Business and its environment 25

3.3 Summary 34

3.4 Review Questions 35

3.5 References 35

CHAPTER FOUR: ORGANIC BUSINESS FUNCTIONS

4.0 Learning Objectives 36

4.1 Introduction 36

4.2 The Production Function 37

4.2.1 Introduction 37

4.2.2 Meaning of Production 37

4.2.3 Production Management 37

4.2.4 Functions and Scope of Production Management 37

4.2.5 Types of Production System 40

4.2.6 Production Process 43

4.2.7 Plant Layout 44

4.2.8 Problems of Production Functions in Nigeria 45

4.2.9 Solutions to Production Function Problems in Nigeria 45

4.3 The Finance Function 46

4.3.1 Introduction 46

4.3.2 Definition of Finance 46

4.3.3 The Main Components of Finance Functions 46

4.3.4 Functions of Financial Manager 47

4.3.5 The Three Core Decision Areas in Financial Management 48

4.3.6 Sources of Business Financing 48

4.3.7 Capitalization 51

4.3.8 Factors affecting Company’s choice of finance 52

4.4 The Personnel Function 53

4.4.1 Introduction 53

4.4.2 Definition of Personnel Management 53

4.4.3 The Role of Personnel/Human Resources Department 54

4.4.4 Personnel Policy 55

4.4.5 The Scope of Personnel Management 57

4.5 The Marketing Function 72

4.5.1 Definition of Marketing 72

4.5.2 Functions of Marketing 73

4.5.3 Distinctions between Marketing and Selling 75

4.5.4 Importance of Marketing to Society 75

4.5.5 Marketing Concept 75

4.5.6 The Marketing Mix 77

4.5.7 Marketing Research 85

4.6 Summary 86

4.7 Review Questions 87

4.8 References 88

CHAPTER FIVE: BUSINESS ANALYSIS AND EVALUATION TOOLS

5.0 Learning Objectives 89

5.1 Introduction 89

5.2 SWOT Analysis 89

5.3 PEST Analysis 93

5.4 Financial Analysis 97

5.5 Summary 100

5.6 Review Questions 101

5.7 References 100

CHAPTER SIX: THE LEGAL FORMS OF BUSINESS OWNERSHIP

6.0 Learning Objectives 102

6.1 Introduction 102

6.2 Classification of Business organizations according to Ownership 102

6.3 Determinants of choice of forms of business ownership 103

6.4 Basic forms of business ownership 103

6.4.1 The Sole Proprietorship 104

6.4.2 Partnership 106

6.4.3 Limited Liability Company 110

6.4.4 Public Corporations 113

6.4.5 Co-operative Societies 116

6.4.6 Franchises 121

6.5 Summary 121

6.6 Review Questions 122

6.7 References 123

CHAPTER SEVEN: FORMS OF BUSINESS COMBINATIONS

7.0 Learning Objectives 124

7.1 Introduction 144

7.2 Concept of Business Combinations 124

7.3 Types of Business Combinations 126

7.4 Definition of Merger 131

7.5 Acquisition 133

7.6 Integration 135

7.7 Consolidation 138

7.8 Absorption 138

8.8 Takeover 139

7.10 Conglomerate 143

7.11 Summary 145

7.12 Review Questions 147

7.13 References 148

CHAPTER EIGHT: DOCUMENTS USED BY BUSINESS ORGANIZATIONS

8.0 Learning Objectives 149

8.1 Introduction 149

8.2 Memorandum of Association 149

8.3 Articles of Association 150

8.4 The Prospectus 150

8.5 Certificate of Incorporation 150

8.6 Certificate of Trading 150

8.7 Minutes of Meeting 151

8.8 Schedule Of Non-Current Assets 152

8.9 Schedule of Directors 152

8.10 Schedule of Shareholders 161

8.11 Vision 164

8.12 Mission 165

8.13 Goals and Objectives 166

8.14 Strategy 167

8.15 Policy 168

8.16 Summary 168

8.17 Review Questions 169

8.18 References 169

CHAPTER NINE: SCALE OPERATION AND ECONOMIES OF SCALE

9.0 Learning Objectives 170

9.1 Introduction 170

9.2 Economies Of Scale 170

9.3 Simplifying Economies Of Scale 172

9.4 Measurement of Size of Business 173

9.5 Determining the Size of the Firm: Main Factors Responsible 174

9.6 Capitalism (Economy System) 176

9.7 Socialism (economic system) 179

9.8 Mixed economy 185

9.9 Market Structures 191

9.10 Concept of Perfect Competition 192

9.11 Theory of Monopoly 195

9.12 Theory of Monopolistic Competition 197

9.13 The Theory of Oligopoly 198

9.14 Summary 201

9.15 Review Questions 203

9.16 References 203

CHAPTER TEN: GOVERNMENT AND BUSINESS IN NIGERIA

10.0 Learning Objectives 204

10.1 Introduction 204

10.2 Objectives of Government Regulation of Business 204

10.3 Reasons for Government Control of Business 205

10.4 Why Government Participates in Business 206

10.5 The Role of Government in Business 206

10.6 Specific ways Government in Nigeria has aided Business Development 208

10.7 Roles of Government Agencies in the Regulation and Control of Business 209

10.8 Summary 218

10.9 Reviews Questions 218

10.10 References 219

CHAPTER ELEVEN: INTERNATIONAL BUSINESS ADMINISTRATION

11.0 Learning Objectives 220

11.1 Introduction 220

11.2 Meaning of International Business 220

11.3 Legal Systems 221

11.4 Political Systems 222

11.5 Political Environment in International Business 226

11.6 Economic System 228

11.7 Foreign Exchange Market 228

11.8 Foreign Direct Investment 231

11.9 Tariffs 236

11.10 Exporting and Importing Regulations and Documentations 237

11.11 International Trade 245

11.12 Classical Theories of International Trade 247

11.13 Modern Theory of International Trade 249

11.14 New Theories of International Trade 250

11.15 Summary 256

11.16 Review Questions 257

11.17 References 258

CHAPTER TWELVE: NIGERIAN BUSINESS REGULATORY, STATUTORY, PROFESSIONAL AND LEGAL FRAMEWORKS.

12.0 Learning Objectives 260

12.1 Introduction 260

12.2 Companies and Allied Matters Act (CAMA) 1990 260

12.3 Financial Reporting Council of Nigeria 261

12.4 The Customs Duties (Dumped and Subsidized Goods) Act of 1958 263

12.5 Customs Duties (Drawback) Regulation Act of 1959 263

12.6 Food and Drugs Act of 1974 263

12.7 Labour Laws 263

12.8 Nigeria Enterprises Promotion Act 264

12.9 Price Control Act 1970 264

12.10 Workmen’s Compensation Act 265

12.11 The Factories Act of 1987 265

12.12 Summary 266

12.13 Review Questions 267

12.14 References 267

CHAPTER THIRTEEN: BUSINESS SOCIAL RESPONSIBILITY

13.0 Learning Objectives 268

13.1 Introduction 268

13.2 Dimensions of corporate social responsibility 269

13.3 Arguments in Favour and Against Corporate Social Responsibility 274

(CSR) Management

13.4 The Stakeholder Concept 278

13.5 Summary 282

13.6 Review Questions 282

13.7 References 283

CHAPTER FOURTEEN: THE PROBLEMS OF BUSINESS ADMINISTRATION IN NIGERIA

14.0 Learning Objectives 284

14.1 Introduction 284

14.2 Requirements for Business Survival 284

14.3 Causes of Business Failure 285

14.4 Symptoms of Business Failure 286

14.5 Remedies/Survival Strategies 287

14.6 Summary 288

14.7 Review Questions 289

14.8 References 289

CHAPTER FIFTEEN: ETHICAL ISSUES IN BUSINESS ADMINISTRATION

15.0 Learning Objectives 290

15.1 Introduction 290

15.2 Why Some Managers Behave Unethically 292

15.3 Five Basic Approaches to Ethical Decision-Making 293

15.4 Mechanisms for Managing Ethics in Business 297

15.5 Moral 299

15.6 Integrity 304

15.7 Ethical Behaviours 312

15.8 The “Why” Behind Understanding Ethical Behavior 312

15.9 Predicting Unethical Behavior: The Antecedents 314

15.10 Summary 315

15.11 Review Questions 316

15.12 References 316

CHAPTER SIXTEEN: INFLUENCE OF GLOBALIZATION ON BUSINESS

ORGANISATION

16.0 Learning Objectives 317

16.1 Introduction 317

16.2 Globalisation Defined 317

16.3 Factors Responsible for Globalisation 318

16.4 Benefits/Consequences of Globalisation 319

16.5 Disadvantages/Challenges of Globalisation 320

16.6 Effects of Globalisation 321

16.7 Policy reference to the effect of Globalization 322

16.8 Skills Required of the Global managers 323

16.9 Summary 324

16.10 Review Questions 325

16.11 References 325