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Entrepreneurial
Economics. If entrepreneurship remains
as important to the economy as
ever, then the continuing failure of mainstream economics
to adequately account for entrepreneurship indicates
that fundamental principles require re-evaluation. Entrepreneurial
Economics is the study of the entrepreneur and entrepreneurship within
the economy. The characteristics of entrepreneurial
economy (regional or national level) are high level
of innovation combined with high level of entrepreneurship
which result in the creation of new ventures as well
as new sectors and industries.
Mainstream
economics does not include entrepreneurship not
because there is no theory or analytical framework
for entrepreneurship. Entrepreneurship does not
belong in mainstream theory; in fact mainstream
theory makes the entrepreneur an invisible man.
The reason for that is that the construct of equilibrium
models, which is central to mainstream economics,
is exactly what by definition excludes entrepreneurship. Joseph
Schumpeter and Israel
Kirzner have argued in their writings, that
entrepreneur does not tolerate equilibrium. According
to Baumol, mainstream theory is not ‘wrong’ by
excluding entrepreneurship it is irrelevant there.
Entrepreneurship
has been perceived as a chaotic,
unpredictable economic process, which cannot
be modeled using the equilibrium based analytical
methods used in mainstream economic theory.
It
seems no longer possible to expect that only theoretical
refinements and extending known principles can provide
for a theory of entrepreneurship. Challenging 'fundamental
principles' like equilibrium models, rational agent,
maximization paradigm, the traditional production function,
by applying insight from other disciplines like theoretical
physics (thermodynamics, entropy)
might be the way forward in the study of entrepreneurial
economics. Coase surveys
the field of economics and believes it has become a "theory-driven" subject
that has moved into a paradigm in which conclusions take
precedence over problems. "If you look at a page of a
scientific journal like Nature," he said, "every few
weeks you have statements such as, 'We’ll have
to think it out again. These results aren’t going
the way we thought they would.' Well, in economics, the
results always go the way we thought they would because
we approach the problems in the same way, only asking
certain questions. Entrepreneurial Economics challenges
fundamental principles, using insights from models and
theories in the natural sciences.
Entrepreneurship is
the practice of starting new organizations,
particularly new businesses generally
in response to identified opportunities. Entrepreneurship
is often a difficult undertaking, as a majority of
new businesses fail. Entrepreneurial activities are
substantially different depending on the type of organization
that is being started. Entrepreneurship ranges in scale
from solo projects (even involving the entrepreneur
only part-time) to major undertakings creating many
job opportunities. Many "high-profile" entrepreneurial
ventures seek venture
capital or angel
funding in order to raise capital to
build the business. Many kinds of organizations now
exist to support would-be entrepreneurs, including
specialized government agencies, business
incubators, science
parks, and some NGOs.
However,
other methods are also used to classify small companies,
such us annual sales (turnover), assets value or net
profit (balance sheet), alone or in a mixed definition.
This criteria is followed by the European Union, for
instance (headcount, turnover and balance sheet totals).
The
smallest businesses, often located in private homes,
are called microbusinesses (term used by international
organizations such as the World
Bank and the International
Finance Corporation) or SoHos.
The term "mom and pop business" is a common colloquial
expression for a single-family operated business with
few (or no) employees other than the owners. When judged
by the number of employees, the American and
the European definitions
are the same: under 10 employees.
The Internet
Economy refers to conducting business through
markets whose infrastructure is based on the Internet
and World-Wide Web. An Internet economy differs from
a traditional economy in a number of ways, including:
communication, market segmentation, distribution
costs, and price.
Ghosh
(1998) states that businesses cannot avoid the Internet
economy. They must recognize and understand that there
are both global opportunities available as well as risks
of not participating. They note that through the Internet,
any participant in a value
chain can usurp the role of any other participant.
In
an early article, Iain
Vallance (1993) sees communication between businesses
and their customers as the key to success in the Internet
economy. This results from integrating networks,
software, and customers. Currie (2000) sees communications
via the Internet as involving virtually no transmission
cost. She also notes that distance has become irrelevant,
and that any amount of content is
instantly available.
Esther
Dyson (1998) suggests that the ready availability
of global information may
make it necessary to artificially segment markets.
In contrast, John
Seely Brown and Paul Dugid (2000) point out that
although the Internet enables exploitation of niche
markets, many examples of success come from large firms
with well-established networks, rather than niche firms.
From
a cost perspective, Nicholas
Negroponte (1996) indicates that although everything
on the Internet appears to be free, even if a rational
economic model were to be implemented, it would likely
still cost only pennies to disseminate a million bits
to a million people. However, Shapiro and Varian (1999)
indicates that information is simply being provided at
its marginal cost of zero.
Mondahl
(1999) notes that price differences based on poor information
or geographic distance will not survive in the Internet
Economy. He also notes that businesses are likely to
adjust their prices more frequently in response to Internet
competition.
An Entrepreneur (a loanword from French introduced,
loved and first defined by the Irish economist Richard
Cantillon) is a person who undertakes and operates
a new enterprise or venture and
assumes some accountability for the inherent risks. Entrepreneurship is
often difficult, as many new ventures fail. In the context
of the creation of for-profit enterprises, entrepreneur
is often synonymous with founder.
Most
commonly, the term entrepreneur applies to someone who
creates system to
offer a product or service in order to obtain certain profit.
Business entrepreneurs often have strong beliefs about
a market opportunity and are willing to accept a high
level of personal, professional or financial risk to
pursue that opportunity.
Business entrepreneurs are viewed as fundamentally important
in the capitalistic society.
Some distinguish business entrepreneurs as either "political
entrepreneurs" or "market entrepreneurs."
Social
Entrepreneurship is
the work of a social entrepreneur. A social
entrepreneur is someone who recognizes a social
problem and uses entrepreneurial
principles to organize, create, and manage
a venture to make social
change. Whereas business
entrepreneurs typically measure performance
in profit and return, social entrepreneurs assess
their success in terms of the impact they have
on society. While social entrepreneurs often work
through nonprofits and citizen groups, many work
in the private and governmental sectors.
President
George W. Bush sits with Bob Johnson, founder and
chairman of the RLJ Companies, and Kathy Boden,
right, president and CEO of Blue House Water Solutions
, during a meeting to discuss the economy with
small business owners and community bankers, Monday,
Oct. 23, 2006 at the Urban Trust Bank in Washington,
D.C. White House photo by Eric Draper
President
George Bush spoke to The Urban League Conference
on Friday, July 23 at the Renaissance Center
in Detroit. Bush emphasized education, home-ownership
and the importance of minority entrepreneurship.
(TONY DING/Daily)
A Family
Business is a company owned,
controlled, and operated by members of one or several families.
Many companies that are now publicly held were founded
as family businesses. Many family businesses have
non-family members as employees, but, particularly
in smaller companies, the top positions are often
allocated to family members.
Family
participation in a business can strengthen the business
because family members are very loyal and dedicated to
the family enterprise. However managing a family business,
and particularly succession planning, can present some
unique problems. Often family interests conflict with
business interests, for example hiring a family member
who is less competent than a non-family member or keeping
an underperforming family member in a position when their
performance is hurting the company. Psychologists are
often consulted to help families successfully manage
issues that affect both the family and the business.
An
example of the conflict that can arise is demonstrated
in a story, about Stew Leonard's Supermarket in Connecticut,
about a family business owner whose son's performance
was deemed unsatisfactory by his supervisor. The father
told the supervisor that he would take care of it. The
father asked his son to come to the family home for a
talk in the hot tub. When they were settled in the tub
the father put on a hat which he said was his 'Boss'
hat and told his son that he was fired. He then removed
that hat and put on another calling it his 'Father' hat.
Then he said: "Son, I'm very sorry to hear that you lost
your job. Is there anything I can do for you?"
Business
Development includes
a number of techniques designed to grow an economicenterprise.
Such techniques include, but are not limited to,
assessments of marketing opportunities
and target
markets, intelligence
gathering on customers and competitors,
generating leads for possible sales,
followup sales activity, formal proposal writing
and business
model design. Business development involves
evaluating a business and then realizing its full
potential, using such tools as marketing, sales,
information management and customer service. For
a sound company able to withstand competitors,
business development never stops but is an ongoing
process.
Successful
business development often requires a multi-disciplinary
approach beyond just "a sale to a customer." A detailed strategy for
growing the business in desirable ways is frequently
necessary, which may involve financial, legal and advertising skills.
Business development cannot be reduced to simple templates applicable
to all or even most situations faced by real-world enterprises. Creativity in
meeting new and unforeseen challenges is necessary to
keep an enterprise on a path of sustainable growth.
Small
to medium-sized companies often do not establish
procedures for business development, instead relying
on their existing contacts. Other times they assume
that because they know people in high places that their
business development problems are solved and that somehow
new business will come to them. The ramifications of
such thinking can be significant in the event they
are unable to leverage those relationships, which very
often are personal or weak. Then they will have no
new business in the pipeline.
The
pipeline refers to flow of potential clients whom
the company is in the process of developing. Each potential
client in the pipeline is given a percent chance of success
with projected sales volumes attached. The weighted average
of all the potential clients in the pipeline can be used
for staffing to
manage the new business when it comes in.
For
larger and more well-established companies, especially
in technology-related industries, business development
often refers to creating and managing strategic relationships
and alliances with other, "third party" companies. In
these instances the companies will leverage one anothers' expertise, technologies or
other intellectual
property to expand their products, services, functionality
and/or market reach without having to invest in building
or acquiring these with internal resources. Revenues
are typically shared in some sort of royalty arrangement.
For example, a company with a successful technology will
partner with a company that has an existing customer
base and sales force, and together they will penetrate
that market, sharing the proceeds.
In
addition to their location, home businesses are usually
defined by:
Having
a very small number of employees,
usually all immediate family of
the business owner, in which case it is also
a family
business.
Lacking
a shop frontage, customer parking and street advertising signs.
"Home-based" often
evokes strong feelings and concerns about the
serious matter of this business, yet the contrary
seems to be more true: home businesses use the
advantage of running on less expenses (e.g. house
rent, commuting mileage) and grow over time and/or
by demand.
Product
Innovation -
Comes from the Greek word Productionia Innovationia;
Productie - "Produce" + Innovatie - "Make"
The
process of product innovation involves the introduction
of a good or service that is new or substantially
improved. This include, but are not limited to,
improvements in functional characteristics, technical
abilities, or ease of use.
In business and engineering, New
Product Development (NPD) is the term used
to describe the complete process of
bringing a new product or
service to market. There are two parallel paths involved
in the NPD process : one involves the idea generation,
product design, and detail engineering ; the
other involves market research and marketing
analysis. Companies typically see new product
development as the first stage in generating and
commercializing new products within the overall strategic
process of product
life cycle management used to maintain or grow
their market share.
A Business
Environment is the social, technological,
economic and political environment in which a business
functions. The business environment affects organizational
decisions, strategies, processes and performance.
The adjective "Global" and
the adverb "globally" are
synonyms of worldwide and mean of or relating
to or involving the entire world in
the general sense or as the planet Earth.
They are sometimes used as synonyms for international/internationally but
this usage is not recorded in dictionaries and is usually
considered incorrect:
"Global" implicitly
implies the concept of "one
world"
International
is a broader term, in that it can refer to something
involving all nations or as few as only two nations,
but, presumably, all must be potentially involved before
it becomes truly global.
Nations are
concerned primarily with humanity's
concerns, and that usually in a narrow time frame,
whereas there are many global concerns that transcend
species or generations.
Nonetheless, "global" has
passed into common usage, especially in the media, academia,
and the business world,
and among left-wing supporters of a "one world" concept.
Many use this term in situations where "international" would
clearly be the more appropriate term, as there are few
things that are truly global (even the much-touted "global
economy" for example does not include Antarctica, North
Korea, etc.). Nevertheless, just as its synonym "worldwide", "global" is
often appropriate when one wants to emphasise that something
affects the entire world even if not all nations or all
parts of the earth are directly included. For example,
Antarctica and North Korea and even isolated jungle tribes
are very strongly affected by the global economy even
if they do not actively participate in global trade.
The
usage of "global" is correct when referring to things
which do involve the Planet
Earth as one single unit, for example: global maps,
global weather patterns, global satellite photos.
A Feasibility
Study is a preliminary study undertaken to
determine and document a project's viability. The
results of this study are used to make a decision
whether to proceed with the project, or table it.
If it indeed leads to a project being approved, it
will - before the real work of the proposed project starts
- be used to ascertain the likelihood of the project's
success. It is an analysis of possible alternative
solutions to a problem and
a recommendation on the best alternative.
It, for example, can decide whether an order processing
be carried out by a new system more efficiently than
the previous one.
Market
Analysis plays a
major part in a firm's planning activities. It
guides decisions on: inventory,
purchase, work
force expansion/contraction, facility expansion,
purchases of capital equipment, promotional activities,
and many other aspects of a company.
Forecasts in these areas must be accurate and decision
makers must understand how they were derived.
Not
all managers are
asked to conduct a market analysis, but all managers
must make decisions using market analysis data and understand
how the data was derived. So all managers need a reasonable
understanding of the tools most used for making sales
forecasts and analyzing markets.
To
understand a market analysis, managers need a basic understanding
of statistics and
some knowledge of computers.
A
large number of market analysis techniques are related
to sales forecasting, others are more general techniques
for analyzing markets. The literature defines several
areas in which market analysis is important. These include:
sales forecasting, market
research, and marketing strategy. Sales forecasting
and market analysis are complementary skills that any
marketing manager should possess.
Research
is the search for and retrieval of existing, discovery
or creation of new information or knowledge for
a specific purpose. Research has many categories,
from medical research to literary research. Marketing
Research is a form of business
research. and Business-to-Business
(B2B) Marketing Research, or Business Marketing
Research, previously known as Industrial Marketing
Research.
B2B
Marketing Research investigates the markets for
products sold by one business to another, rather
than to consumers.
Consumer
Marketing Research is a form of applied sociology which
concentrates on understanding the behaviours, whims
and preferences, of consumers in
a market-based
economy. The field of consumer marketing research
as a statistical science was pioneered by Arthur
Nielsen with the founding of the ACNielsen Company
in 1923.
In
addition to marketing research, other forms of
business research include:
Market
research is broader in scope and
examines all aspects of a business environment.
It asks questions about competitors, market
structure, government regulations,
economic trends, technological advances,
and numerous other factors that make up
the business environment. (See Environmental
scanning.) Sometimes the term refers
more particularly to the financial analysis
of companies, industries,
or sectors.
In this case, financial analysts usually
carry out the research and provide the
results to investment advisors and potential
investors.
Product
research - This looks at what products can
be produced with available technology, and
what new product innovations near-future
technology can develop. (see New
Product Development)
Advertising
research - is a specialized form
of marketing
research conducted to improve the efficacy
of advertising. copy
testing, also known as pre-testing,
is a form of customized research that predicts
in-market performance of an ad before it
airs by analyzing audience levels of attention, brand
linkage,motivation,
entertainment, and communication, as well
as breaking down the ad’s Flow
of Attention and Flow
of Emotion . Pre-testing is also used
on ads still in rough (ripomatic or animatic)
form. (Young, p213)
Equity
Investment generally
refers to the buying and holding of shares of stock on
a stock
market by individuals and funds in anticipation
of income from dividends and capital
gain as the value of the stock rises. It also
sometimes refers to the acquisition of equity (ownership)
participation in a private (unlisted) company or
a startup (a company being created or newly created).
When the investment is in infant companies, it
is referred to as venture capital investing and
is generally understood to be higher risk than
investment in listed going-concern situations.
A Takeover in business refers
to one company (the acquirer,
or bidder) purchasing another (the target).
In the UK the term properly refers to the acquisition
of a public company whose shares are listed on a stock
exchange, in contrast to the acquisition of
a private
company.
The
phrase Mergers
and Acquisitions (abbreviated M&A)
refers to the aspect of corporate strategy, corporate
finance and management dealing
with the buying, selling and combining of different companies.
A Leveraged
Buyout (or LBO,
or highly-leveraged transaction (HLT), or "bootstrap" transaction)
occurs when a financial
sponsor gains control of a majority of a target
company's equity through
the use of borrowed money or debt.
A
leveraged buyout is a strategy involving the acquisition
of another company using a significant amount of
borrowed money (bonds or loans) to meet the cost
of acquisition. Often, the assets of the company
being acquired are used as collateral for the loans,
in addition to the assets of the acquiring company.
The purpose of leveraged buyouts is to allow companies
to make large acquisitions without having to commit
a lot of capital. In a LBO, there is usually a
ratio of 70% debt to 30% equity, although debt
can reach as high as 90% to 95% of the target company's
total capitalization. The equity component of the
purchase price is typically provided by a pool
of private
equity capital.
Typically,
the loan capital is borrowed through a combination
of prepayable bank facilities and/or public or privately
placed bonds, which may be classified as high-yield
debt, also called junk bonds.
Often, the debt will appear on the acquired company's
balance sheet and the acquired company's free
cash flow will be used to repay the debt.
Franchising (from
the French for honesty or freedom[1])
is a method of doing business wherein a franchisor licenses trademarks and
tried and proven methods of doing business to a franchisee in
exchange for a recurring payment, and usually a percentage
piece of gross sales or gross
profits as well as the annual fees. Various tangibles
and intangibles such as national or international advertising, training,
and other support services are commonly made available
by the franchisor, and may indeed be required by the
franchisor, which generally requires auditedbooks,
and may subject the franchisee or the outlet to periodic
and surprise spot checks. Failure of such tests typically
involve non-renewal or cancellation of franchise rights.
A
business operated under a franchise arrangement is often
called a chain
store, franchise outlet, or simply franchise.
According
to Financial
Times, if sales by US franchise businesses were translated
into national product, they would qualify as the 7th
largest economy in the world.
A
business plan is a formal statement of a set of business
goals, the reasons why they are believed attainable,
and the plan for reaching those goals. It may also contain
background information about the organization or team
attempting to reach those goals.
The
business goals being attempted may be for-profit or non-profit.
For-profit business plans typically focus on financial
goals. Non-profit and government agency business plans
tend to focus on service goals.
Business
plans may also target changes in perception and branding
by the customer, client, tax-payer, or larger community.
A business plan that has changes in perception and branding
as its primary goals is called a marketing
plan.
Business
plans may also be internally or externally focused. Externally
focused plans target goals that are important to external stakeholders,
particularly financial stakeholders. They typically have
detailed information about the organization or team attempting
to reach the goals. In the case of for-profit entities,
external stakeholders would include investors and customers.[1]
External
stake-holders of non-profits include donors and
the clients of the non-profit's services.[2]
In
the case of government agencies, external stakeholders
would include tax-payers, higher-level government agencies,
and international lending bodies such as the IMF, the
world bank, various economic agencies of the UN,
and development
banks.
Internally
focused business plans target intermediate goals required
to reach the external goals. They may cover the development
of a new product, a new service, a new IT system, a restructuring
of finance, the refurbishing of a factory or a restructuring
of the organization.
An
internal business plan will often be developed in conjunction
with a balanced
scorecard or a list of critical
success factors. This allows success of the plan
to be measured using non-financial measures. Business
plans that identify and target internal goals, but provide
only general guidance on how they will be met are called strategic
plans.
Operational
plans describe the goals of an internal organization,
working group or department.[3]Project
plans, sometimes known as project frameworks,
describe the goals of a particular project. They may
also address the project's place within the organization's
larger strategic goals.[4][5]
A
marketing plan is a written document that details the
actions necessary to achieve a specified marketing objective(s).
It can be for a product or service,
a brand,
or a product
line. It can cover one year (referred to as an annual
marketing plan), or cover up to 5 (sometimes referred
to as five) years.
A
marketing plan may be part of an overall business
plan. Solid marketing
strategy is the foundation of a well-written marketing
plan. While a marketing plan contains a list of actions,
a marketing plan without a sound strategic foundation
is of little use.
Management comprises
directing and controlling a group of one or more people
or entities for the purpose of coordinating and harmonizing
that group towards accomplishing a goal. Management
often encompasses the deployment and manipulation of human
resources, financial resources, technological resources,
and natural
resources. Management can also refer to
the person or people who perform the act(s) of management.
The
verb manage comes from the Italianmaneggiare (to
handle — especially a horse), which in turn
derives from the Latinmanus (hand).
The French word mesnagement (later ménagement)
influenced the development in meaning of the English
word management in the 17th and 18th centuries.[1]
Human
resources has
at least two meanings depending on context. The
original usage derives from political
economy and economics,
where it was traditionally called labor,
one of three factors
of production. The more common usage within corporations and businesses refers
to the individuals within the firm, and to the
portion of the firm's organization that deals with
hiring, firing, training, and other personnel issues.
This article addresses both definitions.
It
is the responsibility of human resource managers
to conduct these activities in an effective, legal,
fair, and consistent manner.
The
objective of Human Resources (HR's raison d'etre) is to
maximize the return on investment from the organization's
human capital
"Human
resource management aims to improve the productive contribution
of individuals while simultaneously attempting to attain
other societal and individual employee objectives." Schwind,
Das & Wagar (2005)
In
reality, human resources deals with two different worlds
1) Non-Unionized - Where management has the control, and
2) Unionized - Where there is shared control through a
collective agreement - Management and a union negotiate
a collective agreement with respect to terms and conditions
of employment. The Union represents employees to management.
(That is the Union speaks for employees, both collectively
and individually)
Collective
Agreements - Can cover any and all terms and conditions
of employment. Collective agreements become "the Bible," the
code and are binding in law. - Disputes of the collective
agreement are resolved by arbitration.
Venture
capital is a type of private
equity capital typically provided by professional,
institutionally-backed outside investors to new,
growth businesses. Generally made as cash in exchange
for shares in the investee company, venture capital
investments are usually high risk, but offer the
potential for above-average returns. A venture
capitalist (VC) is a person who makes such
investments. A venture capital fund is a pooled
investment vehicle (often a partnership)
that primarily invests the financial
capital of third-party investors in enterprises
that are too risky for the standard capital
markets or bankloans
Financial
Statements (or financial
reports) are formal records of a business' financial
activities. These statements provide an overview
of a business' profitability and financial condition
in both short and long term. There are four basic
financial statements:
1. Balance
Sheet - also referred to as statement of
financial condition, reports on a company's assets,
liabilities and net equity as of a given point in
time.
2. Income
Statement - also referred to as Profit or loss
statement, reports on a company's results of operations
over a period of time.
3. Cash
Flow Statement - reports on a company's cash
flow activities, particularly its operating, investing
and financing activities.
4. Statement
of Retained Earnings - explains the changes in
a company's retained earnings over the reporting period.
Because
these statements are often complex, an extensive set
of Notes
to the Financial Statements and management discussion
and analysis is usually included. The notes will typically
describe each item on the Balance
sheet, Income
statement and Cash
flow statement in further details. Notes to Financial
Statements are considered an integral part of the Financial
Statements.
Cash
Flow is an accounting
term that refers to the amounts of cash being
received and spent by a business during a defined
period of time, sometimes tied to a specific project.
Measurement of cash flow can be used
to
evaluate the state or performance of a business
or project.
to
determine problems with liquidity. Being profitable
does not necessarily mean being liquid. A company
can fail because of a shortage of cash, even while
profitable.
to
examine income or growth of a business when is
believed that accrual accounting concepts do not
represent economic realities. Alternately, cash
flow can be used to 'validate' the net income generated
by accrual accounting.
Cash
flow as a generic term may be used differently
depending on context, and certain cash flow definitions
may be adapted by analysts and users for their
own uses. Common terms (with relatively standardized
definitions) include operating
cash flow and free
cash flow.
Budget (from Frenchbougette)
generally refers to a list of all planned expenses
and revenues. A budget is an important concept in microeconomics,
which uses a budget
line to illustrate the trade-offs between two or
more goods.
Forecasting is
the process of estimation in
unknown situations. Prediction is
a similar, but more general term, and usually refers
to estimation of time
series, cross-sectional or longitudinal data.
In more recent years, Forecasting has evolved into
the practice of Demand Planning in every day business
forecasting for manufacturing companies. The discipline
of demand planning, also sometimes referred to as supply
chain forecasting, embraces both statistical forecasting
and consensus process...
Forecasting
is commonly used in discussion of time-series data.
The
Institute of Business Forecasting (IBF) is recognized
worldwide as the premier provider of forecasting
and planning education, training, and certification.
This global organization’s membership includes
many of the world’s largest and renowned
companies; also, it is known for its flagship
publication, the Journal of Business Forecasting
(JBF). The IBF has helped organizations improve
forecasting accuracy and overall performance
for over 25 years. For more information, visit
www.ibf.org
Commercial
law or business law is the body
of law which
governs business and commerce and
is often considered to be a branch of civil
law and deals both with issues of private
law and public
law. Commercial law regulates corporatecontracts, hiring
practices, and the manufacture and sales of consumergoods.
Many countries have adopted civil
codes which contain comprehensive statements of
their commercial law. In the United States, commercial
law is the province of both the Congress under
its power to regulate interstate commerce, and the
states under their police power. Efforts have been
made to create a unified body of commercial law in
the US: the most successful of these attempts has resulted
in the general adoption of the Uniform
Commercial Code.
Various
regulatory schemes control how commerce is conducted,
privacy laws, safety laws (i.e. the Occupational
Safety and Health Act in the United States) food
and drug laws are some examples.
Insurance,
in law and economics,
is a form of risk
management primarily used to hedge against
the risk of
a contingent loss. Insurance is defined as the equitable
transfer of the risk of a potential loss, from one entity
to another, in exchange for a premium. Insurer,
in economics, is the company that sells the insurance. Insurance
rate is a factor used to determine the amount, called
the premium, to be charged for a certain amount
of insurance coverage. Risk
management, the practice of appraising and controlling
risk, has evolved as a discrete field of study and practice.
A
supply chain, logistics network,
or supply network is a coordinated system of organizations,
people, activities, information and resources involved
in moving a product or service in physical or virtual manner
from supplier to customer.
Supply chain activities (aka value
chains or life
cycle processes) transform raw
materials and components into a finished product
that is delivered to the end customer. Supply chains
link value chains.[1]
Today,
the ever increasing technical complexity of standard
consumer goods, combined with the ever increasing size
and depth of the global market has meant that the link
between consumer and vendor is usually only the final
link in a long and complex chain or network of exchanges.
This
supply chain begins with the extraction of raw material
and includes several production links, for instance;
component construction, assembly and merging before moving
onto several layers of storage facilities of ever decreasing
size and ever more remote geographical locations, and
finally reaching the consumer.
Although
many companies and corporations today are of importance
not just on national or regional but also on global scale,
none are of a size that enables them to control the entire
supply chain, since no existing company controls every
link from raw material extraction to consumer.
Many
of the exchanges encountered in the supply chain will
therefore be between different companies who will all
generally seek to maximize company revenue within their
sphere of interest but will have little or no basic knowledge
or interest in the remaining players in the supply chain
except those to which it is directly linked.
There
are a variety of supply chain models, which address both
the upstream and downstream sides.
The SCOR
(Supply Chain Operations Reference) model, developed
by the Supply Chain Council measures total supply chain
performance. It is a process reference model for supply-chain
management, spanning from the supplier's supplier to
the customer's customer.[2].
It includes delivery and order fulfillment performance,
production flexibility, warranty and returns processing
costs, inventory and asset turns, and other factors
in evaluating the overall effective performance of
a supply chain.
The Global
Supply Chain Forum (GSCF) introduced another Supply
Chain Model. This framework [3] is
built on eight key business processes that are both
cross-functional and cross-firm in nature. Each process
is managed by a cross-functional team, including representatives
from logistics, production, purchasing, finance, marketing
and research and development. While each process will
interface with key customers and suppliers, the customer
relationship management and supplier relationship management
processes form the critical linkages in the supply
chain.
In business, Enterprise
Risk Management (ERM) are the methods and processes
used to manage those risks, possible events or circumstances
that can have influence on the enterprise in question.
By identifying and proactively treating such potential
effects, one protects the very existence, the resources
(human and capital), the products and services, or
the customers of the enterprise, as well as external
effects on society, markets or the environment.
Ford
Motor Company is
an Americanmultinational
corporation and the world's third
largest automaker after Toyota and General
Motors, based on worldwide vehicle sales.
In 2006, Ford was the second-ranked automaker
in the US with a 17.5% market share, behind General
Motors (24.6%) but ahead of Toyota (15.4%) and DaimlerChrysler (14.4%)[3].
Ford was also seventh-ranked American-based company
in the 2007 Fortune
500 list, based on global revenues of $160.1
billion [4].
In 2006, Ford produced about 6.6 million automobiles[5],
and employed about 280,000 employees at about
100 plants and facilities worldwide[6].
Based
in Dearborn,
Michigan, a suburb of Detroit,
the automaker was founded by Henry
Ford and incorporated in June 16, 1903. Ford now
encompasses many global brands, including Lincoln and Mercury of
the US, Jaguar and Land
Rover of the UK,
and Volvo of
Sweden. Ford also owns a one-third controlling interest
in Mazda.
Ford
has been one of the world's ten
largest corporations by revenue and in 1999 ranked
as one of the world's most profitable corporations,
and the number two automaker worldwide. Since 2000,
Ford has not fared as well, having steadily lost market
share in the U.S. since 1995[7].
Ford
introduced methods for large-scale manufacturing of
cars and large-scale management of an industrial workforce,
especially elaborately engineered manufacturing sequences
typified by moving assembly
lines. Henry
Ford's combination of highly efficient factories,
highly paid workers, and low prices revolutionized
manufacturing and came to be known around the world
as Fordism by 1914.
Tetra
Pak's first product was a papercarton used
for storing and transporting milk.
The first product was called Tetra Classic. Rausing
had been working on the design since 1943,
and by 1950 had
perfected techniques for making his cartons fully airtight,
using a system of plastic coated
paperboard. These initial cartons were tetrahedrons having
4 sides, leading to the company's name, which means "four" in Greek.
In 1952 The
first Tetra Classic package was launched, and later
in 1963 the
company introduced Tetra Brik, a rectangular
carton.
Ruben
Rausing's son Hans
Rausing ran Tetra Pak from 1954 until 1985,
taking the company from a seven-person concern to one
of Sweden's largest corporations. Before his death
in 1983,
Ruben Rausing was Sweden's richest person.
Wal-Mart
Stores, Inc. (NYSE: WMT)
is an Americanpublic
corporation, currently the world's largest
retailer and largest corporation. It was founded
by Sam
Walton in 1962, incorporated on October
31, 1969,
and listed on the New
York Stock Exchange in 1972. It is the largest
private employer in the United
States (US) and Mexico.
Wal-Mart is the largest grocery retailer
in the United States, with an estimated 20% of
the retail grocery and consumables business,
and the largest toy seller in the United States,
with an estimated 45% of the retail toy business,
having surpassed Toys "R" Us in
the late 1990s.
Wal-Mart
has been the target of much criticism for
its policies and business practices by several community
groups, women's
rights groups, grassroots organizations, labor
unions, religious organizations, and environmental
groups. Specific concerns include the corporation's
extensive foreign product sourcing, treatment of employees
and suppliers, low wages, resistance to union representation,
insurance benefits, sexism, child labor, environmental
practices, the
use of public subsidies, and the economic impact
of stores on the communities where they operate.
