Industrial Organization and

Management
(IOM)

SUBMITTED BY.
KRYSSMARK A. FRANCISCO BSMT III

SUBMITTED TO.
MA ROSARIO INFANTE
 MODULE 4: Industrial Risk and Forecasting

Activity: “Spot the hazard”

Instruction: Look at figure 1. Explain what each of the employees are doing. Write your answer below
the picture.

1.smoking even it is not allowed to smoke on that area.

2. No Safety hat
3. Slippery floors
4.The Fire exit was block with the boxes were to scape if there is a incase of emergency
Analysis:
From your answer on the activity, do you think these acts are unsafe? Explain your answer
briefly.

- those acts are unsafe because they are not following the standards safeguarding health,
safety, and morals and it’s risky for the workers because of how they working without following
the rules of safety and not taking care of their self and it is also the responsibilities of company
to check their working and make them to follow the standards safeguarding health safety
rules..

Application 1:
Instruction: Read the paragraph and answer the questions that
follow.

“The Case of the Miniature Recorder”

Jo Burban, an electronic Engineer, developed a miniature recording device in his home

workshop. He conceives the instrument to be useful for dictation, in business and library
research, recording conversations, and similar uses. His finished pilot model is partly an
assembly job of standard components available in the open market and partly his own work
and improvements. It is his idea to set up his own enterprise to produce and market the
instrument.

Questions:

1. Outline at least six steps Burbon should take before commencing the enterprise or
seeking finances for it.
1.1. Conduct market research about his development and business to lunch also the nature
of business.
1.2. Writeabusinessplanwhichisthefoundationofhisbusinessbeforeitwillstart.
1.3. Choose the appropriate business structure that he would construct for his business.
1.4. decide a good business name's logo and create information for about Possible business.
1.5. Search and pick a proper and good location for he would build his business structure.
2. If you were Burbon how would you go about launching this enterprise?
If I will be burbon I would Conduct market research. Market research will tell you if there's an
opportunity to turn your idea into a successful business, then Write your business plan, pick
your business location, choose a business structure and Choose your business name

Application 2:
How well did you understand what you read? Answer the question briefly.
1. Is relating the product to the enterprise important? Explain your answer.

 Yes this is important From the study of the product and from market studies, it
will be wise to reexamine the relation of the product to the enterprise if risks are
to be avoided or minimized. Important decisions will hinge upon whether the
product is to be launched along with the new enterprise, or whether it is a new
product of an establish company. Of like importance is the question whether the
company is to be based upon the single product, a line of related products, or
several diversified products

2. Differentiate the following: Seasonal variations, longtime trends, business cycle.

Seasonal variations
 This is due to weather or customs and traditions. Businessmen have already
learned much in a way of adapting their operations to this predictable changes.
They know how to translate Easter, vacation
Long time trends
 Indicate structural changes in the economic occurring in a slow, cumulative way
they come about through changes in production ability social institutions, and
individual habits, and usually manifest themselves in industrial growth and
decadence. Obviously, this involves many elements such as population trends,
technological developments, condition and use of natural resources, long-time
stages or type of economic growth, changes in social institution and customs
and in individual habits. Forecaster study this long-time trends. When possible,
they project them into the future and interpret their significance in economic
affairs.
 Example: the rail transportation as affected by automobiles, airplanes and
pipelines
textile industry as affected by imported fabrics
Business Cycles
In duration, the business cycle covers a time period longer that seasonal fluctuations and much
shorter than long time trends. Many seasonal fluctuations take place within a business cycle,
and many business cycles occur in the progress of a long- time trend. The business cycle is
made up of recurrent fluctuations revolving around a state of balance. These fluctuations make
up of a pattern according to which business activity experiences an upswing, carrying it far
above balance to what may be termed overproduction”.

Application 3:

Instruction: Discuss why understanding each of the specific risks is important in avoiding risks in
an enterprise.

-need to understand each of the specific risks is important in avoiding risks in an

enterprise because it is all related to the enterprise just like, launching an enterprise or a
new product, there are many other risks and there is following categories indicate some
of these risks
Risks Centering Around the Physical Property, Risks Centering Around Administration, Risk in
Connection with Labor Force, Risks in Connection with Materials, Risks of Technological Change.
Those Risks are related to the enterprise and it is very important for business

Assignment: Case Study

Instruction: Read the paragraph below and answer the questions that follow.
Questions
1. Bearing in the mind the history of scrabble , as well as the idea of a political game in the
1960 campaign what three factors do you think accounted for the novelty game
company failure?

first because of the price is high and the company didn’t make a study for their product that
was cause of failure.
second is the Under the contractual approach, the primary goal is to understand what well-
informed parties would agree to, if there were no costly hurdles to their reaching an agreement
of the small company it will cause the failure of the companys.
third it was the bargaining costs. The information costs arise because of the information
asymmetry between the company and the customer--the company typically knows far more
than the customer about how the information will be used by the company it will cause the
failure of the company.

2. What would you suggest the company do with its game?

-My suggestion for the company improvement of their games in terms of

creativity, and something we could acquire a lesson also it is enjoyable which
what the most want while playing every game. And pay attention to your
customer satisfaction

MODULE V: FINANCING AND BUDGETING

LESSON 9
TOPIC: FINANCING THE INDUSTRIAL ENTERPRISE

ACTIVITY “Management Act”

DIRECTIONS: Read and understand the instruction carefully. Send your Video Presentation with
your Power Point Presentation on our Group Chat Messenger. These are the guidelines on
making your video presentation are:

A. You were given 5 topics; you only choose 1 topic. Make a research on the topic you
chosen.

These are the following topics:

1) Creating value through financial management.

2) Cost reduction and control.
3) New financial approaches for the economic sustainability in industrial enterprise.
4) Fundamental analysis to assess earnings quality.
5) Operating and financial leverage.
6) Then make your video presentation together with your Power Point Presentation on
the topic you have chosen.
7) Discuss thoroughly about the topic you choose on your video presentation. This video
presentation allowed up to (7 minutes) video.
 8) After you answer the given questions on that analysis you have to include it on your
Power Point Presentation.

ANALYSIS “Management Think”

Note: Include this on your Power Point Presentation

1. What are your thoughts about this activity?

To Improve your presentation skills, starting now, with this short self-test, and also to enhance
our pronunciation, vocabulary, and boost our confidence in speaking English in making a video
presentation.

2. Cite at least five important roles of financing in the industrial enterprise.

 savings, wealth, risk, credit and policy

3. From the above activity (based on your research) give the insight on that
topic you chosen.

- My insight about the topic that I’ve chose is that Operating leverage and financial leverage are
both tells the different things about a company's financial health. Operating leverage is an
indication of how a company's costs are structured and also is used to determine its breakeven
point. Financial leverage refers to the amount of debt used to finance the operations of a
company.

4. Make a summary on the topic you chosen and must be in detailed form.

- Operating leverage and financial leverage are two different metrics used to determine the
financial health of a company. When a firm utilizes fixed cost bearing assets, in its operational
activities in order to earn more revenue to cover its total costs is known as Operating Leverage.
The utilization of such sources of funds which carry fixed financial charges in company’s
financial structure, to earn more return on investment is known as Financial Leverage.

Self-Check #1
DIRECTIONS: Read and understand the following questions.

1.Define financing and budgeting on your own word.

-budgeting the expectation of revenues that a business wants to achieve for a future
period and the financial estimates the amount of revenue or income that will be
achieved in the future period

2.Cite at least 5 reason the importance of cash flow in every transaction.

- The 5 reasons of the importance of cash flow in every transaction are Cash flows refer to
the movements of money into and out of a business, typically categorized as cash flows
from operations, investing, and financing. Operating cash flow includes all cash
generated by a company's main business activities. Investing cash flow includes all
purchases of capital assets and investments in other business ventures. Financing cash
flow includes all proceeds gained from issuing debt and equity as well as payments
made by the company. Free cash flow, a measure commonly used by analysts to assess
a company's profitability, represents the cash a company generates after costs.

3. Based on what have you understand this lesson, discuss thoroughly the financing
industrial enterprise and also the cash flow of financial enterprise.

- Financing industrial enterprise is a strategy that is employed by companies in the

woodworking sector that specialize in the production of bonded wood products. The
purpose of this is to determine which aspects in the manufacturing process are critical
 for the quality of solid wood panels, in order to increase the end product's quality while
lowering production costs. While, Cash flow of financial enterprise, is the net amount of
cash and cash-equivalents transported into and out of a business is referred to as cash
flows. Money received is referred to as inflows, while money spent is referred to as
outflows.

APPLICATION “Management Perform”

Guided Practice

DIRECTIONS: Check your understanding of the input by answering the question. This will be the
topic: “Much is made from time to time of the rise or fall in the number of business failures.
What special function, if any, in the national economy is performed by this phenomenon?”.
All your answers write inside the box on your Reflective Journal. Label it as “Journal Entry #5”.
Here attached the rubric.
LESSON 10

TOPIC: THE MONEY MARKET

ACTIVITY “Management Act”

ECONOMICS WORKSHEET: MONEY MARKET!

DIRECTIONS: WRITE THE WORD OR PHRASE NEXT TO ITS

DEFINITION ON THE SPACE PROVIDED.
 Legal Tender Savings Account Debit Card
Checking Account Barter Currency
Money Credit Coins
Check Debt Collateral

money_______ 1. Anything that is customarily used as a medium

of exchange

______barter ________ 2. The exchange of goods and services for other

goods and services.

____legal tender _______ 3. Forms of money that must be accepted by law

for payment of public and private debts.

______currency________ 4. The type of money that includes both coins

and paper money.

______coins___________ 5 Metallic forms of money such as pennies,

nickels, dimes.

____collateral__________ 6. Property, assets, pledged by the borrower of

money to protect the lender.

___checking account____ 7. Account with money deposited in it that can be

withdrawn at by writing a check.

____saving account______ 8. Account where the bank pays the depositor

interest based on the amount of the deposit.

____debit card _______ 9. Allows you to purchase goods and services for
a claim on money you don’t have yet.

________check________ 10. Note for money drawn from a bank that be used to pay bills or
transfer money.

ANALYSIS “Management Think”

1. Define money market on your own word.

 - In my own understanding, money market is the trading in very short-term debt
investments. It involves large-volume trades between institutions and dealers at the
wholesale level. It is made up of individuals, firms, and institutions, as well as the
process of collecting, accumulating, and administering money and credit for the purpose
of funding economic activity.

2. Explain the operation and activities of the money market.

- Money market consists of negotiable instruments such as treasury bills, commercial

papers. and certificates of deposit. It is used by many participants, including companies,
to raise funds by selling commercial papers in the market. Money market is considered a
safe place to invest due to the high liquidity of securities.

3. Why is there a need for such a market?

Markets facilitate trade and allow for the distribution and allocation of resources in a
community. The concept of a market in mainstream economics refers to any framework
that permits buyers and sellers to exchange any type of commodities, services, or
information. A transaction is the exchange of products or services, whether for money
or not

4. How does money market work?

-Money market accounts are a type of savings account. They pay interest, but some
issuers offer account holders limited rights to occasionally withdraw money or write checks
against the account.

5.Explain the process of borrowing money. Include terms like debt, credit, collateral, and
repossess.
-The term loan refers to a type of credit vehicle in which a sum of money is lent to another
party in exchange for future repayment of the value or principal amount. In many cases, the
lender also adds interest and/or finance charges to the principal value which the borrower must
repay in addition to the principal balance. Loans may be for a specific, one-time amount, or
they may be available as an open-ended line of credit up to a specified limit. Loans come in
many different forms including secured, unsecured, commercial, and personal loans.
Self-Check #2

DIRECTIONS: Choose the one alternative that best completes the

statement or answers the question. Encircle the correct letter of the answer.

1. Activity in money markets increased significantly in the late 1970s and

early 1980s because of
 a) rising short-term interest rates

b) regulations that limited what banks could pay for deposits

c) both A and B of the above

d) neither A nor B of the above

2. Many market securities have all the following characteristics except they
are not
a) short term

b) Money

c) low risk

d) very liquid

3. Money market instruments

a) are usually sold in large denominations

b) have low default risk

c) mature in one year or less

d) are characterized by all of the above

e) are characterized by only A and B of the above

4. The banking industry

a) should have an efficiency advantage in gathering information that would eliminate the
need for the money markets

b) exists primarily to mediate the asymmetric information problem saver-lenders and

borrower spenders

c) is subject the more regulations and governmental costs than the money markets

d) all of the above are true

e) only A and B of the above are true

5. In situations where asymmetric information problems are not severe

 a) the money markets have a distinct cost advantage over banks in providing short-term
funds
b) the money markets have a distinct cost advantage over banks in providing long-term
funds
c) banks have a distinct cost advantage over the money markets in providing short-term
funds
d) the money markets cannot allocate short-term funds as efficiently as banks can.

6. Brokerage firms that offered money market security accounts in the

1970s had a cost advantage over banks in attracting funds because the
Brokerage firms
a) were not subject to deposit reserve requirements

b) were not subject to the deposit interest rate ceilings

c) were not limited in how much they could borrow from depositors

d) had the advantage of all the above

e) had the advantage of only A and B of the above

7. Which of the following statements about the money markets are true?
a) not all commercial banks deal for their customers in the secondary market

b) money markets are used extensively by businesses both to warehouse surplus funds
and to raise short-term funds

c) the single most influential participant in the U.S. miney market is the U.S. Treasury
Department
d) all of the above are true

e) only A and B of the above are true

8. Which of the following are true statements about participants in the

money markets?
a) large banks participate in the money markets by selling large negotiable CDs

b) the US government and corporations borrow in the money markets because cash
inflows and outflows are rarely synchronized

c) the Federal Reserve is the single most influential participant in the US money market

d) all of the above are true

 e) only A and B of the above are true

9. The most influential participants in the US money market

a) is the Federal Reserve

b) is the US Treasury Department

c) are the large money center banks

d) are the investment banks that underwrite securities

10. The Fed is an active participant in money markets mainly because of its
responsibility to
a) lower borrowing coststo encourage capital investment

b) control the money supply

c) increase the interest income of retirees holding money market instruments

assist the Securities and Exchange Commission in regulating the behavior of other
money market participants
APPLICATION “Management Perform”

Guided Practice

DIRECTIONS: Check your understanding of the input by answering the following questions. This
will be the topic: A.) “Distinguish between short-term loan, intermediate, and long-term
loans. How are these loans financed?”. B.) Thoroughly discuss about the money market.
All your answers write inside the box on your Reflective Journal. Label it as “Journal Entry
#6”. Here attached the rubric.
The short-term loan Whereas intermediate and short-term loans represent different types
of financing, both are virtually serviced by the same types of lending agencies. Short-term
loans may range from 30 days up to 2 years, and intermediate term loans to 5 years,
depending upon the character and circumstances of the loan.

while the long-term loans is In the past, commercial banks dealt mainly in short-term
loans, but financial changes in the last 20 years have induced them to seek outlets for their
funds in fixed-term investments for as long as 10 to 15 years maturityThe sums wanted by
the borrowers are too large for any but institutions of great resources and wide connection.

the money market

ANALYSIS “Management Think”

1. What are your thoughts about the activity?

- My thoughts in this activity that it is hard to make our own financial structure but at the
same time, while doing this activity, I am also gaining new skills and knowledge that
could help me to start my own business in the near future.
 2. Does your financial structure will be effective on your business? Why?

-Yes! Because it will be effective because I will make it sure that I have a clear business
plan and I will monitor my financial position and also I will ensure the customers will pay
on the time. Another things is I will gather information on haw to control stock and
became more efficient

3. How does planning and financial structure work together?

-finance in strategic planning, decision making and financial performance can play
a more integral role in the strategic planning and the enhanced management of
its working capital

4. Cite at least 5 reason the importance of financial structure?

- Without financial management business cannot exists

- Adequate funds availability
- Cash flow management system
- Always keeping long term goals
- Financial Planning value and importance in a business

5.Assuming you already have a business. Do you think this quality planning of your
business it will function well? Depend your answer.

-yes, because quality of planning growing a business means taking many decisions
about the way you want to expand your operations creating a strategic plan is a key
component of planning for growth. it will help you prepare a realistic vision for the
future of your business and in doing so can maximize your business potential for
growth. Quality planning determines the scope of what's going to be measured, what
metrics will determine whether the project is successful, and how those will be satisfied,
from beginning to end.

6.How will you prove if a certain business has a strong foundation in planning and financial
structure? Show here some illustration chart regarding that business possesses a strong
foundation.
Self-Check #3

DIRECTIONS: Check your understanding of the input by answering the following questions.

1. Differentiate common stock from preferred stock on your own word.

The main difference between preferred and common stock is that preferred stock gives

no voting rights to shareholders while common stock does. Preferred shareholders have
priority over a company's income, meaning they are paid dividends
before common shareholders.

2. What is meant by authorized and capital stock on your own word.

-Authorized stock is the amount of authorized capital that a company can legally issue to

shareholders. 'Capital' means the same as 'shares' or 'stock'. Therefore, the term
means how many shares a company can legally sell.

3. Based on your understanding discuss about working capital.

- Based on my understanding, working capital is a metric that measures a business's liquidity,
operational efficiency, and short-term financial health. If a company has a significant amount of
positive working capital, it should be able to invest and grow. If a company's present assets do
not equal its current liabilities, it may struggle to grow or repay creditors, and may even go
bankrupt.
4. Thoroughly discuss about reserve and expansion on your understanding.

- In my own understanding, reserve are the cash held in reserve by a bank to ensure that it can
satisfy its liabilities in the event of an unexpected withdrawal. Reserve are also a technique
used by the central bank to influence interest rates by increasing or decreasing the money
supply in the economy. While, expansion is the phase of the business cycle when the
economy moves from a trough to a peak.

5. Cite at least 3 problem issues that occur in the small business. On that 3
issues problem you stated, how does these problem are going to solve?
(specify each of the solution based on that stated issues problem).
- 3 problems that occur in small businesses and their solution to each problem are:

 Capital

- Solution: Though various ways are there for arranging small business funding, starting
from friends and family to conventional bank loans, many experienced entrepreneurs
believe that self-fueled growth model is the best and less-risky one. Instead of trying to
establish a big business house overnight, aim at your primary customers. If you can
provide value added services to them, by the virtue of word-of-mouth publicity, your
business will develop automatically. However, if you need to take outside funding
anyway, don’t forget to consult an attorney to avoid future complications.

 Finding customers

- Solution: If your product/service adds value to people’s life, you don’t need to spend a
huge amount of money on advertising in the initial stages. If you’ve a great
product/service, people will automatically come to you. Just remember to keep your
patience and approach only those people who show interest in your product/service.

 Choosing what to shell.

- Solution: It’s very common that being a newcomer in the entrepreneurial world, you
may not have the adequate expertise to select a profitable niche. In that case, hire a
freelance market researcher who will survey the related market e.g. the field you want
to do business in, and prepare a report of profitable niches. You can then analyze the
report and decide on your preferred niches.

6. How does the issuing of bonds differ from the issuing of stock?

Stocks give you partial ownership in a corporation, while bonds are a loan from you to a
company or government. The biggest difference between them is how they generate
profit: stocks must appreciate in value and be sold later on the stock market, while
most bonds pay fixed interest over time.
7. Why is it important for a business to maintain reserve? How does an
enterprise achieve its expansion program.

the important for a business maintain reserve for working capital, to liquidate debts, to
cover credit losses, against contingencies such as fire, theft, and unexpected liabilities,
for depreciation and obsolence, to offset price fluctuations on inventories, for taxes, to
provide for improvements and expansion, and for related purposes. Reserve items may
be earmarked cash or property or unidentified as an overall item. The expansion
program When greater amounts of capital are needed for expansion, the firm may seek
equity capital through sales of stock to employees, customers, sometimes to creditors,
and the general public
 APPLICATION “Management Perform”

Guided Practice

DIRECTIONS: Check your understanding of the input by answering the following questions. This
will be the topic: A.) “How does this finance the noncorporate enterprise function? B.)
Distinguish between internal and external financing of an enterprise., C.) In the corporate
capitalization it stated the classification of stock. How does these two classification of stock
work individually?
All your answers write inside the box on your Reflective Journal. Label it as “Journal Entry #7”.
Here attached the rubric.

JOURNAL #7
A non-corporate entity is a legal entity that does not go through the incorporation process.
Shareholders possess certain responsibilities and rights that owners of other legal entities do not
have. Sole proprietorship or partnerships are non-corporation businesses that have no legal
separation from the business owners.

Finance is generated within the business. The finance is sourced from outside of the

business. Internal sources are used when the requirement of funding is limited. External sources are
used when the requirement of funding is huge.

While there are two main types of stock—common and preferred—the term "equities" is

synonymous with common shares, as their combined market value and trading volumes are many
magnitudes larger than that of preferred shares.

The main distinction between the two is that common shares usually carry voting rights that enable
the common shareholder to have a say in corporate meetings (like the annual general meeting or
AGM)—where matters such as election to the board of directors or appointment of auditors are
voted upon—while preferred shares generally do not have voting rights. Preferred shares are so
named because they have preference over the common shares in a company to receive dividends as
well as assets in the event of a liquidation.
 ASSESSMENT
Do this independently

DIRECTIONS: Read the situation below

Letting the Family In

When Charles Barley started his retail company three years ago, he had more than enough working capital to
keep operations going. This abundance of money helped him grow rapidly, and today he has earlier in 16
states. In order to become larger, however, he is going to have to secure outside funding. Charles has decided
to issue stock. The investment house advising him has suggested that he float an issue of 1 million shares at
$5 each. After all expenses, he will clear $4.50 per share. Charles and his wife intend to hold on to 250,000
shares and sell 750,000 shares. Charles feels that, between his shares and those that will be bought by his
relatives and friends, he need have title concern about the firm’s being taken over by outside investors.

Charles talked to his father, who agreed to buy 10,000 shares at $5 each. Charles two uncles are uncles are
each buying 5,000 shares at $5 each. A group of 20 other relatives is going to buy an additional 5,000 shares.
Earlier this week, Charles received some good news from his accountant. His profit estimate for next year is
going to be at least double what he had previously estimated. When Charles shared this information with the
investment brokers, they were delighted. “When this news gets out,” one of them, “your stock will rise to
between $13 and $15 per share. Anyone who gets in on the original offering at $5 will do very well indeed.”

Charles has told only his father and two uncles the good news. Based on his information, the three of them
have decided to buy three times as much stock as previously planned. “When it rises to around $12 ,” his
father said, “I’ll sell 10,000 shares and hang on to the other 20,000.” His uncles intend to do the same thing.
Charles is delighted. He also intends to tell some of his other relatives about the improved profit picture prior
to the time the initial stock offering is made.
DIRECTIONS: Read and understand the situation carefully. Then answer the following
questions. Here attached the rubric.

1. As individual entrepreneur, what potential/goal does Charles Barley

possess?
- Charles Barkley was a remarkable basketball player.  Whether it was playing international,
NBA, or college ball, despite measuring maybe just 6-foot-5, the forward stood out. Playing on
five USA Basketball teams, red, white and blue teams with Barkley as a member compiled an
overall win-loss record of 37-2 (.949 winning percentage) while winning four gold medals and
one bronze medal. Among his collection are two Olympic golds. 

2. Being an entrepreneur cite at least 5 essential role does Charles wants to

emphasize.
-Being entrepreneur, the 5 essential role that Charles wants to emphasize are being
patient of everything, being dedicated, risk taker, clever and goal oriented

3. How does the working capital experience by Charles if it is success or

failure? Depend your answer.

- The working capital of Charles is success because it is said by his accountant that his
profit estimate for next year will at least double compared what he had previously
estimated.

4. If you’re going to take place the situation of Charles, what planning and
financial structure you want to introduce that you think it will work? Depend your answer.
-The first is the business concept, where you discuss the industry, your business
structure, your particular product or service, and how you plan to make your
business a success.
-The second is the marketplace section, in which you describe and analyze potential
customers: who and where they are, what makes them buy and so on. Here, you also
describe the competition and how you'll position yourself to beat it.
-Finally, the financial section contains your income and cash flow statement, balance
sheet and other financial ratios, such as break-even analyses. This part may require
help from your accountant and a good spreadsheet software program.

5. If you’re were advising Charles, what will you tell him by setting the
standards and criteria for success his business?

-I tell him that you need to love what you do in order to build it from the ground up. There will
be times when money is slow, you can barely find customers, and a job is looking like the better
option to make money. If you love what you do, you can overcome these challenges and build
your business despite the setbacks you deal with success his business

6. In this situation, how will you connect this in reserves and expansion in
business?

- In this situation, I will connect this in reserves and expansion in business through
reserves business is critical since reserves are part of a company's income placed aside
to bolster the company's financial situation. While, expansion is significantly more
essential because it is a stage when a company reaches a point of growth and looks for
new methods to maximize revenues.