3.5 Default or credit risk

This is the risk that contractual returns will not be paid because the borrower's financial situation has deteriorated to the point that it is no longer able to service the debt. It is possibly the commonest type of risk in commerce generally, and you are probably familiar with it in some shape or form. It affects many areas of business decision-making over and beyond the specialised world of investment risk and return. Most large companies devote significant resources to the identification,
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

3.4 Variability of income

This applies to investments where the return is defined in generic terms but the actual amount of the return may fluctuate in an unpredictable manner. As we have seen, the most obvious example is the company share, but there are others, such as debt instruments (such as many bank deposits) where there is a contractual right to interest but the interest rate fluctuates according to some formula – or even simply at the whim of the bank! An important example of this type of security is the Flo
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

6.1 Introduction

Scheduling is about deciding the time that each task will take to do and the sequence in which the tasks will be carried out. There are a number of approaches to estimating the time and effort (and, therefore, cost) required to complete a project. Some estimates may be based on past experience but, because each project is essentially unique, this alone may not be sufficient. A clearer picture can be obtained by measuring each task in terms of the content of the work, the effort required to ca
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

4.5 M is for Method

Method is about the way in which a piece of information is produced. This is quite a complex area as different types of information are produced in different ways. These are a few suggestions to look out for:

Opinions – A lot of information is based on the opinion of individuals. They may or not be experts in their field (see P for Provenance) but the key message is to be clear that it is just an opinion and must be valued as such.

Research – You don’t have t
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

2.1 Early beginnings – From magic to medicine

The life sciences sector, and its precursor the pharmaceutical industry, has a long and rich history. Pharmaceuticals, which are defined as compounds manufactured for use as medicinal drugs (remedies), date back to 2735 BC and the Chinese Dynasty of Shen Nung. Their development can be traced through ancient Hindu, Egyptian and Mediterranean civilisations. The word ‘pharmaceutical’ originates from the Greek pharmakon, meaning ‘drug’. In t
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

2.6 Conclusion

In this section we have looked at the different ways in which expectations about corporate governance have grown. We have briefly reviewed the role of corporate scandals as a generator of regulatory responses, and in particular the significant problems that surfaced in 2002–3. We have also noted that research shows that evidence of a positive correlation between good investment returns and good corporate governance policies is not conclusive.

We have looked at the growth of shareholde
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

5.6 A way of dealing with social pressures: decoupling

Organisations often deal with these social pressures by decoupling responses to these different pressures. The need to appear legitimate in the eyes of important constituencies is met by actions and practices which have a purely ceremonial character: they are done for the sake of appearances and not with any real engagement. The example in Author(s): The Open University

5.5.2 Mimetic pressures

Mimetic pressures come from the pressure to imitate what others do. The world is complicated and finding the optimal solution often difficult. One way of dealing with this complexity is to copy others. For example, in my own consulting work I carried out an assignment for British Petroleum (BP). Subsequently, other (smaller) clients would often ask me ‘So how does BP do this?’, usually with little regard for the different circumstances they faced. It is this mimetic pressure that
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

5.5 Social pressures which affect our decision making

Broadly, there are three kinds of social pressure which affect how we make decisions:

  • coercive

  • mimetic

  • normative.

We look at these in more detail below.


Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

3.2 Utility theory

Utility theory is based on this assumption of rationality and describes all decision outcomes (financial and otherwise) in terms of the utility (or value) placed on them by individuals. Within this framework, decisions can be understood in terms of rationally ordered levels of utility attached to different outcomes.

Bazerman (2001, pp.3–4), for example, describes a formally rational decision process for arriving at a decision with the greatest expected utility in the following terms:<
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

Learning outcomes

By the time you have completed studying this unit, you should:

  • have greater insight into your own decision-making processes and those of others;

  • be able to use that insight to make more effective decisions;

  • possess a range of different perspectives on what counts as an ‘effective’ decision;

  • be better equipped to understand and influence the decision-making processes of other individuals and groups;

  • understand better
    Author(s): The Open University

    License information
    Related content

    Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

Acknowledgements

Except for third party materials and otherwise stated (see terms and conditions), this content is made available under a Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Licence

Grateful acknowledgement is made to the following sources for permission to reproduce material in this unit:


Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

1.1 Globalisation

Globalisation is something we tend to take for granted, mostly in the form of the remarkably low prices we pay for our consumer goods. When the first pocket calculator was launched in the UK in 1972, it cost £79 plus tax, an amount close to the average monthly take home pay.

Ten years later came the original IBM PC. Replete with a 4.77 MHz processor, 64kB RAM, a 12″ monochrome monitor (and an optional floppy disk drive!), it carried a UK price tag in excess of £1500, at that time a
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

4 Key points

The important points this unit has covered include:

  • Defining the entrepreneur in terms of economic function and role.

  • Identifying the key characteristics of successful entrepreneurs and entrepreneurial firms.

  • Considering the role of entrepreneurial motivation in decision making and business behaviour.

  • Identifying leadership and management styles appropriate to an entrepreneurial firm


  • Author(s): The Open University

    License information
    Related content

    Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

Learning outcomes

After studying this unit you should:

  • understand the nature of entrepreneurship;

  • understand the function of the entrepreneur in the successful, commercial application of innovations;

  • confirm your entrepreneurial business idea;

  • identify personal attributes that enable best use of entrepreneurial opportunities;

  • explore entrepreneurial leadership and management style;

  • identify the requirements for building an
    Author(s): The Open University

    License information
    Related content

    Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

2.3 Closing the project

Closing a project can be quite an emotional experience for team members who have worked together for some time, particularly if close bonds have developed. The manager of a project has some obligations to staff who have worked for some time on it. Build into the plan a closure interview with each member of staff, so that their contribution can be formally recognised and recorded. Staff may need help to recognise the skills and experience that they have gained and how these have been evidenced
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

7.2 Negotiation skills

Negotiation skills are essential for the project manager to get individuals and groups to agree on a common approach to a project, despite their potentially conflicting interests and priorities. The project manager needs to be able to negotiate with suppliers and customers and individuals to adopt a particular course of action. It is also important that negotiation is conducted in a way that will build long-term relationships, rather than simply secure short-term gains.

Effective negoti
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

2 What's so great about innovation?

So far we have suggested that innovation is a positive concept and, it appears, the rate of innovation continues to accelerate, led mostly by technology. The process is an example of positive feedback, in which the change is self-reinforcing: the development of technology itself increases the capacity for technological innovation, and raises the expectation of consumers for further innovation. While there seems little reason why this process of accelerating technological change should
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

1.6.3 Summary

  • High culture tends to unite Europeans.

  • Education plays a key role in the construction of national identity. A common curriculum shared by all European peoples will be crucial in fostering the development of a European identity.


Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share

1.4.1 Historical background

European unification was begun by the social democratic and Christian democratic leaders of the Western European states who had fought each other during the Second World War. The idea was to create a community of states that would guarantee peace and prosperity. The process turned out to be long and arduous, particularly after the federalist failures of the Congress of the Hague (1949) and the European Defence Community (1953). The main emphasis was on economic co-operation, and the project w
Author(s): The Open University

License information
Related content

Except for third party materials and/or otherwise stated (see terms and conditions) the content in OpenLearn is released for use under the terms of the Creative Commons Attribution-NonCommercial-Share