Operations in some form has been around as long as human endeavour itself but, in manufacturing at least, it has changed dramatically over time, and there are three major phases - craft manufacturing, mass production and the modern period. Let's look at each of these briefly in turn.

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There are times when management problems seem too complicated and â€˜messyâ€™ to analyse. A technique, the fishbone diagram, can be used by both individuals and groups to help to clarify the causes of a difficult problem and capture its complexity. The diagram will help provide a comprehensive and balanced picture and show the relative importance and interrelationships between different parts of the problem.

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â€˜The whole is more than the sum of its partsâ€™ is a good place to start thinking about systems. A car is more than its individual components. We can think of a football team as being more than a collection of individual players or a family being more than a group of people who share the same name.

Each of these examples â€“ the car, the football team and the family â€“ can be seen as systems. Individual parts of a system are connected together in some way for a purpose.

Example
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The results of the evaluation reflect the scores that are awarded to each option and the weightings that are attached to the different criteria. A change in one or the other (or in both) will lead to a change in the results. Accordingly, when you construct a matrix of this kind be sure to think hard about the scores and weightings. A matrix like this can be used in many ways, for example, when interviewing applicants as part of a selection process.

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A matrix is an arrangement of â€˜cellsâ€™ in rows and columns. A spreadsheet is a simple example of a matrix. Each cell is described by its position in a column, normally denoted by an alphabetical letter, and in a row, normally denoted by a number. So â€˜cell B6â€™ on your spreadsheet is the one which occupies column B and row 6. The size of a matrix is described by the number of rows and the number of columns (in that order).

A â€˜two-by-twoâ€™ matrix has two rows and two columns. A â
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The origin is the point on the graph where the x axis value (the output) and the y axis value (the total costs) are both zero.

Author(s): The Open University

1. Why is a social marketing approach relevant and necessary in today's environment?

2. How can an understanding of consumer/human behaviour help to develop appropriate actions and interventions?

3. Who are the target markets for social marketing programmes?

4. What is the role of marketing communications and branding in achieving behavioural ch
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Greenley and Foxall (1998) emphasise that the marketing literature typically focuses on only two stakeholder groups (consumers and competitors), arguing that this should be extended to include other key stakeholders. Freeman (1984) highlights the interdependence of organisations and their stakeholders, i.e. â€˜any group or individual who can affect or is affected by the achievement of the organisation's objectivesâ€™ (p. 46). This definition emphasises the wide range of individuals, groups an
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Bachelier, L. (1900) ThÃ©orie de la Speculation, Paris, Gauthier-Villars.
Banz, R. (1981) â€˜The relationship between return and market value of common stocksâ€™, Journal of Financial Economics, Vol. 9, pp. 3â€“18.
Barber, B. and Odean, T. (2000) â€˜Trading is hazardous to your wealth: the common stock investment performance of individual investorsâ€™, <
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In a financial context, risk is a synonym for uncertainty â€“ the possibility that the actual outcome will differ from the mean expected outcome. It is therefore a neutral rather than a negative concept. Investors are risk-averse in the sense that they require more return for taking on more risk. Risk itself is measured by the standard deviation of actual returns around the mean expectation. In the real world, investment risk is created by a number of different factors that affect the certain
Author(s): The Open University

Any investment gives rise to a stream of future expected cash flows. DCF converts all of these to an equivalent amount of present-day money (or present value) by discounting each future cash flow for the appropriate number of periods (for example, years) by the periodic discount rate. The periodic discount rate is the investor's required rate of return including the time preference rate, a premium for risk and an adjustment for inflation.

Having established the present values<
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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 â€“ or even simply at the whim of the bank! An important example of this type of security is the Flo
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Acknowledgements

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

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1.7 Monitoring equity performance

For those equities in issue their current market value and some indicators of their performance are provided in the daily press. Table 3 shows the closing levels and the volume of shares traded in respect of a selection of companies on the London, New York, Frankfurt and Tokyo Stock Exchanges on 7 June 2005.

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References

Baker, M. (2006). Private communication, Business in the Community, 29 March.
Brewster, D. (2004). â€˜CalPERS wave-making brings flakâ€™, Financial Times Fund Management, 9 August.
Business Week (2004). â€˜Special report: corporate governance, investors fight backâ€™, 17 May.
Butz, C. (2003). Decomposing SRI
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2.2 Recent governance failures

As we have discussed before, the creation of corporate regulation is often linked to perceived failures of corporations and their management to behave in the way society expect them to. Corporate governance is not an exception to this trend, and, as with accounting, different countries may well experience difficulties at different times. For example, the development of British codes of best practice, which began with the Cadbury Committee, can be related to governance scandals such as Polly P
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7.5 Becoming an institutional entrepreneur

While acting in ways that are seen to be legitimate is important for both individuals and organisations, social institutions are not immutable. Some people and organisations seem to have a talent for changing the rules of the game.

Some writers have referred to this as being an institutional entrepreneur. At the organisational level examples might include organisations such as Microsoft or Sun Microsystems working actively to establish industry standards which favour them. At the
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7.4 Avoiding decision traps

While it is not possible to change our human natures, it is possible to immunise ourselves to some extent against common decision traps. Useful strategies include:

• Get in the habit of reframing problems. For example, if you are considering strategies for avoiding a loss of â‚¬10,000 try asking yourself if you would feel differently if you consider them as strategies for making a gain of â‚¬10,000.

• Think about the information you have
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7.1 Introduction

We have taken a brief excursion through three different perspectives on decision making (the rational-economic, the psychological and the social) and we have considered how we think about risk from these different perspectives. How can you use these ideas to improve your own and others' decision making? The first way is to use them to develop greater insight into the pressures and influences that may be affecting how you process information, think, and decide. By becoming more aware of these
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6.4 Prospect theory

Kahneman and Tversky (1979) developed â€˜prospect theoryâ€™ to describe this combination of risk and loss aversion. This suggests that whether an individual is risk seeking or risk averse will depend on where they are in relation to a personal reference point. The reference point divides the area where they feel as if they are in loss from the area where they feel they are in gain. This point is not usually zero, and will change over time. For example, a professional financial trader who is p
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