France Première STMG (management and business) — 1re specialties
Chapters: 9
1. Law and economics — law
What is law? · How law settles a dispute · Who can assert rights? · Rights recognised to persons
- What Is Law? The Basics – Law is a set of general, binding rules made or recognised by the state and enforced by courts. It overlaps with morality but is not the same. Its sources are the constitution, treaties, statutes, regulations, case law and custom, arranged in a hierarchy. Natural persons and legal persons (like companies) hold rights and duties. Everyday law includes contracts, consumer protection and access to courts.
- The Justice System: How Disputes and Crimes Are Settled – A justice system is the set of rules, people and courts a society uses to settle disputes fairly and deal with crimes. Many disputes end without court through negotiation, mediation or arbitration (ADR). Civil cases are between parties and end in compensation; criminal cases are brought by the state and can end in punishment. In a trial each side brings evidence; the claimant must prove a civil case on the balance of probabilities, and the prosecution must prove a crime beyond reasonable doubt. A losing party can appeal to a higher court. Judges must be independent. Young people are judged in special youth courts that focus on protection and education.
- Civil Liberties and Civil Rights – Civil liberties are freedoms the government must not take away: speech, press, religion, peaceful assembly, privacy and fair treatment by police and courts (due process). Civil rights are guarantees of equal treatment, so no one is denied jobs, schools, votes or services because of race, caste, religion, gender or disability. Most constitutions write these down in a bill or charter of rights, and courts protect them. No freedom is unlimited: fair, legal limits protect public safety and other people's rights. Equal rights were won by social movements, from women's suffrage and India's ban on untouchability to the US civil rights movement and the end of apartheid. Governments then add laws and policies, such as anti-discrimination laws and affirmative action, while balancing majority rule with minority rights.
2. Law and economics — economics
Key economic questions and how agents answer · How wealth is created and shared · How households use their income · How economic activity is financed · Are goods markets competitive?
- Economics Basics: How People, Firms and the State Choose – Economics is the science of how people, firms and governments use limited resources to meet unlimited wants. Needs are met by goods and services (free vs economic goods, consumer vs capital goods, private vs public goods). Because of scarcity, every society answers What, How and For whom to produce. Three economic agents act: households (work, consume, save), firms (produce and sell to earn profit = revenue − cost) and the state (rules, taxes, public services). Economics uses methods like observation, models and statistics; it splits into microeconomics (one household, firm, market) and macroeconomics (whole economy: GDP, unemployment, inflation, cycles). Social goals include growth, full employment, stable prices, fair income sharing and sustainability.
- National Income Aggregates: GDP, GNP, NDP, NNP, Real GDP and Welfare – Start with GDP at market price: value of all final goods and services made inside the country in a year. Subtract depreciation to go from Gross to Net. Add net factor income from abroad (NFIA) to go from Domestic to National. Subtract net indirect taxes (indirect taxes − subsidies) to go from Market Price to Factor Cost. NNP at factor cost is National Income. Nominal GDP uses current prices; real GDP uses base-year prices; GDP deflator = nominal ÷ real × 100. A higher GDP need not mean more welfare because of unequal distribution, non-monetary exchanges and externalities.
- Family Budget: Household Income, Spending and Saving – A household is a group of people who live together and share income and spending. It has needs (food, housing, clothes, health, education) and wants (things that are nice but not necessary). Its income comes from work (wages, salary), from running a business, from property (rent, interest, dividends) and from transfers (pensions, grants, gifts). A family budget is a plan that lists expected income and spending for a period, usually a month. Spending can be fixed (rent, fees, loan instalments) or variable (food, electricity, travel). If income is more than spending the budget has a surplus, if equal it is balanced, and if less it has a deficit. Because money is limited, every choice has an opportunity cost: the next best thing you give up.
- How Economies Are Financed: Saving, Banks, Loans and Bonds – Some people have money left over (savings); others need more than they have (loans). Money moves from savers to borrowers in two ways: through a bank (indirect finance) or straight through shares and bonds (direct finance). The interest rate is the price of borrowing. When the state borrows a lot, less may remain for firms (crowding out).
- Market Structures: From Perfect Competition to Monopoly – A market structure describes how many firms sell, how alike their products are, and how easy it is to enter. Perfect competition: many firms, identical goods, free entry, price takers, normal profit in the long run. Monopolistic competition: many firms, differentiated goods, easy entry, some price power. Oligopoly: a few interdependent firms, high barriers, strategic behaviour (game theory, collusion, price leadership). Monopoly: one firm, no close substitutes, high barriers, price maker with possible supernormal profit and price discrimination. Contestable markets show that the threat of entry also limits power.
3. Management — meeting organisational management
Why organise collective action? · The variety of organisations · What is management? · Management facing a changing environment
- Nature and Significance of Management – Management means getting work done with and through people so that goals are reached on time (effectiveness) and at low cost (efficiency). It has organisational, social and personal objectives. It is partly a science, fully an art and not yet a full profession. It works at three levels (top, middle, lower) through five functions (planning, organising, staffing, directing, controlling), and coordination joins them all.
- Sole Proprietorship, Partnership and Hindu Undivided Family Business – A sole proprietorship is owned and run by one person who takes all profit and bears unlimited liability. A partnership is run by two or more people who share profit under an agreement; its partners are of many kinds and a written deed and registration protect them. A Hindu Undivided Family business is run by the eldest member, the karta, for all family members, who become members by birth.
4. Management — strategy from diagnosis to goals
What is strategy? · Building a strategic diagnosis · Turning diagnosis into goals · Evaluating goals and practices
- Business Strategy – A business strategy is a long-term plan that takes a firm from where it is to where it wants to be. It starts from a mission (why the firm exists), turns it into SMART objectives, checks the firm's position with SWOT, chooses where to compete (Ansoff matrix: markets and products) and how to compete (Porter: cost leadership, differentiation or focus), and then puts the plan into action with people, money and control.
- Business Performance Indicators: KPIs, Goals and Dashboards – A performance indicator is a number that shows how well a business is doing against a goal. Efficiency means getting more output from the same input; effectiveness means reaching the goal. Overall performance has four sides: financial, commercial, social and environmental. A dashboard shows many indicators together, and the weakest side shows where to improve.
5. Management — strategic choices of organisations
Strategic options for firms · Strategies of public organisations · Civil-society organisations and strategy
- Business Strategy – A business strategy is a long-term plan that takes a firm from where it is to where it wants to be. It starts from a mission (why the firm exists), turns it into SMART objectives, checks the firm's position with SWOT, chooses where to compete (Ansoff matrix: markets and products) and how to compete (Porter: cost leadership, differentiation or focus), and then puts the plan into action with people, money and control.
- Strategies of Public Organisations – A public organisation works for the general interest, not for profit. It may run a service itself or delegate it to a company by contract. Central and local levels share the work, outside rules (such as European ones) and lobbies shape choices, and openness plus performance checks keep the organisation accountable.
- Civil-Society (Non-Profit) Organisations and Strategy – A non-profit or civil-society organisation (NGO, trust, association, foundation) exists for a stated purpose, not to share profit. It needs people (volunteers and staff) and funds (donations, grants, own sales), must grow carefully, and must be open about where money goes. Any surplus goes back into the purpose.
6. Management science and digital — from individual to actor
Defining types of organisation · How an individual becomes an actor · Balancing people management and labour cost
- Sole Proprietorship, Partnership and Hindu Undivided Family Business – A sole proprietorship is owned and run by one person who takes all profit and bears unlimited liability. A partnership is run by two or more people who share profit under an agreement; its partners are of many kinds and a written deed and registration protect them. A Hindu Undivided Family business is run by the eldest member, the karta, for all family members, who become members by birth.
- Organisational Behaviour: Why People Act As They Do at Work – Organisational behaviour (OB) studies how individuals, groups and structures affect behaviour in an organisation, so that managers can get better results and people can feel better at work. An individual brings personality, perception and attitudes, and today also a digital identity. People pass messages through interpersonal communication, which noise and barriers can spoil. People form groups with status, roles and a sense of belonging, and share a culture with norms. Managers use authority, leadership and motivation to guide the group. When goals, resources or values clash, conflict arises; it can be handled by talking, compromise or a joint solution.
- Human Resource Management (HRM) – Human resource management is planning, finding, developing, rewarding and keeping the people a business needs. HR objectives include employee engagement, talent development, training, diversity, alignment of values and a right-sized, cost-effective workforce. HR performance is measured with labour turnover (leavers ÷ average staff × 100), retention rate, labour productivity (output ÷ workers), labour cost per unit and employee costs as a percentage of revenue. Hard HRM treats staff as a cost; soft HRM treats them as an asset.
7. Management science and digital — digital tech and collective intelligence
Technology turns information into a resource · Sharing information and collective intelligence · Digital: agility or rigidity?
- Information Systems – An information system (IS) is a set of people, hardware, software, data, networks and procedures that work together to collect, store, process and share information. It turns raw data into useful information through a chain: capture, encode, send, store, process and present. Systems are built in a cycle (plan, analyse, design, build, test, run and improve). They make work faster and let many people share knowledge, but they cost money, can fail, can be hacked and can make an organisation rigid.
8. Management science and digital — value creation and performance
Measuring each actor’s share of value · Does value creation mean overall performance?
- Value Added, Profit Allocation and the Accounting Information System – Value added = sales minus goods and services bought from other firms. It is shared between staff (wages), the state (taxes), lenders (interest) and owners (profit). Profit is then split into reserves, dividends and retained earnings. An accounting information system (often an ERP) records every deal once, from source document to ledger to statements, and keeps the data safe.
- Business Performance Indicators: KPIs, Goals and Dashboards – A performance indicator is a number that shows how well a business is doing against a goal. Efficiency means getting more output from the same input; effectiveness means reaching the goal. Overall performance has four sides: financial, commercial, social and environmental. A dashboard shows many indicators together, and the weakest side shows where to improve.
9. Management science and digital — time and risk
Taking time into account in management · Is improving performance risk-free?
- Business Planning: Forecasts, Budgets and Break-even – Planning means deciding today what a business will do tomorrow. Managers plan for three horizons: short term (up to a year), medium term (1–3 years) and long term (over 3 years). They gather fresh information (a business watch), make forecasts with surveys and past data, and turn them into budgets. They check the break-even point to know how much they must sell. They remember that money today is worth more than money later (time value of money). Tools like Gantt charts and spreadsheet simulations help plan tasks and test 'what if' ideas. Each department (operations, marketing, finance) has its own plan.
- Risk Management – A risk is something that might go wrong and cause a loss. We measure it as likelihood × impact. Then we choose one of four treatments: avoid it, reduce it, transfer it (for example with insurance) or accept it. Risk appetite is how much risk a person or business is willing to live with.