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Lublin 2015

Simulation Enterprise

User’s guide

Lublin 2015

Simulation Enterprise

User’s guide

© Copyright by Wyższa Szkoła Ekonomii i Innowacji w Lublinie, Lublin 2015

All rigts reserved. No part of this publikation may by copied, reprinting or distributed

without the prior written permission of the publisher.

Publisher:Wyższa Szkoła Ekonomii i Innowacji w Lublinie

ul. Projektowa 4, 20-209 Lublintel./fax: 81 749-17-70, fax: 81 749-32-13

e-mail: [email protected]

This project has been funded with the support from the European Commission (agreement no 2013-1-PL1-LEO05-37816).

This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be

made of the information contained therein.

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List of Content

USER’S GUIDE 7GLOSSARY OF KEY CONCEPTS 7

Game 7Organisational units in the company 7Buildings 9Business entities 9Human resources 10Production 11Transport 12Innovation 12Trade 13

KEY CONCEPTS OF THE GAME 15Introduction 15

Virtual world 15Distance between locations 15Time in the game 16Players’ companies 16Subject of the market 17Goal of the game 17

GAME ORGANISATION 18Moderator’s module in brief 18Game management 19List of games 19Status of the game 19Creating a new game 20Commencing game 21Controlling the game 22Interfering with the game 22Ending the game 23Scenarios management 23Scenario edit 24Maps list 24

DESCRIPTION OF THE GAME INTERFACE 26Joining the game 26Navigating the game 28

QUICK START 31Joining the game 31Getting familiar with the environment of the company. 32Organisation of production. 33Winning the first contract 35Contract execution 36Further development of the company 41

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List of Content

Company branch screen 41Organisational units’ screens 43

Economic/Trade partners screens 61Common elements 61Information about the company 69Reports 71List of bidding notices 73List of contracts 74System messages 75

ORGANISATIONAL STRUCTURE OF THE COMPANY 77Organisational units in the company 77Buildings 77Professions 78Managers 79Training 80Salary 80Employment/discharge 80Organisational unit limits 81Organisational unit and profession 82Efficiency calculation 82

AREAS OF THE COMPANY 85Production and supply management area 85

Supply management 85Prices of components 86Production process 86Influence on features of ready products 87Quality improvement factor 87Support warehouse 88Production plan 88

Warehouse management 89Own warehouse 89Storehouse 90Utilisation and waste 90

Transport area 91Own transport base 91Forwarder 92Transport organisation 92Transport route defining 93Route placement in time 94Shipping list compiling 95Course of the transport 96Transport cancellation 97

Trade area 97Participation in biddings 97Bidding settlement 98

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List of Content

Processing the contract 98Liquidated damages 99

Trade activities 99Marketing activities 99Advertising campaigns 100Own marketing department 100

Developmental activities area 100Research department 101Points of innovation 101Phone functionality levels 101ISO standards 101Quality Management System - QMS 102

Foreign trade 102Credits 103

Solvency 103Algorithm for calculating interest 104Current credit 104Investment credit 104

COURSE MATERIALS 107SOME ASPECTS OF ECONOMICS AND ENTERPRISE 107

Factors of production 107Rules of a rational choice theory 108The market and the competition 108The market, supply and demand 109Types of business entity 111

COMPANY MANAGEMENT 113Management – definition, stages 113Mission, vision, strategy 114Planning and decisions: strategic, tactic and operational ones 115Organisational structure 116

PRODUCTION 118Production planning 118Production performance. 119Quality of production 120The degree of productive capacity utilisation 121

MARKETING 122Marketing, marketing mix 122Advertising campaign 123Advertising company 124Brand and logo 125Brand management 125Rights and obligations of seller and buyer 126Spontaneous and assisted brand recognition. 127Direct and indirect sales 128Sales documentation 129

Trade credit 131

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List of Content

Guarantees, warranties, complaints 132Interest rates 132Collateral 133

LOGISTICS AND TRANSPORT 134Principles of warehouse management 134Warehouse management 134Transport 135Freight forwarder 136Shipping lists 137The course of the transport process 137

HUMAN RESOURCES MANAGEMENT 138Training 138Remuneration policy 139The average wage 140Forms of employment 141Non-wage costs 141

A COMPANY’S FINANCES 142Fixed and variable costs 142Break-Even Point 143Current credit 145Investment Credit 146Foreign investments 147Leasing 148Financial statement 149

FIXED ASSETS 150Buildings and structures 150Land 151Transport 151Innovation and innovation management 152Know-how 153Protection of intellectual property 153

Investment and its funding 154Quality Management System 155Depreciation 156

LEGAL ISSUES 157Agreements and contracts 157Tenders 158Taxes 160

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USER’S GUIDE

GLOSSARY OF KEY CONCEPTS

Game

Step – The shortest time interval used for simulating the flow of time in the virtual world. The length of a step is a system parameter.

Period – A time interval which is a multiple of a game step, used to divide the time of the game into stages, after which settlings take place, i.e. salary payments or credit installments due. A number of steps happe-ning in a period is a system parameter.

Location – A unitary area among those dividing the world map. This is a spot on the world map.

Location type – A location feature characterising its properties, i.e. a trade partner, client, investment plot, wasteland.

Investment plot – A type of location which can be used by players as a con-struction site. At the beginning of the game there are players deployed on some of the existing investment plots, whereas the remaining ones are free and may be purchased by the players.

Building plot – A fragment of an investment plot, on which a player may construct a building. Each investment plot has a fixed number of free building plots, on which depends the value of a location.

Branch – A branch of a company is an investment plot belonging to a player, together with buildings and assets located there.

Organisational units in the company

Production department – An organisational unit which is responsible for producing phones. It is possible to have many production departments situated in various locations. Each production department includes

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a production hall building of a defined level of development and may have a staff consisting of a manager and fitters.

Own warehouse – An organisational unit of a company which deals with components and the storage of ready phones. It is possible to own many warehouses situated in different locations. Each warehouse owned inc-ludes a warehouse building of a defined level and may have a crew of warehouse people and a manager. In a singular location there can be only one such building. An alternative for owning a warehouse may be the rental of a storehouse.

Transport base – An organisational unit of a company allowing for the organising of the transport of goods. It is possible to own several trans-port bases situated in various locations. Each transport base consists of its building and a definite number of lorries. People employed there are a manager and drivers. An alternative for organising a company’s own base is the use of the services of a freight forwarder.

Marketing department – An organisational unit of a company responsi-ble for marketing activities. Specialists employed there work on incre-asing a brand’s reputation in a given country. After reaching a certain employment level, a manager has to be employed as well. An alternative for organising your own marketing department is using the services of promotion and advertising agencies.

Trade department – An organisational unit responsible for the activi-ties related to new customer acquisition. Trades people employed deal with broadening the range of their unit’s influence (range), which cor-responds to access to a broader group of clients. Established contacts result in the visibility of all biddings they organise. At a given level of employment, a manager has to be employed.

Research department – A company’s organisational unit responsible for innovation implementation into various spheres of its activities. Employed engineers fulfil ordered tasks, work out investment points, and represent their know-how level. An exemplary task of this depart-ment is increasing a functionality level of produced phones in a player’s company. At a pre-determined level, a manager will have to appear as well.

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USER’S GUIDE

Buildings

Administration building – This building is situated at every location of a player’s and represents the technological background. In the game, it is necessary as an element of navigation over and through the system.

Laboratory – A building which is the workplace for engineers from the research department. Its level determines the number of people who can be employed there and the maximum number of innovation points which can be produced in a single step.

Marketing office – A building which is the workplace of the marketing office employees. Its level determines the maximum number of people who can be employed there and the maximum number of reputation points which can be worked out in a singular step.

Production hall – A building where production processes takes place. Depending on the level of its development, it is possible to employ a definite number of fitters and by achieving different levels, of increasing the quality of the phones.

Trade department office – A building where employees of the trade department work. The level of its development determines the maxi-mum number of people who can work there and the maximum range of an organisational unit.

Transport base – A building where a player’s vans are parked and main-tained. Its level of advancement determines the number of vehicles and their maximum load capacity.

Warehouse – A building designated for storing goods- both components and ready phones. Storing processes connected with goods receiving and dispatch happen there. The level of its development determines the maximum storage space, which is precisely its capacity.

Business entities

Supplier – A business partner from whom players can purchase compo-nents required for phone production. Each supplier has a defined pro-duction capacity in a singular period and players use it by signing con-tracts for its supplies.

Mobile Phone Company (Client) – A business partner who players can sell mobile phones produced by them. In the game, mobile phone com-

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panies are clients. They need phones for individual clients of their own networks. Clients announce biddings in which they define the condi-tions of any supply contracts.

Storehouse – A business entity which may become a player’s partner con-cerning goods storage. It is possible to rent a definite storage space for a certain period of time. It is situated in a particular location, so it may entail organising transport to and from the storehouse.

Forwarder (Carrier) – A business entity from which vehicles can be orde-red and booked to transport goods. It is possible to rent vehicles to transport goods between certain locations. It has a specific location on the map, which influences the distance and realisation time of any given form of transport.

Promotion and advertising company – A business entity which can be booked to pursue particular advertising campaigns. A prime effect of any campaign is an increase of the brand’s reputation on the market in a given country.

Bank – A financial institution to which a player may apply to for either current or investment credit.

Human resources

Profession – A trained professional determines a company’s department/area in which a person can be employed. The exception is any unskilled labourer who has to be trained for any profession before they become employed. In the game, the professions are as follows: fitter, warehouse-man, driver, marketing expert, tradesman, engineer and manager.

Employee’s qualification level – The current level of a given person’s pro-fessional training. This parameter influences the effects of any employ-ee’s work, according to his or her function within a company (profes-sion). Raising an employee’s qualification level is possible through training processes.

Professional group – A group of people of the same profession and quali-fication level.

Fitter – This person can be employed in a production department. His or her training level influences the quality level of phones produced in a given department.

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Warehouse person – A person who can be employed in a company’s own warehouse. Their training level influences the degree of storage space use.

Driver – A person who can be employed in a transport base. His or her qualification level influences the capacity level of the lorries available in a transport base.

Marketing expert (marketer) – A person who can be employed in a mar-keting department. Their qualification level influences the process of enhancing a brand’s reputation on the market.

Tradesman – A person who can be employed in a trade department. Their qualification level influences the maximum use of a given trade unit’s range.

Engineer – A person who can be employed in a research department: his or her training level influences a department’s pace of work.

Manager – A person trained for managerial positions in a company. After reaching a certain level of employment, each organisational unit must employ a manager in order to be able to employ new staff. Any manage-r’s training level determines the maximum number of people whom he or she can be in charge of (a variable value, depending on the organisa-tional unit type).

Production

Phone – A ready product manufactured by player’s company. Each phone, independently of the location on which it was produced, is described according to common characteristics: quality and functionality level. In the game, phones are often marked with a symbol i.e. T-2D, where a number (in this case 2) means a phone level (the bigger, the better) and a letter (here D), which stands for a functionality level (the earlier in the alphabet, the higher functionality).

Components – A material necessary to manufacture phones in a produc-tion department. Each set of components is treated as one material item sufficient to manufacture one phone. Components have different quality levels. This parameter influences the quality level manufactured from given components. In the game, components are marked with symbols, i.e. P-3, where a number (in this case 3) signifies components quality level (the higher the better).

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USER’S GUIDE

Location of production – Location of a production department and rela-ted infrastructure (warehouse for components and ready products).

Quality Management System QMS – A set of procedures, which imple-mentation in a given production department enhances a quality incre-ase factor of manufactured phones.

Production plan – Components used for phone production may be of dif-ferent levels of quality. Therefore, players can formulate rules defining a sequence of sending components to an assembly line, on the basis of their quality parameters. Specification of production pertains to a ware-house’s resources, which is situated in the same location as a production department.

Transport

Lorry – In the game, a lorry is used for transporting goods. Depending on the transport base development or the type of freight forwarder, it may have various capacities. Its speed is constant and depends on a system parameter.

Route – The route of a particular transport transit. It starts and finishes in a base to which any lorries are prescribed. A route consists of smaller units called transits. The time of completing the route depends on the total length of all these transits and the vehicles’ speed.

Transit – A singular interval on a transport route with a defined starting point (a load point or a starting point) and the final one (an unloading point or the destination).

Transport – A process of transit of goods along a defined transport route which were declared in a shipping list.

Shipping list – A definition of the quantity, kind and characteristics of goods which are to be transported within a given distance (transport). If transport takes place within a contract, there is additional information on the number of this contract.

Innovation

Points of innovation – Is a unit representing a know-how level which is an inevitable requirement needed to make certain investments in inno-vation (such as building development, QMS implementation). In the

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game, the organ responsible for points procurement is the research department, although there is also an option of buying them in.

Trade

Brand reputation – A feature characterising a player’s company and the conditions of his or her participation in a given bidding. An adequate level of reputation in a given country is a compulsory condition in bid-ding. A reputation level may be influenced by the purchase of a promo-tion and advertising agency or the development of a company’s own marketing department. The reputation level in the game automatically falls as the time flows.

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KEY CONCEPTS OF THE GAME

Introduction

The Simulation Enterprise system is an Internet application simulating realities of the contemporary market within the business realm. Games take place in the virtual world and reflect the basic rules and dependencies existing in the business world.

Virtual world

The world in which the game takes place has its geographical properties. It is all divided into locations, each of which is situated in a given country and has its geographical co-ordinates. At the start of the game, all the busi-ness entities which require their headquarters are automatically located on the map. These are the players’ companies, clients, suppliers, warehouses and transport companies. It means that each company receives an invest-ment plot on some country’s territory and, therefore, access to trade part-ners existing in a particular country. In order to enter into any partnership with foreign companies, a player’s company will have to establish a branch in a neighbouring country.

Distance between locations

The distance between locations is important, particularly in the con-text of the organising of transport. It is calculated as the round-off distance between points in Euclidean geometry to the natural number. Therefore, for a location with the co-ordinates (x1, y1) and (x2, y2) the distance is expressed with the pattern:

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Time in the game

In the game, time runs in a constant manner. Its flow is measured in units called steps, the length of which can be modified by the moderator. The bigger unit applied is a period, which is a multiple of steps of the game. Notions of periods and steps may be respectively identified with months and days in the real world. In the game there is no equivalent of a year.

A number of steps expresses the time which particular processes take (i.e. building construction or employees’ training). Moreover, the consequ-ences of some of the decisions taken by players within a given step result in particular consequences after it (i.e. newly employed personnel begin working in the following step).

At the end of each period, some operations are automatically genera-ted, and these are: remuneration execution, building maintenance or credit repayments.

The moderator of each game can either start it or hold it. If the game is currently in hold, it is impossible to undertake any operation. A player can solely have an overview on the company’s current condition.

Players’ companies

Players play the role of owners of companies producing mobile phones. Their task is to start and develop their companies in the reality of compe-tition with other enterprises of a similar profile and run by other players. Competing on this difficult market requires a skillful management of the company’s potential and resorting to co-operation with trade partners.

The basic chain of dependencies, which the companies managed by users participate in, is based on components procurement, phone assem-bling and the sale of finished products to their clients. It is also connected with the necessity of a suitable storage management organisation, transport logistics and trade. The changing market requires investing in new techno-logies.

Depending on the adopted strategy in given quests, players may decide to expand the organisational structure of their own company or use servi-ces offered by their trade partner operated by the system.

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Subject of the market

The object of the game’s simulated market is mobile phones. Each one is characterised by two features: quality level and functionality level. Phone quality is defined as the robustness of its performance and durability, whe-reas functionality describes the phone’s capabilities offered to users.

A player’s company has all the tools to influence both these characteri-stics. The quality of the phone depends primarily on the quality of the com-ponents used in its manufacture. Depending on the level of the training of the research department employees, it is possible to improve the quality of the relevant terms of the level generated phone-quality components. In order to obtain durable a phone, you can either buy higher-end compo-nents, or invest in the skills of the workers. The functionality of the phone corresponds to the level of the technological advancement of the company, so the increase of this feature requires the work of the research department and a significant number of points of innovation.

Goal of the game

The goal of the game is to achieve the best financial results of a company at the end of each game.

The source of the companies’ revenue, which the owners are embodied by the users of the simulation, is the sale of produced phones to clients, on the basis of a signed contract. Companies have to cover the costs of their business activities, which include remuneration for employees, building maintenance and fees for partners’ services. Additional costs consist of the purchase of components and instalments of potential credits.

A lack of financial liquidity will result in the necessity of cost reductions or the winning of additional, external financing sources, i.e. credits. If pre-ventive means, such as sale of assets or providing bank financing, does not meet with current obligations, then the company must declare itself ban-krupt. Bankruptcy takes place if, at the end of a period, a player’s company has a negative account balance and the situation is repeated in the next period. In such circumstances, all the employees are fired, contracts can-celled and the system calculates the final assets of the company. For other players it may imply a significant turbulence on the job market and partial release of trade partners’ resources.

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GAME ORGANISATION

A person responsible for establishing and conducting the game is a moderator, i.e. a teacher. While preparing a game, he or she may choose a world map and a scenario. When the game is published, a “Starting” phase begins. At this stage a user, i.e. a student who has an account in the application may declare his or her willingness to participate in the game. After the players list is completed, the moderator may activate the game. At this point the game is ready to be started.

Each stage of the game may be started and stopped repeatedly, i.e. during forthcoming classes. The moderator is in charge of the process.

In the system, the appearing game states are the following: Preparing, Starting, Active, Stopping, Stopped, and Finished.

If the game is active (or stopping), there is an option of entering the application and working with it. If, however, the game is stopped, time is not passing, which means that entering it allows solely for checking the condition of a company, without the possibility of implementing any action. From then on, the only possible action is an overview of the results.

After entering the module called “Game”, users can see a list of games which they are participating in and new ones, which a user can enroll in. A proper filter quickly allows finding a required stage of a game.

Moderator’s module in brief

Only users having special permissions, have access to the moderator’s panel. This part of the system enables creating a new game and having con-trol over games that happen in the game world. Furthermore, the modera-tor’s panel consists of different tools which help to create different variants of the game – scenarios and maps.

Each moderator should first familiarise him- or herself with the instruc-tions contained in the game description, such as those presenting the holi-stic concept of the game and the mechanisms used for simulating processes connected with running an enterprise.

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Game management

After entering the moderator module – a list of games is the default display screen. On the right side of the screen there is a simple menu, which enables moving to other options from this module.

List of games

The list of games contains only those games, in which a logged-in user is set as a moderator. On different lines there is a number and the name of the game, date of its creation, scenario name on which each game was based, and the status of the game.

In the last column, options for management of the game are available. Depending on the game status, actions which take place here can differ.

Status of the game

The system offers couple of statuses. The meaning of each is presented in the table below:

Status. Description. Possible actions.

Preparing. This is the first status which is given to a newly created game.

Details, edit parame-ters, open the game, and delete game.

Adding players.

This is the second status during the preparation of the game. On this stage players are being connected to the companies, which will be led by them.

Details, add play-ers, activate game, and delete game.

Launched. The game is running. Time in the game goes nor-mally and all actions are available for players.

Details, stop the game.

Is being stopped.

The moderator requested stopping the game. At the end of current game step, the game will be stopped. Details.

Stopped.The game is already stopped. Time is not pass-ing, players do not have any possibility to make any moves and do anything.

Details, launch game, and delete game.

Ended.

The moderator has ended the game. There is no possibility to launch the game one more time or to enter to game world. Only results, achieved by the player’s companies, are available.

Details, and delete game.

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Creating a new game

In order to create a new game, click on “Create a new game”, available at the bottom of the screen. After clicking it, a player is forwarded to a form, with the view of being added to a new game.

During the creation of a new game, moderators have the possibility to set the value of many different parameters, responsible for control – e.g. passing the time in the virtual world, the world map, the number and cha-racteristics of trading partners, the parameters of all organisational units, buildings or professions. In order to make this task easier, and to enable the use of a different set of parameters for a couple of occasions, these are saved as scenarios (management of scenarios is described in a further para-graph). At this stage of a new game creation, the moderator has to choose a concrete scenario, on which the new game will be based. To do so, the “Base scenario” section in the form should be used.

In the second section of the form, there is a place for filling in the name of the new game. The name should be unique and should describe the group of players (e.g. 3rd Vocational School, class 2a – game No, 1). Thanks to this, it will be easier to search for this game in the future.

Accepting the filled in form can be done by clicking the “Create game” button. If there were not any problems during the process, the screen, with the details of the newly created game is displayed. During preparation of the game, the system gives the status of “Preparing” to the game, and assi-gns a unique number, that players can use in many different sections of the application.

The next step of the game creation is its opening. Before doing it, the moderator can make changes to some parameters of the game. This is possible after clicking on the “edit parameters” button. Presented here is a form which helps to settle the number of trading partners of each type, and which of them should be placed where in world map.

Opening a game is an action, which changes the game status to “Adding players”. This operation can be done by clicking on the option “Open the game” and confirming this decision.

A game having the status of “Adding players” is visible for all users – on the list of games in the “World game” module. Players can, thanks to the option “Join” sign in for joining the game, and the moderator can accept submissions and assign a concrete company in the game.

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Assigning players is realised on the screen which is available only for the moderator. To enter this screen, the moderator should click on the “Assign players” button available both on the games list and in the details of each game.

The screen which shows the assigning of players to the game consists of two components. On the left side there is a list of companies (that do not have concrete names yet) – the number of them is strictly connected with the parameters of any given scenario. For each company there is a section for assigning a player/players. To do so, the moderator should click on the assigned player and click the “Confirm” button. Cancellation of an assign-ment is possible after clicking on the “disconnect” button.

On the right side of the screen there is a component presenting a list of users willing to play, and waiting to be assigned. Due to the fact that this list can change (new players willing to play appear), the form contains “refresh” button. After clicking on this button, most updated data are presented.

It is not obligatory to assign players to every company from the list. A moderator can end the assigning process at any and every moment through activating the game. The option “Activate game” is available on the screen with a list of games, or from the screen with details of each game. It appears only when at least one user has been assigned to any company.

Activating any game is an action, which changes the status of the game to “Launched” or “Stopped”. The decision on whether the game should be launched immediately (it will have the status “Launched”), or just be activated (it will have the status “Stopped”), is made by the moderator, using the screen of making decision, which appears only after clicking “Activate game”.

Commencing game

If, during activating the game, the moderator has decided to launch it automatically, a game starts immediately. But if he or she had not deci-ded to launch it yet, a game can be started at any moment after clicking “Launch game”.

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Controlling the game

The screen with game details on helps the moderator to become familiar with: the current game’s status (its status, current date, number of compa-nies, etc.), the situation of each company, and interfering with the game (to some extent).

The basic operations concerning control over the game, which can be done by the moderator are stopping and re-starting the game (e.g. at the beginning and at the end of the lesson).

If the game has been stopped, entering into it enables players to fami-liarise themselves only with the current scores of each player. All processes are stopped and no decisions can be made. When the moderator re-starts the game, all functions are now available again.

If the player does not participate in the game that is running, all pro-cesses in his or her enterprise are running, moving forward. A company without any proper control and planning can easily become bankrupt.

Interfering with the game

During the game, the moderator can interfere with some aspects of the game world. Options of interfering are the following:

Operation. Description.

Adding money.By using this option, the moderator can transfer to the bank account of a concrete company or take from this account (by giving minus value) any amount of money.

Adding points of innovation.

By using this option, the moderator can have an influence on the number of points of innovation, which are possessed by each company.

Adding points of reputation.

By using this option, the moderator can have an influence on the number of points of reputation, which are possessed by each company in a concrete country.

Adding bidding for phone delivery.

If necessary, the moderator can manually generate new calls for biddings (with different parameters).

Adding workers to the labour market.

If necessary, the moderator can change the number of unemployed from each profession on the labour market of each country.

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Adding player.

By using this option, the moderator can assign a new player to the game, after the game has already been launched. Mar-king this player is done by entering his or her login into the system. Then the name of the company is given and starting company status.

Player withdrawal. The moderator can withdraw any player. The procedure is the same as for when bankrupting.

Company name change

If it is necessary, the moderator can change the name of a player’s company.

Note: Every time the moderator interferes, he or she has to make a com-ment on all interferences, which will be presented to all players.

Ending the game

If the moderator has decided that the game has come to an end (e.g. the end of the semester in the school), and will never be re-started, he or she should set the status “Ended”. From this moment on, the game is archived and the only thing that can be done by the players is to see the results of each of the companies that participated in the game.

Scenarios management

As has been mentioned previously, the moderator is responsible for configuring the starting parameters of the game. Taking into considera-tion the large amount of indicators that have to be settled at the beginning, those settings can be saved as a scenario.

A list of scenarios is one element of the moderator’s module, available in the main menu on the right side. By default, this list contains model scena-rios and is created by a logged in user.

In the system, there are a couple of basic maps and they are connected with model scenarios. It is advisable to create new games on their bases; nonetheless, each moderator has permission to introduce changes and then saving them as a new scenario.

Each scenario should contain an extended description, which will be presented to the players. The aim of it is to introduce the virtual world’s characteristics (and the parameters) to players.

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Scenario edit

In order to change the values of each parameter, firstly, any new sce-nario should be created through copying all the values from one of the model scenarios and giving a new name. This can be done by clicking on the “Create a new scenario” button, which is under the scenarios list.

To edit any newly created scenario, the moderator should click on the “Edit” button – this option is not available for model scenarios.

Taking into consideration the huge amount of parameters that describe virtual game world, there are many editing screens divided thematically and arranged in a proper order. It is possible to jump into a concrete sub-ject, using next/previous buttons or by selecting an element from the menu.

Parameters that can be edited have been divided into the following screens:

• Basic parameters.• Global parameters.• Production and supply.• Production and supply area.• Transportation.• Trade. • Marketing.• Investment.• Finances.• Managers.• Companies of other players.

Maps list

In the moderator’s module, there is a possibility to search the list of ava-ilable basic world maps. The application does not show the mechanisms of defining the maps by users.

The virtual world, moderated by the system in each game, is built on concrete maps. Any map defines the division of the entire world to loca-tions of different types, their assignment to different countries, border lines and the number of plots. A game map has a specific size and characteristics, such as: maximum number of players and types of trading partners. These

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limitations result from locations prepared on the world map, on which it is possible to place different companies and trading partners.

Action. Moderator. Player.

1. Players list > Add player.

2. - Fill form> save.

3. List of games> Create a new game.

4.- Give a name. - Select the base scenario. > Create game.

5. Option> Edit parameters.

6. Open game > confirm. GAME > find your game> join.

7. Assign players. Message: Please wait for start of the game.

8 .

Assigning players: company 1 > assign player....> Confirm.

Message: The moderator assigns player to game.

9. > Back to game details.

10. Game details> activate game> Con-firm.

Name your company > OK> enjoy !

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DESCRIPTION OF THE GAME INTERFACE

Joining the game

List of games screens

The main screen of the game is the ‘List of games’. It screens all games made available by the moderators in ‘starting’ and those which a player already participates in. The list has an option of filtering by the number of the game, its name, the name of a scenario and its status.

Each game has an option of viewing its description and joining new games (or joining in those which have already been started).

Game description screens

A player willing to obtain the basic information about the game can open the description screen. It includes data on a number of registered players, created companies, as well as map and scenario descriptions.

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Joining the game screen

When the moderator publishes the game, players can declare their wil-lingness to participate in it by clicking on the “Join” option on the line of game in ‘List of games’.

After joining the game, the screen of what is pending for the moderator’s decision will appear; this will display people participating in the game. Any player will also have an opportunity of leaving the list of pending requests (‘Resign’ option), which is equivalent to withdrawal from the game.

When the player is prescribed to a company, he or she will receive a notice about the game moderator’s decision. The moderator assigns the player to a company.

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Players can always go back to the list of games (‘Back to the list of games’ option), though they must take into account the possibility of the moderator starting the game.

Navigating the game

Efficient navigation in the game is one of its key elements, because all activities concerning running a company must often be performed quickly and efficiently.

World map

In the game, the area is depicted as a section of the bigger whole. This section is divided into locations which may either remain empty or be taken over by branches of the players’ companies and partners.

In the central part there is a section with various objects placed on it. The objects may represent company branches (also branches of com-petitors), partners, investment plots, and borders between countries, and „Ornaments” (fallow lands). Some objects (partners, investment plots, and your own company’s branches) can be clicked on to navigate to a desired screen. If there is a need to learn something about an object, it is enough

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to move the mouse cursor on it- there will appear a ‘balloon’ with the most desired data. The selected objects (i.e. by a click on various links ‘Show on map’) are additionally marked with a red arrow.

The whole section may be manoeuvered by clicking on arrows located on its edges. One click moves the map 5 units forward in a given direction. Because the area of the map is limited, arrows are not displayed when a move is not possible. Manoeuvering the section does not cause a page to overload.

On the right, just next to the map, there is a legend helping to quickly identify objects on the map. Above it, there is information about which country the central location on the map belongs to.

Under the map, you can see a form which allows for quick navigation to a selected location. Simply enter the appropriate co-ordinates (their valid range is provided under the form) and press the green button with an arrow. The move on the map does not cause a page to overload.

Legend

The legend, apart from its informative function, enhances the process of navigation. Partners, investment plots and branches of other players’ com-panies have a button which expands the proper list. It includes a list of all typical objects in the world, together with information about which coun-tries they are located in.

If it is possible to navigate to an object screen (i.e. it has a foreign branch), then its name is a link to this screen. On the left side of each entry there is an icon shown on the map. By clicking on it, it is possible to navigate to a fragment of the world which shows the central location of the object on

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the map. If the object is located close to the edges of the world, then this section will be centred (the section is always of 5x5 size), but still marked with a red arrow.

The list of objects in the legend might be hidden by a click on a rolling button or the expanded strip (a lighter layer).

Quick navigation bar

A quick navigation strip really helps in efficient navigation between important screens of the game. It is always visible between the menu and console messaging.

As you can see in the picture, it is possible to quickly navigate between branches of the company owned, the organisational units and available partners, from the level of the bar being discussed.

On the left there is a component facilitating navigation around a play-er’s own company. Its main element is the choice of a branch, because others are dependent on it. Two icons on the left side of the chosen ele-ment respectively show the chosen branch on the map and the screen of the selected branch. On the right there are visible icons of the organisational units established in the selected branch. A click on one of these transfers the desired unit to the screen.

On the right side of the quick navigation bar you can find icons of all possible partners. After a click on a proper icon, the list of all available partners of a chosen type (from the countries where a player has his or her branch) expands. This list includes information about the name of the part-ner, its country and the distance from a branch selected from the left side of the quick navigation bar. Additionally, there is the possibility of viewing a given partner on the map.

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QUICK START

Joining the game

After logging in, enter the “Game” module.

From the list of games available, choose the one you want to join in.

Next, by clicking the “Join” button, enter the screen of those waiting to start the game.

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After starting the game, you will be asked for the name of the company you will run. The name of the company will be present to the end of the game, so it should be well-thought out. It is worth choosing before.

Getting familiar with the environment of the company.

After confirming the name of the company, you will be directed to the world map module.

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The first action which should be taken after starting the game should be getting familiar with the environment of the company. Great attention should be paid to the surrounding contractors, where the closer compo-nent supplier or mobile phone companies are located. The most intuitive way of getting familiar with the environment is an exploration of the world map. There is also a quicker way of gaining information by the contractor lists, which include information on their distance from your company.

Organisation of production.

After you obtain information about the environment, it is necessary to organise a production department. In order to do so, you go to the screen of the company headquarters by clicking on the company building on the map, or by the quick navigation bar.

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You are to start building a production department and a warehouse, which are necessary to start production. To do so, you click on a building plot and choose „Production hall” and then „Build” from a building form. This activity is to be repeated, though as a choice of a building, you are to point to „Warehouse”.

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Building construction will take a particular time. Both on the depart-ment and building screens there will be information on a construction completion deadline.

Winning the first contract

In the meantime, while your buildings are being constructed, you can start to get your first contract, which will provide you with an income in the game. You can get into the bidding list in two ways. You can search for a particular mobile phone company on the world map and bid for a contract, or use the “Biddings” screen and see all the biddings available to you. The second option is more effective, because it offers a broader perspective on current offers on the market.

One should pay attention to the bidding parameters while looking at the list. The most important ones are the price of a phone, its minimal quality, and functionality. These three elements mainly determine a given bidding attractiveness. Though in the beginning, you will deal with phones of “1”, quality, and “F” functionality—so the weakest ones.

Also, other parameters which are important are the „Completion date” and „Quantity”. It is important to take these into account while planning actions, inasmuch as the production capacity of the production depart-ments, which can manufacture a limited number of items in a singular step.

After choosing an interesting “Bidding”, you can bid for a contract.

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At bidding for contract you should remember that there are also other companies which can compete with you at a given bidding, which you should take into account when making an offer.

After the bidding results are announced (the deadline for bidding for each and every contract is provided for each one), you will receive a console message informing whether or not you have won a given bidding.

If you did win, a contract with a mobile phone company will appear on the „Contracts” screen.

Contract execution

In order to be prepared for the execution of the contract, you must first employ staff for the newly built production hall and warehouse. Subsequently, it is necessary to take care in supplying components of a given quality to start the production of phones.

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In order to employ staff, you enter the organisational unit „Production department”. This is possible by means of a department overview, and a click on the production hall building, or by using the quick navigation bar and a click on the production department icon.

You click on the action of „Employ workers” on the organisational unit screen.

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You repeat the same action in the „Warehouse”.Now you have to order components from a supplier. In order to do so,

you have to search for a contractor who offers those of 1 quality (prefera-bly such as the one bid for.) You can do this through the map or the quick navigation bar.

After finding the required supplier, you can order components.

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You choose a period and a quantity of components which are not lower than the one bid for. Subsequently, you click on the „Check availability” button. If all parameters of the contract are proper, the information on the availability of materials and an order button will appear. After you click „Order” the contract with a supplier is be signed.

Having employed fitters and components, the production department starts producing phones. To complete the contract, you only have to supply the phones to the client. Insofar as you do not have a transportation base, you will have to hire a freight forwarder. Therefore, you search for the clos-est one. Like in the case of a supplier, you can do it by means of the map or the quick navigation bar.

After choosing a contractor who lives up to your expectations, you order from him or her a transit from the company branch to the client.

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In order to organise transport, you must define the amount of the goods and specify the departure and destination points. The next important step is to pinpoint the loading date. It is extremely vital because on this day you have to organise the required quantity of phones in your warehouse. After introducing all the data, you click on the “check availability” button. If the transport is possible, there will be information on the availability and the transit schedule. Otherwise, a notice on a lack of availability will appear. A lack of availability usually results from an inappropriate date of loading. After an unsuccessful check-up, the system itself should provide you with the closest available terms.

To complete the defining of the transport, you have to compile a ship-ping letter. To do so, you click on the shipping list option. In the case of a transit between your headquarters and a client, the shipping list is based

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on the choice of the processed transport and specifications concerning the type and quantity of phones you want to withdraw from the warehouse.

After defining the shipping list, you can relax and wait till the transport reaches its destination, and you will receive a lump sum of money from the contract.

Further development of the company

Processing the first contract is only the beginning. As it becomes clear what can be earned, based on in the world of mobile phones manufac-turer, it is necessary to think about forthcoming contracts, the company’s development, investments and other areas of activities which will help to achieve a maximum profit from the selling of your products.

Company branch screen

The screen describing a given branch of a player’s company, presents a kind of magnification of a singular part of the world map. It also includes a list of organisational units which have their headquarters in this loca-tion, together with providing their basic parameters. Below, there is also a component showing the values of factors describing a given branch, such

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as being assigned to a given country, its parameters on the world map, the quantity of building plots and their value.

An empty, newly bought investment plot includes several free building plots. A player decides on the ways of its exploitation. Particular building plots in this location will be taken over by buildings belonging to organi-sational units. From the moment of its purchase, one of building plots is automatically taken over by an administration building which represents the workplace for managerial staff and administration.

Furthermore, a company branch screen has the option of changing its name.

New buildings

It is in this view where all the operations related to constructing a new building take place. In order to start construction of a new building within a company branch, a player should click several times on the field represen-ting a free building plot.

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Then, a window appears containing the form which allows you to choose the type of building which is to be constructed there. After a player opts for a particular building in the checkbox, the system will display information about cost and time of construction and parameters of the factors descri-bing the new building. A click on the “Build” button starts the construction process.

When a company is already entitled to take loans, the form will include additional options allowing for an attempt to finance a given construction by the use of an investment credit.

Organisational units’ screens

Common elements

Every organisational unit is run from the player’s own control screen, although each one of a given type looks the same. Besides which, there are always basic elements in the views, describing particular organisational units.

Available actions

Actions available in every screen of an organisational unit will be shown, with a warehouse as an example.

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Each screen has an icon representing a type of a unit (3). Above there are basic actions (1):

• Transition to the screen view of the branch.• Hiring new employees.• Hiring manager (if there is no such employee).The screen presents information about the current level and state of the

building (2), and provides a share of its upgrade and downgrade.

Clicking on “Employ workers’ opens the form in which the user should indicate the professional group which wants to hire workers.

The list of the professional group selection includes immediately available infor-mation about the number of unemployed people in the profession. After choosing a profession, on the right there is information provided about the parameters that describe it (the cost of wages, the factors of efficiency). In the second field of the form

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you must indicate the number of persons to be employed. Hiring a manager is associ-ated with completion of an identical form.

Optional expansion of the building is available, provided that the buil-ding has not yet reached the highest level. Clicking on it opens a form in which the player introduces his or her decision.

There are the parameters associated with the development, such as its costs and duration, as well as factors obtained for building on the next level. Clicking on the “Upgrade” button starts the process. If sufficient time has passed since the start of the company, there will appear in the “Upgrade” form, options associated with the possibility of an attempt to obtain an investment loan for this purpose. When you are willing to use this option, you must mark the credit checkbox. In such a variant, a click on “Upgrade” will evoke an attempt to obtain additional credit on the terms presented on the form (interest rate and loan period). If the bank agrees, the process is progressing well, and if it does not agree, there will a return to the form.

As in the case of expansion, clicking on the action “Downgrade” opens the form in which the player’s decision is required. It provides all the infor-mation about the building’s factors after decreasing its level.

Factors

On the right there is a section showing the values of basic factors descri-bing a given organisational unit and information about the costs of remu-neration and building maintenance which a company has to bear in every period.

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Employees list

The list of employees looks the same on every screen and is presented below, with an example of a warehouse.

The list of employees presents the numbers of people employed from particular professional groups, together with information about their achieved efficiency and salaries. In the ‘Amount’ column, additional information may appear. Apart from the number of currently employed staff from this group, there will be numbers of those newly employed, fired or under training. The ‘Percentage’ column of active employees provides

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information concerning the number of people from a given professional group effectively participating in doing their job.

The last column describes actions which may be taken concerning a specific professional group. The first option is ‘Discharge’. After a click on it, a form appears in which you must define the number of members of staff fired. It must not be greater than the number of those currently employed. The second option is ‘Training’. After it has been clicked on, there will appear a window with a form which includes information about the factors which an employee will get after training and what his or her future salary will be. The form requires entering the number of employees who will be sent to training.

On the right you can see a graph displaying the number of employees, divided according to their qualification level.

Employment state

A graph of the employment state is shown, with a warehouse as an example.

Right next to the picture of an organisational unit type, there is an ele-ment presenting, in graphic form, the current employment limits in a unit. It provides information about the limit stemming from the number of job posts (a building’s development level) and the one resulting from a mana-

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ger’s qualifications. If a manager has not been employed yet, there will be a limit describing at which number of employees he or she is necessary. When limits in the unit make the work of some employees impossible, information about such workers is highlighted in red. Particular colours stand for:

• Blue – the number of workers currently employed.• Green – the number of workers who could work effectively if

employed.• Red – the numbers of workers who cannot work effectively because

the manager’s qualifications are too low.

Production department

The screen of the production department, apart from elements com-monplace for each organisational units, provide players with an option of previewing and influencing the process of production.

Factors

Particular factors added in the screen of production department signify:Factors. Damage.Effective production capacity.

Specifies the number of phones that the department is able to produce in the current step of the game, taking into account the availability of components. After the slash, there is the number of phones which can be efficiently produced by the working fitters.

Quality improvement factor.

The quality improvement factor determines which percentage of components quality used in the production will constitute the level of phones produced out of them. If the ratio is less than 100% this is not taken into account. Its current value results from employees’ qualifications, whereas the one after the slash is the maximum value stemming from the building level.

Quality improvement factor.

The number of components in a support warehouse.

Quality management system.

This factor shows whether the department has already implemented the Quality Management System.

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Support warehouse state.

For proper functioning, each production department requires a ware-house in its location. It is used as a support warehouse; it serves to collect components and the storage of newly manufactured phones.

The screen of the production department includes a list of goods which are currently stored in a support warehouse, which allows the player for a quick check-up of the quantity and quality level of available components. It is an element of ‘Support warehouse contents’, which additionally enables an easy transfer of information to the screen of the warehouse.

Production plan.For the needs of a production process, a certain amount of goods is

withdrawn from a support warehouse at each step of the game. When there are components of various quality levels available, the decision which ones will be used is based on the current plan of production. In the game, play-ers can regulate the production plan settings by indicating the sequence in which components are to be used.

The production plan is set independently for each production depart-ment. The element which serves for editing it is therefore in the window of a given production department.

The sequence in the ‘Components quality level’ column determines which components will be used in a production process first. It can be modified by means of arrows in another column. They allow for moving each entry from one field, or immediately to either the top or bottom of the list.

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Own warehouse

The screen of your own warehouse, apart from elements commonplace for each unit, enables players to see the list of goods currently stored in the warehouse, planned receiving and dispatches, as well as a forecast for the warehouse use in time.

Factors

The factors of you own warehouse display both the effective and free space:Factor. Meaning.Effective storage area.

Specifies the number of units of storage space that the unit operates efficiently. This value depends on the use of the maximum area of a building to which a value is given after the slash.

Free storage area.

Currently free storage space that remains after taking into account the limit and the actual quantity of goods in stock.

Warehouse contents

A component representing warehouse contents is a chart in which sub-sequent entries correspond to particular kinds of goods which are cur-rently being stored in the warehouse. After providing the type and techni-cal parameters of each one, a player is presented with information about the quantity.

For particular entries there is a ‘Utilize option, and a click on it opens the window’s form. In order to destroy goods you must define the amount which is to be removed from the warehouse and confirm it with clicking on the ‘Utilise’ button.

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List of planned receiving and dispatches

The component presenting the list of planned receiving and dispatches is a chart which entries describe planned transport to or from a given ware-house, if a date and a brief summary of content have been given.

In a column, a Content entry is marked with the letter “T”, which stands for phones, whereas the letter “P” pertains to components. Numbers appearing after the hyphen mark the quality level, whereas letters describe the functionality level. In the ‘Content’ column for entries, where the text is written with green type there is a click option and a shipping list edition. In the last column, there is a ‘Details’ option providing information about the whole course of transport.

Use of storage forecast

The following steps of the game are provided with a summary number of components (blue column) and phones (golden column). A total number of goods stored in the warehouse at a given step of the game is marked with green. It is all crossed by a green line corresponding to the predicted limit of a storage space at a given step of the game.

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For previous steps, the data on the graph show information which has already been confirmed, whereas for steps which are yet to come there is a forecast based on the list of receiving and dispatches known.

Transport base

The transport base screen, apart from elements commonplace for other units, enables players to plan and view transport, together with shipping list editing.

Factors

Particular factors added to the transport base screen mean:Indicator. Meaning.Number of vehicles.

The number of all lorries in the transport base. It is equivalent to the number of active drivers.

Effective capacity of vehicle.

This indicator presents the load capacity of a single vehicle which can be handled by the currently employed drivers. The maximum capacity of one vehicle is given alongside.

Available vehicles.

Then number of currently available (not on route) vehicles in the transport base

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Transport list

From the level of transport base screen, a player can view the list of all scheduled transport.

In the first picture you can see an exemplary list of planned transport. The list shows basic data concerning transport, such as an ID number, date of departure and arrival at the base, the number of lorries used and infor-mation about whether a given transport has already started from the base. Additionally, there is also a brief description of the transport route, with an option of navigating to its points. If there is an ellipsis between them it means that the transport route includes more than two locations and only the first and the last one are indicated.

There is an option of previewing transport details, its current state and defining their shipping lists (only if the transport has not got to the first loading point yet). It is possible to cancel transport before it starts off from the base. Additionally, there is an option for a new transport order below the list.

Transport order

In order to transport goods between locations, it is necessary to set up new transport. After clicking on the ‘Add transport’ option, there will appear a window similar to the one below:

First of all, the maximum quantity of goods to be transported on any single part of the route should be defined. It is the basis which determines the amount of vehicles that should be used to transport goods.

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Above all, you must define the transport route by providing its following transits. Every transit contains the load point and unloading point. A load point can be a warehouse (you must select a branch with a warehouse) or a storehouse which the company has a rental contract with. The unloading point can be a warehouse (on the same conditions like for a load point) or a client the company has a signed a contract with for phones supply. The route must include at least one transit. In order to add the next one, you must click on ‘Add carriage’ button. If there are to be more than one carriage, there is a ‘Delete’ option, which after being clicked on removes the last one.

Finally, you have to locate the whole transport by providing the step of the game, in which the carriage will be loaded or unloaded.

After defining the data, you must check whether a transport base is able to carry out such transport in the required time, by a click on the ‘Check availability’ button. If not, an appropriate notice t will appear with a suggestion of the earliest date available, which will be automatically registered into the form. Then you must click on ‘Check availability’ again, in order to investigate the new data.

If the transport can be done, the right side of the window with the form will be supplemented with new information, summarising the new trans-port.

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In the picture there is a designated route with dates. Points selected from the form are marked with green (you may go to a given location by a click). Grey spots represent a transport base which any lorries belong to. This example shows that a transport base is in the same location as a warehouse of the first (and only) load point. Between locations there is information about the distance, time it takes an arrow which represents the carriage defined in the form. If there is no such arrow then the chosen carriage was automatically added in order to preserve the route liquidity.

Under the chosen route, the remaining details of the transport will be presented: the number of lorries needed to conduct the transport, a maxi-mum load capacity available for each carriage and the whole distance and time of the transit.

If all the information is convergent with the needed transport, you can click on ‘Set the transport’ button, to order the transport. Otherwise, you can still change the data and repeat the check of the form, until obtaining the desired information.

Shipping list

After ordering the transport, it is necessary to define which goods, and their quantities, are be shipped. The shipping list is edited in a window similar to the one below:

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On the right the details of transport are displayed (they are the same as the procedure for checking the availability of transport). There is a form to edit the shipping list for each part of the route on the left (in this example, there is only one part of the route).

Thanks to the ‘Add components’ and ‘Add phone’ buttons, you can add further positions to the shipping list. You must determine the quality and quantity of the components. Phones need to provide quality (numerical value), functionality (literal value) and quantity. The consignment note shall specify what is to be transported. This requires the player’s comments and knowledge of their inventory. Option to facilitate the organisation of transport is to select the checkbox “Or better.” This will allow for an indication of the minimum required quality and functionality of the telephone systems and components that you carry. The shipping list presents many types of components and mobile phones. It should be remembered that this has a certain capacity (given on the right in the details of the journey), so for each section, the sum of the amount cannot exceed the limit.

The ‘delete ‘button removes the last item of that type (or mobile components) in any section of the route.

In the case of the carriage of goods to customers, in the shipping list you have to identify what is to be carried (in whole or in part) with that trans-port. Then, just before the option for setting the letter appears, a form pops up, the elements of which allows you to choose the contract. After selecting the contract, you press “Process contract» button in order to automatically fill the shipping list.

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Transport details preview

There is an option of previewing details of a planned transport. After a click on ‘details’, in the transport list there will appear a window with various information about the transport if it has not started yet; it looks like the one below:

The transport route, which is similar to the one visible during checking transport availability, is situated on the left. The only difference is the infor-mation about the shipping list for each transit. If the shipping list has not been provided, this information is marked in a noticeable red colour. Like in the case of transporting goods to a client, there is a highlighted notice about the necessity of choosing the contract which is to be covered by this transport (if the contract has already been selected, then the notice points which one it was).

The right part of the transport details presents additional information about the quantity of lorries which are to be used, maximising transport capacity, and the executor of this service.

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If the transport is on its way, then the details window is broadened by more information about the current state of the transport.

The current segment of the route is marked with blue, and the ship-ping list will contain data about the actual transport- the date and place of departure and arrival, as well as the lorries route.

Transport cancellation

A scheduled transport which has not yet gone out can always be cancel-led. If the transport is in one’s own transport base, a company does not bear any financial consequences connected with this activity. After pressing the “Cancel” option, on the list of transports there will appear a window with short information on the consequences of transport cancellation and two buttons confirming the decision.

Marketing department

The screen for the marketing department, apart from the common com-ponents for all the organisational units, enables players to investigate the changing level of brand reputation, in time, concerning the company’s pro-ducts in a given country.

Factors

Particular factors added to the screen of the marketing department signify:

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Factors. Meaning.

Recognition points earned.

Specifies the amount of reputation points that the marketing unit generates in one step of the game. This value depends on the use of maximum efficiency of the building, whose value is given after the slash.

Reputation points in a country.

The number of points currently generated by a company’s market-ing headquarters in a given country.

Reputation decrease in time.

The reputation points value which falls automatically at each step of the game.

Visualisation of the reputation level

On the screen of the marketing department, there is a component visu-alising the historical and forecast data concerning brand points of reputa-tion in a given country. The exemplary picture clearly shows the forecast fall in points of reputation, in time, as the result of a simulated independent decrease in brand recognition.

Trade department

The screen describing a given trade department, apart from standard elements of all organisational units, includes a list of clients with informa-tion about whether they are located within its range.

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Factors

The trade department factors present data on its range:Indicator. Meaning.The effective radius of action.

Specifies the current effective radius of a business unit. This value depends on the use of the maximum radius for the building, whose value is given after the slash.

List of clients within the range

The page describing the trade department includes the list of clients from the country which the trade department operates in. Each entry represents an individual client, together with information about whether he or she is located within the range of the department, or trade relations could not be established yet. In a situation when a client is outside the range, the last column displays information about the length of radius which needs to be covered in order to procure him or her. A click on the name of the operator in the first column allows for navigation to this trade partner’s screen.

Research department

The screen of the research department has elements common to all organisational units, and a specific one, which is the list of active processes. From the level of the research department’s page we can take ‘Increase func-tionality’ action. Thanks to this, you can increase your phones functionality level for one point, but it requires certain points of innovation quantity.

Factors

Particular factors added to the screen of the research department signify:Factor. Meaning.Functionality level. Specifies the current level of functionality of the produced

phones. Points of innovation earning per step.

Informs on how many points of innovation are produced in a single step.

Points of innovation. Specifies the current number of points of innovation that can be used for various developmental activities.

An element of the current processes list is one which displays current investments, i.e. ISO standards implementation or QES introduction into the production department.

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Economic/Trade partners screens

Common elements

In the game, there are several types of trade partners whom players’ companies may co-operate with. Particular types of partners’ screens look the same and include similar elements. Besides, in views describing par-ticular partners, there are always several basic elements. They are defined in the picture below, in this example of a forwarder.

The list of available actions is placed above. There is also an option of navigating to the world map with marked locations of partner’s headquar-ters and other options, depending on its type.

On the left side of the screen there is the name of a partner, an icon rep-resenting its type and its factors’ values. The standard factors include the name of a country in which a partner operates, and the closest location of a player’s company branch. The remaining ones are specific to a given type.

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Ordinary elements, related to the co-operation of a player’s company with a given trade partner, are presented on the right. It could be i.e. a list of contracts signed with it.

Forwarder

Forwarder’s screen allows you to add new transport orders (signing con-tracts), their cancellation and the opportunity to edit the shipping list. At this point, you can also check the status of a carrier’s resource use, in time.

Additional factors presented to the forwarder are in the table below. All are constant for the carrier during the entire game.Factors. Meaning.Number of lorries. Number of lorries available at the forwarder.

Load capacity. Load capacity of a forwarder’s single lorry. It can always be fully utilised if needed.

Price per distance unit. This value is taken into account when determining the value of the contract.

Transport order

The process of commissioning new transport looks very similar to that of the transport base. The only difference appears after checking the ava-ilability of transport. If the freight forwarder has free resources, then in the right side of the window are the details of the journey; there is additional information about the value of the contract, which will be signed with the freight forwarder at the time of signing the final contract. This data helps you to make the final decision on the transport order.

Transport details preview

Like other forwarder functionalities, including viewing the details of transport, it looks very much like your own transport. Also on the list of information about the transport, there are additional pieces of information about the number and value of the contract, and the amount which the company must pay in the case of breaking the contract.

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Transport prepared

The list of transport contracted at a forwarder looks very similar to the one at your own transport base. The only difference is an additional column with the number of any contract, in the chart displaying transport.


Transport cancellation at a forwarder looks like the cancellation in a company’s own transportation base, with a difference that among informa-tion on the consequences of this act, there is a message on the fine which will have to be paid if the action is confirmed. It has to be remembered that transport cancellation at a forwarder does not retard his resources at the time.

Shipping list

The shipping list edition looks exactly the same as in the case of trans-port from a company’s own transport base.

Forwarder resources use

In the freight forwarder’s screen, there is a visualisation of its resources use.

The next days (steps) are assigned to the two pillars of the chart. The first (blue) reflects the number of lorries booked by the logged player. The second (gold) is the number of vehicles that still can be rented

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Storehouse

The screen of a storehouse allows you to check the use of its resources, and provides an insight into the list of the contracts and gives any options of signing a new one. If in a given storehouse there is a storage space rented, there are also presented information about the goods contained therein, and a forecast about the use of space, in time.

Additional factors presented for a storehouse are as follows:Factor. Meaning.

Total storage area. The limit of the storage space which can be rented to players by a storehouse.

Contractual storage area.

Amount of space that has been contracted by a player’s com-pany for the current period.

Basic price per unit. The amount of fees charged in a billing period for each rented unit area, regardless of whether the surface was used or not.

List of contracts

On the page describing the storehouse, there is also presented a list of contracts that the player’s company has signed with the storehouse. If there are any entries, for each of them there is information given about the periods in which the contract expired; which area under this contract is rented, and what the periodic fee amount is. In the next columns, informa-tion is presented about the number of the contract, the date of its signing and the status.

If the contract has not been executed yet, there is the possibility of can-cellation. To do so, press the ‘Terminate’ button, which, when clicked on, opens the window with the decision screen. Information is presented about the amount of the penalty associated with the decision and basic informa-tion on the contract that is to be cancelled.

Use of storehouse resources

In the game, it has been accepted that each storehouse has a fixed maxi-mum storage space which can be rented to players’ companies. Depending on the amount contracted by individual companies for specific periods, the rental area changes.

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To present this relationship there are the two components included in the storehouse screen. The first of these is a chart, of which the successive rows correspond to the question of how much of the storage area in a given period has already been contracted, how much has been contracted by the player and how much of the remainder are still available. With the help of the filter above the list, users can specify from which period indicated there shall be presented in the data.

The second component presents data from the chart in graphic form. Other periods are assigned to the two pillars of the chart. The first (blue) reflects the amount of space contracted by the logged player. The second (gold) is the amount of remaining resources.

Storage space rental

Signing a contract for the rental of storage space, the player has to fill in the form that appears when you click on ‘Rent a storage area’, at the top of the page.

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The player who is managing the company determines, primarily, how many units of a storage space he or she wants to rent, and from which period the contract would apply (the earliest possible period is the next period). In the last field should be information given on how many periods the rented space is to be contracted for. Given the limited resources of a storehouse available, it is necessary to first check the desired availability in a given time. If it is possible to conclude a contract, the player may confirm his or her decision by pressing ‘Order.’

Supplier

The screen of components supplier enables to check the status of the use of its resources, the current price resulting from this, insight into the list of the signed contracts and signing the next one.

Additional factors presented to the supplier are the following:Factors. Meaning.Components quality.

Each components supplier produces and offers sets of a certain quality level on the market. This value is constant throughout the whole game.

Basic price per unit.

One item offered by components suppliers is a set sufficient to produce one phone. The base price is the basic price from which the supplier gives discounts depending on the degree of their contrac-ted resources. Suppliers’ discount policy is described more extensi-vely in the section about the concept of the game.

Effective production capacity.

A number of component sets which each supplier is able to produce in a single step of the game. This value depends on the supplier’s amount of goods in a given period.

List of contracts

The page describing the supplier presents a list of contracts that the company has signed with him or her. If there are entries for each of them, information is given about the period in which the contract expired, and then the number of items ordered and at which price. Subsequent columns provide information about the date and place of delivery and the current status of any contract.

If any contract has not been executed yet, there is the possibility of its cancellation. For this you use the ‘Terminate’ button, which a click on then opens a window with a decisions screen. Information is presented there about the amount of the penalty associated with the decision and basic information on how the contract will be cancelled.

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Components availability in time

In the game it is accepted that each supplier offers, within any one period, only the amount of components he or she can produce in that period. Besides, he or she manufactures goods only under contract. As time passes, the amount it is possible to supply decreases. Similarly, if either of the companies has ordered components from that supplier, the amount which could be contracted decreases. The presentation of these quantities and relationships are two components shown in the screen of supplier.

The first one of these is given in the chart, which the successive rows correspond to the question of which number of items in a given period has already been contracted, how much has been contracted by the player and how much of the reminding ones are still available. The last column provides the current price per unit in a given period. With the help of the filter above the list, users can specify from which period the data should be presented.

We can see, in the picture, the status of the resource use of the supplier for the next five periods. In the current four periods, out of 15,000 units which the supplier can produce, he or she has contracted only 200, of which all 200 were ordered by your company. The amount of remaining resources is large enough to maintain the best possible discount ceiling for the play-ers, at which the price per item is 8 (eight). For the periods five and six, the quantities ordered use up the highest discounts and further concluded contracts with the supplier would have correspondingly higher prices. The list also shows that for the periods of seven and eight, no one has made an order and it is possible to obtain components at attractive prices.

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The second component of the table presents data in graphic form. Other periods are assigned to the two pillars of the chart. The first (blue) reflects the volume of orders placed by logged-on player.. The second (gold) is the amount of remaining resources. The chart also has red lines defining the quantitative ceiling above which different levels of discount were applied to. Everything is superimposed by the green line, which reflects the current purchase price of components in force within a given period.

Placing an order

Signing a contract for the supply is to fill in a form that appears in the window after you click on ‘Place an order’ option. The player managing the company determines, primarily, which period he or she would like to sign a contract for and the number of components they would like to order. In addition, he or she should determine the warehouse where the parts are to be sent to and the proposed date of delivery. After filling out the required fields, click ‘Check availability’, to make the system check whether the given conditions may be possible to meet and display any informa-tion about the conditions of purchase (price, total value of the contract, the penalty for breaking it). If the conditions suit the owner, you must click on the ‘Order’ button, and thus comes to signing a contract.

Checking the feasibility conditions given by the player, the system veri-fies whether the quantity ordered is possible to deliver within the specified time; whether the delivery date is not later than the length of one period from the date of manufacture of the necessary quantity of parts, and what the current price is by which the contract is to be formulated. Even if the quantity ordered goes through several discount ceiling, all of the sets are bought at the same time, and at the best price at a given moment.

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Information about the company

During the game, a player will often need information about the state of the company. Information important for him or her will concern incurred costs, profits or company employees. The ‘Company’ aims at providing such information. You will find here information about the company’s condition, costs distribution or a summary of particular organisational units.

Company state

The ‘Company state’ screen is to present summary information about the company to a player. This screen enables a player to purchase Know-How, order an advertising campaign or take a current credit.

The upper part of the screen presents summary information about the company, such as account balance, solvency, total loans, total gains, the quantity of manufactured phones, points of innovation and many others. Apart from numeric information, you can view the company›s costs distri-bution divided into operating areas and presented in a graphic form.

Below, there is summary information about the company’s operating activities presented to a player. These are six categories, which are respec-tively: Production, Warehouse management, Trade, Transport organisa-tion, Marketing, and Research and innovation.

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Payroll

In order to check the payroll in your company, you must click on ‘Com-pany’, and next select the ‘Payroll’ option. The screen consists of two elements. The first one is the list of employed individuals (currently and in the past).

This list informs about remuneration levels and the average wage of each professional group in the country. Thanks to such a presentation, it is easy to search for groups which are underestimated, when compared other companies. Above the payroll there is a filter which allows for limiting the list to a selected country.

The second element of the payroll screen is a graph presenting remu-neration cost distribution within a player’s company.

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The example above clearly shows that, totally, drivers, fitters and ware-housemen require similar expenditure for the company.

Furthermore, the payroll allows for influencing the salary level of each professional group. After a click on ‘Change the salary’ there will appear a form in which you can introduce a new amount the group will be paid. On the right side of the form there is information about the group which undergoes the change in remuneration, as well as their current remunera-tion and average wage.

Know-How buying

In order to purchase a “know-how” points-of-innovation set, you must choose from the ‘Company’ screen an option called ‘Know-how buying’ and click on it. The window’s opening form presents all available variants of kits together with information about points of innovation quantity. A player chooses the set which interests him or her and orders it. Immediately after the money is transferred to the bank, a player gets a specified number of points of innovation.

Advertising campaign order

To order an advertising campaign from a promotion and advertising agency you must click on ‘Add campaign buying’. The window’s opening form presents all available campaign variants with information about an increase in points of reputation and the final effect. A player selects a type and a country where the campaign would be conducted. Then the system calculates it and provides a player with an estimated price. If the com-pany’s executive accepts the conditions, you can click on the ‘Order cam-paign’ button. This means that the contract has been signed and the agency starts executing it.

Reports

From the main menu a user can navigate to the ‘Reports’ section. It includes three subpages, which present tallies concerning company finances.

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Account history

The account history screen includes a component of the list which presents all financial transactions which were carried out on the com-pany’s account. Particular columns of the chart correspond to singular money transactions. Each one has its ID, date, type and amount. Further-more, there is information about which account made a money transfer and which one has received one. All transfers of a player’s company are in the ‘Source account’ stand for the company’s expenditure, whereas those from the ‘Target account’ signify the company’s income.

Empty entry values in columns ‘Source account’ or ‘Target account’ stand for a certain undefined entity which might be identified with a bank, country or a group of addressees.

There is a filter placed above the list which in an easy way allows for browsing all transfers of a given type or from a defined period of time.

Income statement

In the game, such a tally is done automatically at the end of each period; therefore, an insight into this information is possible from the second period. An income statement is done by the system on the grounds of a calculation variant.

A component presenting the statement includes a filter which allows for choosing a period and a chart with the data. From particular entries it is possible to learn if any phones sale have brought profits and whether, after taking into account all additional costs, the company made a profit or loss. Subsequently, the financial result is used in the following statement- a balance sheet.

Simplified balance sheet

A company’s balance sheet shows the state and structure of its owned assets and indicates the sources of their financing- liabilities. In the game, such a tally is done automatically at the end of a period; therefore, an insi-ght into information is possible only from the second period.

A component showing the balance sheet allows for selecting one of the past periods, which the data are to be opted for. The balance sheet is presen-ted in the form of two charts, where the one on the left refers to assets and the right one stands for liabilities.

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List of bidding notices

In the main menu there is the “Biddings” option available. There is a screen presenting the list of bidding notices. Each entry has information about a bidding type (limited/unlimited), its date, application deadline, delivery deadline, technical requirements (minimum quality and function-ality) and conditions concerning brand recognition. Furthermore, there is information about quantity in the notice, and a maximum price a client is willing to pay.

Players can check how many offers have already been released. If a play-er’s company meets the conditions of participation in bidding (its brand has a required reputation, the company has its headquarters on the terri-tory of an operator’s country, and, what matters in the case of foreign cli-ents, the company has ISO standards implemented), there is a ‘Register an offer’. After registering an offer by the owner, an offered price is visible on the list, in the column ‘Registered offer’.

The list of bidding notices has broad browsing options. It is thanks to a filter placed above. A default refinement is presenting offers only from countries where player’s company has its branches (by means of the coun-try filter), additionally these have to be updated notices (status entry in the filter). Choosing the Historical status will result in screening only those biddings which player’s company participated in, and which were already closed. The remaining boxes in the filter allow for narrowing the set of notices to those which the players company applied for (entry Bid has been registered), according to bid availability, maximal value and delivery deadline.

Registering the offer requires a click on register an offer option. In the appearing window of the form you must reintroduce an offered amount for a whole contract.

If the player participated in bidding for contract, it is possible to get familiar with offers registered by competitors immediately after it is fin-ished. For historical biddings, in the last column of the list there is an avail-able option show bids. On the basis of information about bids which com-petitors could not participate in and what were prices they offered, other players may come to conclusions concerning the advancement level of competitors and tendencies on the market.

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List of contracts

‘Contracts’ is one of the most important screens in the game. This is the place where a player can view the summary information about contracts he or she has signed.

Company loans

A list of company loans presents all credit currently being repaid. There is full information on the type of credit, its interest rate, the remaining amount still due and the value of a singular installment. Each of the credits has an option of predated loan repayment, thanks to which the player may meet his or her commitments towards the bank. It is enough to write in the amount of money and press the ‘Repay button.

Contracts with mobile operators’

The list of all contracts with mobile operators signed as a result of win-ning the bid for the supply of phones. The list is described in the screens related to the mobile operator.

Contracts with suppliers

This is the list of all contracts with suppliers for the delivery of compo-nents. The list is described in the screens related to a supplier.

Contracts with storehouses

This is the list of all contracts with storehouses for rental of storage space. The list is described in the screens related to the storehouse.

Contracts with forwarders

This is the list of all contracts with forwarder agents for transport orga-nisation. The list is described in the screens related to the forwarder.

Contracts with advertising agency

The ‘Contracts with advertising agency’ list presents all active advertising campaigns ordered by the company. It provides information about the type

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of a campaign, its value and its effect expressed in points of reputation and the actual increase in points of reputation in a singular step.

System messages

After a click on ‘Messages’ in the menu, you can enter the list of messages addressed to the player’s company. They can be viewed as e-mails.

These messages inform about different events which are special for the company. Like traditional e-mails, they have their subject, content (visible after a click on the ‘Read’ option), sending date and sender (the system). The ‘Already read’ column informs on whether a given message has already been read. If it is empty, it means that this message (marked with number 58 in the picture above) was sent to all companies in the game. Further-more, above the list there is a form allowing for filtering the list according to set criteria.

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ORGANISATIONAL STRUCTURE OF THE COMPANY

Companies run by players have their functional structure. Designated departments, which are situated in particular locations, deal with various areas of business activities of the company. In order to establish a new department it is necessary to build its headquarters and employ personnel of sufficient qualifications. The assumption is that there can be only one organisational type of a given unit in one department.

Organisational units in the company

The organisational units which can be established within the organisa-tional structure of the company are as follows:

Organisational unit. Function.Production department. Phone production.Own warehouse. Storage of goods.Transport base. Transport organisation.Research department. Points of innovation earning and innovative pro-

cesses.Marketing department. Recognition points earned.Trade department. Customer acquisition.

Buildings

Each of company departments run by players has to have its headqu-arters. For this reason, it is necessary to build a proper building for this organisational unit.

Buildings can be raised only on free building plots within the company department. Every building has its particular level of development, on which depends the price values of a maximum number of job posts and maximum efficiency of the department. Immediately after being construc-ted, a building receives the lowest level. An owner of the company may

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decide on its upgrade. It allows for achieving better efficiency of the depart-ment, but also entails a significant immediate financial input, as an increase in the maintenance costs.

Buildings may be upgraded up to reach the highest level available. In the game, there also exists a reverse process called downgrade. It is based on the reduction of a building level. It makes possible the retrieval of money invested in an upgrade from the lower level to the current one, though this activity may entail serious consequences. For instance, in the case of a warehouse, the limits of storage space will be diminished and some mate-rials which are not stored will be destroyed. Downgrading to a lover level also diminishes the number of job posts in a building, which leaves some workers idle and ineffective. Downgrade from the first level means the total downgrade of a building and the clearance of a building plot. Any organisa-tional unit connected with this building is left without headquarters and it cannot meet its functions to start up building reconstruction.

An upgrade or downgrade requires significant financial input. A com-pany owner can make an attempt to apply for an investment credit for this venture.

The buildings which can be raised in a company department are as fol-lows:Building. Unit prescription.Production hall. Production hall building.Warehouse. Own warehouse building.Transport base. Building for a transport base department.Laboratory. Research department building.Marketing office Marketing department building.Customer service Trade department building.

Apart from the locations mentioned above, there is also an administra-tive building in a player’s location. It is raised automatically as an invest-ment plot is purchased and takes one of building plots.

Professions

Each organisational unit needs qualified employees in order to func-tion effectively. In the game, there is the assumption that on each country’s job market there are a certain number of people who, although currently unemployed, have particular taught professions and who can be employed. A person’s profile determines a company department which a person may

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be employed in. One worker can be prescribed only one profession. In the case of people with the same qualifications, their level is being distingu-ished. The current level of professional training influences an employee’s work results and his or her remuneration. People of identical professions and similar qualification levels are referred to as a professional group.

Professions in the game are as follows:Profession. Function.Fitters. Production department workers.Warehouse people. Workers in own warehouse department.Drivers. Transport base department employees.Engineers. Research department employees.Marketers. Marketing experts employed in the marketing department.Trades people. Trade department employees.Managers. People specialised in group management, employed in any organ-

isational unit.On the job market there is one more group of workers- unskilled labour.

For such people to be employed, it entails the further costs of their tra-ining. They immediately get the first level of qualifications in a given pro-fession, which corresponds to their place of work. For instance, employing an unqualified person means that he or she will be prescribed the function of a fitter.

Managers

In order to provide a company with efficient management and develop-ment, a player must pay special attention to the choice of executives. Each organisational unit development is limited by the necessity of employing a well-qualified manager. the number of people requiring a manager in charge varies according to a given department.

It is only possible to employ one executive per one unit. A manager’s dismissal or his or her resignation entails the necessity of employing a new one, inasmuch as a lack of a person in charge (for sufficiently numerous units) blocks the work process of employees in a given department.

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Training

A new employee can be sent to paid courses and training, simultane-ously increasing their qualification level in a given realm. A training pro-cess takes a certain number of steps. In the meantime, an employee keeps performing his or her duties and is paid according to the previous training level. As soon as the training is over, the worker passes to a higher profes-sional group, influencing the efficiency of his or her department and rece-iving a higher salary per month.

Salary

In each country on the world map there are a certain number of wor-kers within a professional group. Employees’ rotation between countries is impossible. Therefore, the number of people on the job market is a sub-ject of competition among players. Company owners decide themselves on the particular professional groups’ salaries. On the basis of such data, the system calculates an average salary in the country. Information on the ave-rage remuneration is very significant at the recruitment process.

In a case of a newly employed person, his or her remuneration in the company is the same as that of those already employed, and if this person happens to be the first one employed, his or her salary equals the average wage.

In order to protect the job market mechanism, the game has introduced limitations concerning the number of percentage points by which the com-pany can either increase or decrease salaries within one period.

Employment/discharge

A basic condition of hiring a new worker is that there is an unemployed person available within a given professional group on the job market. Moreover, an unemployed person will come to the company only if an offe-red salary is not lower than the average wage.

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A new worker receives a full salary for the whole period, independently of the day he or she was officially employed. A new employee starts wor-king from the next step onward.

A company owner can decide on the dismissal of staff. Discharged employees work only up to the end of a given step. They receive a severance pay to the amount of one full period’s salary, according to the rate from that period.

Discharging workers may entail serious and pervasive consequences and should be executed with caution. For instance, in the case of ware-house managers, the limits of an internal storage area will diminish, and part of the goods which will not be provided with the storage space will get destroyed. In the case of a manager being discharged, many employees may become inefficient.

If salaries in a company are lower or almost equal to the average wage, there is the risk that a worker will resign him- or herself. Therefore, a con-stant monitoring of salaries seems necessary to reduce such risks.

Organisational unit limits

Employment in the organisational unit bears certain limitations influ-encing the quantity of people actively participating in work.

The first limit is the organisational unit building. Each level of the build-ing has a certain number of job posts that can be taken by people working effectively. The organisational unit cannot employ more people than the number of jobs in the building of this department. The maximum number of employees cannot be higher than the highest level of the building which determines it.

Another limit concerning a number of actively working employees is the manager’s qualification level. The higher it is, so the total number of subordinates may be bigger. Where there is no manager in the organisa-tional unit, this limit results from the parameter specifying the maximum number of employees who can work without a manager.

When determining the number of people currently taking part in the work of the department, it takes the lower value of the two limits. Employees, for which there is no place are inefficient - they receive wages

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without work. In the case of such a limitation, the system chooses a group of professionals, beginning with those with the highest qualifications.

Organisational unit and profession

The chart below presents the relationships of organisational units, buil-dings and professions:Organisational unit. Building. Profession.Production department. Production hall. Fitter.Own warehouse. Warehouse. Warehouse people.Transport base. Transport base. Driver.Research department. Laboratory. Engineer.Marketing department. Marketing office. Marketer.Trade department. Trade office. Trader.

Efficiency calculation

Each organisational unit in the game has certain functions for any orga-nisational task and performs them with certain efficiency. The game applies certain commonly consistent mechanisms which determine the influence of particular factors on this value.

In the case of each organisational unit, this property is named differen-tly. This is illustrated by the chart below:Organisational unit. Defining effectiveness.Production department. Quality improvement factor.Own warehouse. Effective storage area.Transport base. Effective load capacity.Research department. Points of innovation earned in a singular step.Marketing department. Points of reputation earned in a singular step.Trade department. Effective range.

The result of the algorithm calculating efficiency determines the degree of maximum building efficiency use by employees; i.e. if the space in a ware-house on the first level measures 10,000 units, it means that the employees’ quantity and qualifications level determines which storage area is effecti-vely available.

Factors used in the algorithm of the efficiency calculation of a given unit are as follows:

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a. Maximum efficiency level for a building on a given level.b. Maximum job posts quantity prescribed to a given building.c. Value of a factor prescribed to each professional group.d. A quantity of employees from a given professional group.For the needs of the example below the following values of the factors

are to be adopted:Table 1):

Level of extension n. Number of workplaces in the building S(n).

Maximum effective-ness M(n).

1 10 10002 15 50003 20 10000

* sample data for any building

Table 2):Level of training k. Factor W(k). Number of people Z(k).

1 1 62 1.5 03 2 34 2.5 05 3 2

* sample data for any profession

In the algorithm two variables are used, X and Y, whose relationship determines the maximum building efficiency use, M(n).

Variable X represents the capacities of the people employed. This determines the sum of products of employees’ quantity on a given qualification level, Z(k), and a value of the factor level prescribed in W(k). For these exemplary data, the value of the variable X is:

Level of training. Number of people. Factor. Multiplication result.

Value of variable X 181 6 1 62 0 1.5 03 3 2 64 0 2.5 05 2 3 6

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Variable Y represents the capacity level of employees which will be described as sufficient for using 100% of the building’s capacity. It is deter-mined as a product of the maximum quantity of people allowed in the buil-ding on its current upgrade level, S(n), the value of the factor currently prescribed to the employees’ highest qualification level, F(k), and the value of the system parameter P.

Lets accept the current level of a building as n = 3.•AccordingtoTable1), it has a maximal quantity of job posts of S(n) = 20. According to Table 2), the highest qualification level is the fifth level k = 5, which corresponds to the value of the factor W(k) = 3. The system parameter is described as P = 0.6.

The value of the variable Y in this case totals:

Having determined the value of the variables X oraz wartość zmien-nej Y, we can determine the current efficiency E, as the level of maximal efficiency use, M(n).

It is worth mentioning that the algorithm does not take into account whether employees are active at a given moment. Simulation pertains to the steady influence of the whole.

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AREAS OF THE COMPANY

Production and supply management area

Production is a basic activity undertaken by the players’ companies. Product competitiveness depends on how many and which type of phones will be produced, and finally determines the company’s success.

Supply management

In order to produce phones it is necessary to possess components. Their purchase requires signing a contract with trade partners who produce and supply them; this person is called the supplier. All of them offer component “packages” necessary for device production. They differ among themselves according to quality levels and the base price of materials.

Each supplier has a determined production capacity, so the maximum quantity of components which he or she can produce in a given unit of time is limited. In a game, it has been agreed that suppliers do not store goods but produce them according to the needs of received orders from a given period. As a result, the quantity of components that they may offer to players in a particular period depends on which part of their resources has already been arranged by contract. It is not possible to order a larger amount of materials from a supplier that he or she is able to produce in a given period of time.

The delivery time of the components ordered is calculated as the amount of time necessary to produce the quantity arranged by a contract and the delivery time dependent on the distance between a supplier and the client’s warehouse. While signing a contract, a player may order the delivery of goods with a certain delay, on a precise day, though the time must not be longer than one period.

The charge for the delivered components is taken at the time of rece-iving the goods in the warehouse. Breaking a signed contract entails a fine for not meeting the contract.

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Prices of components

Suppliers make the current price dependent on contracted resources within a given period. It is changeable, because each supplier has a different base price from which they can sometimes offer a discount. When your supplier has a contracted sale of a sufficient quantity of components which will allow him or her meeting the fixed costs of his or her enterprise, he or she diminishes the previous discounts in order to gain as much profit as possible on the remaining goods. Each of the suppliers sets certain ceilings of the quantity of the remaining resources, at which he or she offers disco-unts as for new orders. Subsequently, companies trying to sign a contract on the delivery of components must be aware of a less attractive price. The best offers might be procured while buying a significant quantity of pro-ducts from a supplier in advance (as one of the first buyers). This results from the fact that it is worth dealing with purchase issues in advance, in order to outstrip competitors. Also, it is advisable to buy a sufficient quan-tity at one turn to avoid further transactions at a higher price.

Production process

The production process takes place in a production department. Condi-tions which are to be met to enable efficient functioning consist of employ-ing fitters, placing their work in a production hall and providing them with a sufficient quantity of components.

The production process is generally based on assembling each of pro-vided kit of components into a phone. In this way, each fitter processes the same amount of materials to put into the ready products in any given step (independently of their qualifications). It means that in one step, the quantity of phones produced in the production department depends exc-lusively on the efficient work of the fitters. As was previously explained, quantity depends on the quality level of a building and the qualifications of the manager employed in this department.

In the production department, a quality improvement factor is the effi-ciency factor, which depends on the qualifications of the employees.

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Influence on features of ready products

The mobile phones produced in a production process are characterised by two features: the levels of quality, and functionality. Phone functionality describes the capabilities offered to its users, whereas quality is understood as its durability and solidity.

The functionality level of a phone produced in a given production department corresponds to the level of technological advancement of the whole company and is identical for all departments within one company. An upgrade of this feature does not depend on the production process, but requires the input of the research and development department and a significant quantity of innovation points. In the game, the level of functio-nality is expressed by means of letters in the interval from F to A, where A stands for the best one.

On the other hand, the quality level of the produced phones is a value dependent on the quality level of the components used in their assembling. It must not be lower than the quality level of the components, and it is thoroughly dependent on the production department’s efficiency whether and to what degree it will be increased. In the game, the quality level of a phone is expressed as an integer in intervals from 10 (the level might be different for each scenario, the maximum level is 10) to 1, where 1 stands for the worst one.

Quality improvement factor

A quality improvement factor inherent to a given production depart-ment is calculated according to a common algorithm to all organisatio-nal units. These are the number and qualifications of the fitters, and which conditions the level of maximum exploitation of opportunities is offered by a production hall building on a current level. The quality properties of the phones, produced from any given quality level of components, is deter-mined by a multiplication of this level by expressed in percentages of the quality improvement factor, which is rounded-off to a lower number. For instance, for a quality improvement factor of 150% and components from the third level, it is possible to produce phones from the forth level, but it is already impossible for a factor of 120% where phones will gain the third level.

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In the game there is a possibility of introducing Quality Management System in a production department. This process is followed by an incre-ase of factors influencing fitters’ qualifications on the procured quality, and subsequently raising the quality improvement factor of a whole company.

As results from the algorithm of determining the quality level of ready phones, in order to produce a more durable phone you can immediately purchase more expensive components or invest in more qualifications for the employees.

Support warehouse

Each production department in a game requires the possession of a warehouse, which could function as a support warehouse. This is where, in the game, a required quantity of components is withdrawn from, and where produced phones are stored as well (in exactly the same quantity). A support warehouse is an organisational unit of one warehouse type, which exists in the same department as the production department. Its existence is a necessary condition to start phone production. .

Production plan

In each step, a certain quantity of components is withdrawn from a support warehouse to be sent to the assembly line. This quantity equals to processing capacity of the active fitters in a given production depart-ment. Inasmuch as a warehouse may store parts of different quality levels, it is necessary to distinguish which ones require the fitters’ processing. It is necessary to notice that the quality level of produced goods depends on the quality of the components used. In the game, there is a production plan-ning simulation, based on enabling the players to determine rules for each department, by defining the sequence of components sent to the assembly line on the basis of their quality parameters. A default plan assumes that these are parts of the highest level which are taken first, and if they do not suffice, you should resort to those of lower quality. Nonetheless, a company owner can freely modify this sequence.

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Warehouse management

In the game, the companies run by players are production enterpri-ses, in which the role of warehouse management is really significant. It is necessary to provide a required storage space for both components and ready products. In the game, there are two strategies, or their combination, available, depending on market conditions and the scale of the company. The first one is based on renting a ready storage space at one of the trade partners specialising in it. The second assumes raising a company’s own warehouse building, with an option of its development in the future and employing warehouse managers.

Each of the warehouses in the game can store a definite quantity of com-ponents or phones. It has been adopted so that both kinds of these goods occupy one unit of a warehouse area. Storage spheres for particular com-ponents or phones are not strictly fixed, but limited by the storage space available.

Own warehouse

Players can create their own warehouses. The maximum storage area of a warehouse depends on the level of a building’s development. In order to provide their good functioning, it is necessary to employ warehouse people. The maximum use of the company’s storage space on a given level depends fully on them. For a company owning warehouses entails the necessity of bearing the fixed costs of building maintenance and the costs of paying salaries.

In order to ensure the development of the company’s production depart-ment, a player has to build his or her own warehouse in the same depart-ment, to provide components and store phones put together in a produc-tion hall. The products shuffle between a warehouse and an assembly line in the same location, they take no time and do not entail any costs. Such a warehouse functions as a support warehouse.

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Storehouse

In the game, there are trade partners specialising in renting storage space. Each of the storehouses has a defined maximum storage capacity, and charges a fixed amount of money for a space unit rented in one period. The maximum storage space at a given partner does not change in the time of a game.

Contracts with a storehouse are signed for a definite number of periods. Signing several contracts with a given partner by a company, during the same period, causes a summation of contracted areas and a limited exten-sion. It has to be emphasised that at the moment of contract expiration, the limit is diminished. Therefore, if his or her amount of goods still in a store-house exceeds the new limit, the excess will be destroyed.

In the game, the space rent from a trade partner is treated as yet another warehouse belonging to a player (i.e. at organising transport), though it must not function as a support warehouse. Fees are charged at the end of a given period.

Utilisation and waste

Because of the limits concerning storage space, there appear numerous limitations and threats. If the arriving transport brings more components or phones than is currently necessary and is possible to store in a ware-house, then the remaining part, which will be placed on a ramp, will be damaged. A player may deal with loses alike in a situation when there is a building downgrade, warehouse people or manager discharge, or a con-tract on a storehouse tenancy expires. These processes reduce storage space capacity limits, which may result in the loss of those goods which could not be stored (goods to be destroyed are chosen randomly). Situations of this type may cause significant financial losses and interference with the com-pany’s plans. Then it is necessary to cautiously plan and take into account spare space available in a given moment while organising goods shuffles between warehouses and ordering components. Help is provided by visible information on the screens of the warehouses’ constituents, which project space occupancy, including planned dispatches and receiving.

In some situations, players may individually decide on damage necessity pertaining to a defined amount of goods. For instance, if there is no chance

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of selling phones which were produced quite a while ago and are rather not very good, but now only occupy storage space, or there is an expected transport coming shortly with new ones, the loss of which would by far more expensive. Utilisation of unwanted goods is possible by using options available on the screens of the warehouses.

Transport area

The organisation of goods transportation is necessary for the company’s functioning. Transport enables the displacement of components and ready mobile phones between warehouses (both owned and external) and to a client. The transport of goods may be organised in two ways: using freight forwarding services or using your owned transport base. Both approaches have their advantages and disadvantages. They also depend on the current condition of the company, the number of signed contracts and the deploy-ment of suppliers, warehouses and clients.

Own transport base

Transport may be organised within your own transport base. In order to be able to exploit its potential, it is necessary to build a transport base building and employ drivers there. The number of employees corresponds to the number of vehicles in the base. The qualification level of the workers influences the base effectiveness, as does the size of an operative space of a singular vehicle of certain capacity. It does not really matter whether a par-ticular vehicle is operated by a particular driver; the drivers’ qualification levels influence the effectiveness of the whole base functioning.

The base can be expanded to the following higher levels, which influ-ences the vehicles’ maximum capacity and the number of vehicles in the base itself (and the number of drivers correspondingly). In other words, the higher the level a transport base is, the more drivers can be employed. Additionally, each vehicle gains better maximum capacity.

The advantage of having one’s own transport base is the possibility of the free transport of goods and not sharing its resources with other companies. On the other hand, the fix costs are enlarged by the necessity of building maintenance and the base workers’ remuneration.

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Forwarder

Transport may be organised by using services of a forwarder, in other words, an external carrier. Forwarders, who are located on the world map, may be of different types. The type of forwarder influences the maximum number of vehicles available and their capacity- these are system parame-ters. Forwarders offer their services at a specified price (for a distance unit) depending on the type, and the country they are located in.

A transport order to a forwarder is equivalent to signing a contract for its implementation. The payment is made in advance, at the moment of signing the contract, and it depends on the length of the route and the number of vehicles used for the transport. The value of the contract is a product of the length of the route, the forwarder’s unit price and the quan-tity of vehicles used.

The prime advantage of using a forwarder’s services is a lack of main-tenance costs, which would be present even if there were no need for any transport in a given period. This profit is gained at the price of payment for a signed contract, and if broken, you are responsible for any punishment included in the contract.

Transport organisation

Transport organisation looks similar at both a forwarder’s and at your own transport base. The only difference is that in the first case you have to pay for the services. In order to commission transport at a transport pro-vider (forwarder or transport base), it is necessary to define the maximum quantity of goods to be displaced within one segment of a route, the route itself and the date, and which schedules are to be implemented on a parti-cular route section. On the grounds of these data, the availability of vehicles in a given time at the provider is checked.

It is possible to organise transport when there is a sufficient number of vehicles available in a required time frame to complete the route. The number of vehicles is determined on the basis of the maximum quantity of goods to be shipped and a singular vehicle’s capacity.

If it is possible to organise transport, it may be eventually ordered; though it must be remembered that transport created in this way describes solely the transfer by a vehicle or vehicles in a given time. In order to make

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sure that the vehicles are not empty, it is necessary to define a shipping list that specifies which and how many loads are to be transferred.

Created transport schemes cannot be altered, so that it is important to plan it well from the beginning, paying attention to the remaining time of the current step in the case of planning the transport order for the next step of the game (it takes time to fill out the bill of lading).

Transport route defining

While defining transport, it is necessary to provide information on the transport route. Each route consists of at least two sections (transport) of non-zero length. The route is fixed by providing points which are to be reached by the lorries. The points may be loading or unloading ones, or of both types at the same time. The load points may be external warehouses and owned ones (and more precisely, departments with owned wareho-uses). Unloading may take place in a different warehouse or at a client’s, with whom the company currently has a signed contract on the supply of mobile phones.

The route always starts at the location of a transport service supplier (this point is assessed automatically), and subsequently passes through the following determined points (locations of warehouses and clients) to finally go back to its initial location (also added automatically). In the case of an owned transport base, it might happen that the first load point (or the last unloading point) is in the base location, which means that the warehouse is situated in the same location. Then, before the transport departure, the load is made in a warehouse (after the unloading route is finished respec-tively). In other words, the route does not include the shuffle between an owned warehouse and a transport base situated in the same department of the company.

There is an eventuality that the point of a given unloading is not the load point of the following transport at the same time. Then there is an empty shuffle added to the load point in order to preserve the continuality of the route. In the case of transport serviced by a freight forwarder, it is necessary to pay for it.

An exemplary complicated route could look like the one below:

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The router passes through the L1-L8 locations. In the picture there are ten marked shuffles, which the lorries are expected to perform. Transport 1 and 8 are empty shuffles required to preserve transport continuality. (1-shuffle from a transport base (L1) to the first load point (L2), 8- shuffle resulting from the fact that unloading takes place at point L6, and the next load is to be at L7). Between locations L4 and L5 there are three shuffles. This means that first there is a load at L4, to be unload and a new load collected at L5; next, this is unloaded and a new load collected at L4, and finally unloading (and a load for shuffle 7) at L5. To sum up, the load points are L2, L3, L4 (twice), L5 (twice), L7 and L5, whereas the unloading points are L3, L4 (twice), L5 (twice), L6, L8, and L1.

Route placement in time

The route designated on the basis of the points of loading and unlo-ading, has to be placed in time; in other words, it has to be determined in which steps of the game vehicles will be located at particular points of the route. It has to be determined during the defining of the transport, by pro-viding a step in the game and the point at which vehicles are supposed to be at in any given step. The point is marked by pointing the transport and its beginning (load) or end (unloading).

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For instance, while using the picture of the route below it is possible to make transport No. 7 unload in the steps 3-7 (from L5 to L6). Thanks to this information, the system will be able to place the whole route in time.

Shipping list compiling

In order to dispatch particular goods in a given transport, it is necessary to define what and in which quantities the goods to be transported are, because otherwise lorries will depart empty.

A shipping list might be compiled for every defined transport between two points. This is done by declaring which kind and the quantity of mobile phones (with their quality and functionality), and components (with their quality) are to be transported for a given distance. In one turn, it is possible to transport various kinds of phones and components in a total number which does not exceed a given transport’s capacity limit. It is necessary to remember that compiling a shipping list for a given transport is not equal to the actual capacity of the lorries, because the list only indicates what is to be procured from a warehouse. If at a load point some ordered goods are missing, this is solely because those available will be loaded.

If a given transport has its unloading point at its client’s, it is necessary to point out in the shipping list which contract stands for the actual trans-port. Additionally, on such distances these are only the phones which can be transported.

A shipping list can be freely edited up to the point (step) where the first load in the first defined transport is about to take place.

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After creating any transport, it can be cancelled as long as it does not actually depart.

Course of the transport

A defined transport starts off at the beginning of a step of the game, which is set as the transport’s start. If the transport base is placed in the same location as the load of the first vehicle, it means that this load is com-pleted directly before the transport is launched.

Vehicles drive through the following points of the route at a constant speed determined by a system parameter. According to the plan, at the beginning of any given step, they reach certain locations where loading/ unloading takes place. It is assumed that storage activities do not take time and transport starts immediately after they are finished. An arrival, loading/unloading and departure to the next point happen in a fixed sequ-ence, but they do not take time so that all those activities are done at the beginning of a step in which transport is at a given location. Simultane-ously, it is accepted that in this way one warehouse may pay services to many forms of transport at the same time.

When the transport reaches its destination place, it gives away its all load to the warehouse or a client. You should be cautious, because, due to some inattention, it may unload phones which were not ordered and therefore lose your own products. Nonetheless, at a load point (which may be the same one as an unloading one), goods are collected on the basis of a shipping list. If the amount of a given load in a warehouse is not ava-ilable in the quantity ordered, the maximum quantity available is loaded. This results from the fact that in extreme cases, the transport may arrive as empty despite a decent shipping list. In the case of unloading, if due to an excess in a warehouse, it will not be able to accept more goods, although they will be unloaded anyway, but solely to be destroyed. Therefore, it is vital to take care of the warehouse capacity before the transport arrival.

After reaching the last unloading point on the route, vehicles return to the place which they departed from. If this point was a warehouse of the branch with a transport base which the vehicles departed from, it means that unloading takes place first and then follows an immediate return to the base.

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After creating transport it can be cancelled as long as it does not go on tour. In the case of your own transport base, it is done without consequ-ences and enables previously booked drivers to handle new transport in a given period of time; although, if the service was ordered at a forwarder’s, its cancellation equals breaking a contract on processing transport. As a result, a company bears the cost of the fine for terminating the contract for a forwarder. Unlike in the case of your own transport base, transport at a forwarder’s does not retard his or her resources and drivers are not availa-ble at a given time.

Trade area

In the game, clients buying phones produced by players’ companies are operators of mobile networks who, while relying on their own distribution chains, provide phones to individual clients. Taking into account the dif-ferent needs of consumers, operators call for bids concerning phones of various classes. Each call defines minimal technical parameters (quality, functionality), delivery deadline and the maximum price offered by a client. Companies run by players may attempt to win a given bidding by registe-ring their price offers. Every now and then, new bid registrations appear. In the game, a special mechanism simulating demand for phones and setting maximum price accepted by an operator is responsible for generating regi-stration.

Participation in biddings

There are two types of biddings, unlimited and limited. Every company is entitled to participate in an unlimited bidding, whereas limited biddings are addressed only to those who have already established trade relations with a given client.

The basic condition of participation in a given bidding is having either headquarters or a branch in a country where a given operator runs its busi-ness. In the case of a foreign client, the company has to prove that the ISO standards have been implemented

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For each bidding, operators may claim a basic reputation level of a given brand, which they are willing to purchase. The company participating in a bidding must prove their sufficient level of brand recognition on the market of the country of a given operator. In order to succeed in this task, the com-pany may increase its reputation level by suitable marketing activities.

Participation in a limited bidding requires the establishment of trade relations. To achieve this, companies producing phones may launch orga-nisational units within their structures, the range of which will reach a par-ticular client. If the company proves successful, it obtains an insight into the list of offers on limited biddings generated by this operator.

Bidding settlement

One bidding can be participated in by various companies, after presen-ting their bids for contracts. Before the deadline expiration, players can change their offers. At the end of the fixed day, bidding is settled. The deci-sion on choosing a company which an operator will sign contract with, is primarily based on the offered price, and if the rate is identical, most of the companies take into account indicators such as brand recognition or the functionality level of the phones. The winner immediately signs the con-tract on supplying a quantity of phones at a price stated in the offer. Each player has full access to the information about all bidding settlements, as well as the ones in which they did not take part in.

Processing the contract

A company is obliged to provide a certain fixed quantity of devices meeting minimum contracted requirements by a particular deadline. The phones may be delivered in batches in several transport deliveries, and have higher parameters than required. It is necessary to pay special attention to their specifications, because if the delivered goods do not meet the contract conditions will not be accepted by an operator and will become damaged. The company is paid for the goods on their delivery.

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Liquidated damages

If, the required quantity of goods is not delivered before the deadline, or a contract is broken by the player’s company, it is obliged to pay liquida-tion damages, the amount of which depends on the missing load. The fee is calculated by multiplying the quantity of undelivered phones by their maximum price stated in the offer.

Trade activities

Within a company’s development, a player may decide on a trade depart-ment creation. Its main task is procuring and maintaining trade relations with clients. Its effective range determines whether a given client is placed within a given unit’s reach. It depends on the level of a building’s develop-ment and both the quantity and qualifications of the tradesmen employed there. Trade relations are launched with clients within the department’s range, whose location, according to the trade unit’s location, is smaller than the number of points of the range. The territorial zone of these activities is limited to a particular country; hence, trade relations with neighbouring countries, even if according to the algorithm they were located within a particular unit’s range, are not possible.

Marketing activities

Marketing activities are aimed at increasing brand recognition (reputa-tion) in a given country. A proper level of recognition is a basic condition of a company’s participation in the tendering for the supply of phones. Gaining a higher level of recognition is possible by applying one of two strategies. The first one assumes hiring an advertising agency and the commissioning of an advertising campaign and ordering an advertising campaign organisation. The second variant is to establish a company’s own marketing department, which in a continual manner will work on increasing the level of brand recognition in society. The effectiveness of work on this goal depends on the number of employed experts on market-ing and their qualifications level.

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Inasmuch as with the passing of time, a procured level of brand reco-gnition gradually falls, its maintenance requires seasonal ordering of adver-tising campaigns from advertising agencies or by organising a company’s own marketing department, the actions of which will suffice to compensate for the results of the fall.

Advertising campaigns

The responsibility for the organisation of any advertising campaigns is placed on promotion and advertising agencies, which can be hired for such tasks. They are in possession of the necessary means to employ numerous variants, each of which is characterised by a different time of implementa-tion, procured results and the price. During campaigning, the reputation of a brand increases at each step respectively. Every advertising campaign can embrace only one country, and a given type may be related to a different cost in particular countries.

Own marketing department

The main task of a marketing department is to work on the increase of the reputation of a certain brand in a country on which territory this unit has its headquarters. Depending on the level of a building’s development, the quantity and qualifications of employed experts, this unit may also pro-cure various number of reputation points in a singular step. All marketing departments’ activities within one country are totalled.

Developmental activities area

The market of mobile phones is really demanding. In order to survive the competition with the best, producers must provide for well-qualified staff, allowing for modern product supply. Because of this, companies invest in a research department which enables the technological and func-tional development of the product and the whole company.

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Research department

A research department is an organisational unit responsible for intro-ducing innovation in the company. It carries out research, the aim of which is to increase the number of phones produced by the company, and the activities directed at implementing a quality management system based on ISO standards. It is possible to use this department’s resources to organise the training of employees.

Points of innovation

Points of innovation are the measure of intellectual capital of the com-pany. These can be achieved by engineers working for a research depart-ment, or by the purchase of a “know-how” package.

With points of innovation, a player will pay for:• An increase of the phones’ functionality.• Employees’ qualifications level.• ISO standards implementation.• Quality management system implementation in the company.

Phone functionality levels

In the game, each phone has been produced with a certain functionality level. This level stands for a technological advancement of a phone. In the game, there will appear offers of various mobile phone operators requiring a minimum functionality level. The higher the functionality required, the higher the value per unit.

ISO standards

International ISO standards are issued by the International Organisa-tion for Standardisation and are aimed at the implementation of norms and standards for various aspects of life.

In the game, ISO standards aim at introducing a standard of goods pro-duced in the company which will allow for selling phones to foreign clients.

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In order to implement ISO standards, it is necessary to have a research department with at least one engineer employed there.

Quality Management System - QMS

A quality management system is a set of rules for quality, which should be met by an organisation to live up to any client’s needs and expectations. The quality management system is based on documentation and the imple-mentation of procedures required by a norm and their subsequent scrutiny by an accredited certifying unit, which by means of an audit systems, asses-ses whether a company meets the required norms, and if so, a certificate is issued.

In the game, the quality management system enhances the quality incre-ase factor in a production department, allowing for the production of high--quality phones. In order to implement a QMS it is necessary to have a research department with at least one engineer employed there.

Foreign trade

In the virtual world of the game, both the companies of the players and other business entities are located in particular countries. A company run by a user can always start trade relations with entities in their mother coun-try. However, the possibility of using the services of foreign partners appe-ars only after a company of a player starts its branch in one of the neighbo-uring countries.

Establishing a branch requires the purchase of a free investment plot in a given country. It is a very serious investment but thanks to this a player’s company may buy components, rent storage areas and order transport to entities in a given country. Apart from the changed economic conditions, a foreign branch is run precisely in the same manner as any other branch of the company. It is possible to establish organisational units and their results are included in the whole picture of a company state.

A company ownership itself still does not allow for calling for bids orga-nised by clients living in a given country. This possibility is opened only when a company meets the conditions of implementing ISO standards into its structure.

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Conditions of signing contracts for providing phones to operators are the same for citizens of the mother country, as long as the brand reputa-tion level is different in each country and thus requires separate marketing actions.

It is similar to the case of a trade department’s range. Even if some of the foreign clients happen to be within reach, a tradesmen’s range must not cross the borders of countries. Such a client may be reached by means of organising a trade unit in his or her mother country.

It is worth mentioning that there are no distinctions of currencies and therefore notions connected with exchange rates are omitted. Customs mechanisms were also ignored to make the game easier.

Credits

The game offers two options of obtaining sources which would finan-cially facilitate a company’s business activities by supplementing current means coming from the sale of products. These are investment and current credits. Banks can give credit to a company if it meets a range of require-ments. In the game, decisions concerning granting of credit are made by the system, on the basis of the company’s solvency and financial condition, based on the grounds of the last several periods.

Solvency

In the game, solvency has been simplified to a company’s property col-lateral statement. This collateral includes:

• The current amount of owned cash.• The value of owned buildings, according to the total which would be

procured at their complete degradation.• The value of owned invest plots.• The value of owned ready products according to an average market

price.• The value of owned components according to an average market

price.With raising a credit, company’s solvency is reduced by a half of the

credit’s value.

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Algorithm for calculating interest

An algorithm simulating the calculation of the interest rate for credit, and adopted in the game is as follows:Op = T(P(n)/W(n)). where: Op – interest rate. n – The number of periods which must pass from the time of establishing the company to define their financial results (i.e. for two periods). P(n) – Total revenue from n periods. W(n) – Total expenditure from n periods. T(x) – Function of calculating the interest rate from the chart, wherex – Relationship between Total revenue P(n) and Total expenditure W(n).

An example of an interest rate chartx. T(x) for Investments. T(x) for Currents.

Lower than 0.3 2.0 4.00.3 to 0.8 1.7 3.40.8 to 1.2 1.5 3.01.2 to 1.7 1.3 2.6Higher than 1.7 1.2 2.4

Current credit

In a case of a current credit players are not committed to repay fixed installments, although at the end of each period, they bear the costs of inte-rest on the remaining capital of the credit. Players can always make the decision of a full repayment, or a part of the debt, simultaneously dimini-shing the amount of interest. An early repayment does not entail increased costs. It is possible to holds several current credits if the player’s solvency allows for it. Inasmuch as the interest rate of current credits is rather unfa-vourable, they can be a significant burden on a player’s finances.

Investment credit

In the game, the investment credit can be granted only if the investment goal is clearly established, i.e. the construction or expansion of a building or the purchase of an investment plot.

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Investment credit usually has a very favourable interest rate.The player applies for a particular number of periods that he or she will

need for repaying the debt and the system, as a response, provides an inte-rest rate. Unlike current credit, each installment of an investment credit embraces both an interest rate and partial capital repayment. In the follo-wing periods, the player bears the costs of the fixed rate. If he or she mana-ges to repay a part of the capital debt in advance, the installments will be lowered. It is due to the fact that the system independently follows the value of the capital due and the value of interests of this amount.

It is possible to raise several investment credits, as long as the company’s solvency allows for it.

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COURSE MATERIALS

SOME ASPECTS OF ECONOMICS AND ENTERPRISE

Factors of production

Factors of production are all tangible and intangible resources used it the production process of goods and services.

There are three major factors of production:• Primary factors- land or natural resources, forests, minerals, water,

soil;• Labour- human effort used in production of particular goods or

services;• The capital stock- machines, production facilities, additional

appliances and buildings previously raised by people.Recent authors have added to the classical list the forth factor called

entrepreneurship.The factors mentioned above are employed in a production process

to varying degrees. Therefore, they may be divided into those used once and others, which are gradually exploited. An enterprise may decide on production technology on the grounds of any particular factors which are available. Technology which mostly takes on the capital input is classified as capital-intensive, whereas the one requiring work is defined as labour-intensive.

Want to read more? See: M. Księżyk, Ekonomia, AGH Uczelniane Wydawnictwa Naukowo-Dydaktyczne, Kraków.

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COURSE MATERIALS

Rules of a rational choice theory

The limited nature of resources is the main cause of the implementa-tion of a rational choice theory. The most important aspect of this is wise decision-making concerning a frugal exploitation of resources and factors of production within a company.

The rules of the rational choice theory are methods helping an economic unit to achieve the highest profit along with a previously set expenditure, or aims at cost minimalisation along with a definite profit level. The first vari-ant is called utility maximisation, the second expenditure minimalisation.

The rules were created along with the intensification of production development and deepening interaction between various economic enti-ties. Eventually, it led to the creation of the final assumption of an enter-prise which is profit maximisation.

Want to read more? See: red. Bożena Borkowska, Grażyna Wrzeszcz--Kamińska, Ekonomia, Wydawnictwo Akademii Ekonomicznej im. Oskara Langego, Wrocław.

The market and the competition

The forms of the market are distinguished according to the intensity of competition. Hence, there are four basic types:

• Perfect competition.• Monopoly.• Monopolistic competition.• Oligopoly.In the case of perfect competition, no participants are large enough to

have the market power to set the price of a uniform product. The prod-uct sold is homogeneous (each producer provides a product at an identical price). Producers can both easily enter and leave the market and the state does not interfere with the market processes.

Different conditions prevail in the market where there is a monopoly buyer (demand monopoly) or a seller (the monopoly of supply). Monopo-list sets the price and sells the product to any buyer or buy from any vendor depending on the type of monopoly. Goods sold on the market do not have substitutes.

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COURSE MATERIALS

Another form of the market is monopolistic competition, which is char-acterised by many actors who seek to obtain a monopoly in its market seg-ment. Any company can, to some extent, influence the attitude of its own prices to the prices of competitors. Typical here is a large diversity of prod-ucts which are substitutes for each other.

The final form of the market - there is an oligopoly of several partici-pants on the supply side or demand side. Their pricing decisions are inter-related. Companies provide to the market the same product, with no pref-erence as to the buyers.

Want to read more? See: M. Nasiłowski: System rynkowy. Podstawy mikro- i makroekonomii, Polskie Wydawnictwo Ekonomiczne, Warszawa.

The market, supply and demand

Markets enable relationships between purchasers and sellers of goods and services. In some cases, like at a local fruit stand, buyers and sellers meet in person in order to close the deal. In others, like on the stock exchange, transactions can be carried out by means of computers. Therefore, the market should not be understood as a physical place, but primarily as a process. The market stands for an economic mechanism which determines the dependency on buyers’ decisions on what, where and at which price to purchase goods, and producers’ analogical ones, which results in a settlement of prices.

There is a restless competition among entrepreneurs. By its proxy, market participants willing to prove lucrative, attempt to offer goods more attractive in terms of a products’ price, quality, overall look, package or even the kindness of sellers, in order to make a successful transaction happen. Therefore, from the definition of the market, the following can be distinguished:

• Purchasers’ and sellers’ parties, responsible for supply and demand creation, who are market as agents.

• Goods which are the object of the market.• Relationships between market agents and goods, which is a price.Demand is a term which refers to one’s the ability or willingness to buy

a particular commodity at a given point of time. In other words, demand is not one particular purchase, but rather a given set of combinations, which may be purchased at different price levels of a given article. A demand curve

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is a graphic depiction of demand, which shows the combinations above, assuming that other factors are not being changed. Changes in demand can be influenced by factors dependent and independent on a price. The latter ones consist of consumers’ earnings, fashion and psychological factors, prices of complementary goods which are the ones being consumed along with a given product, in order to live up to certain needs (like a car and petrol, a door lock and a key; if a complementary product gets more expensive, the demand for the second product will decline, inasmuch as the consumption becomes relatively higher). Others are prices of substitute goods, which can replace given goods and at the same time fulfil a particular need (like a car and a train, bread and baguette; if the price of the substitute article rises, products connected with it become relatively cheaper and the demand for them will increase), the quality of goods offered and other factors.

Supply, describes, analogically to the demand, not one particular para-meter of sale but rather a certain class of various combinations which may be delivered to the market at different price levels of given goods. A graphic depiction of the phenomenon, the so-caller supply curve, presents the com-binations mentioned, with the assumption of the remaining factors inva-riability (ceteris paribus). Analogically, like in the case of demand, changes in demand can be influenced by factors dependent and independent on a price. The latter ones can be, among all, production costs, fashion and psychological factors, the quality of offered goods, production technology and others.


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Types of business entity

Polish law provides for eight legal forms of a business entity, which are:• Sole proprietorship.• Civil partnership.• General partnership.• Limited liability partnership.• Limited partnership.• Limited partnership with shares.• Private company limited by shares.• Public limited company.The first one is a sole proprietorship, which can be run by an adult natu-

ral person with full legal action rights. This form of a business enterprise has two major advantages which are, respectively, a relative easiness of establishing it and no capital requirements attached to it. However, a major drawback of the sole proprietorship is unlimited liability where, in a case of a business failure, the owner’s personal assets can be taken away. Often the sole proprietorship evolves into another, more developed, form of an enterprise.

Another type of an enterprise is a civil partnership. The legal basis for it is set by the civil code. The contract is concluded by several persons who commit themselves to pursue a common goal and make their contribution, i.e. in a form of objects, rules or services. A civil partnership does not have a juristic personality and each member is equally committed and entitled to run the affairs of a company, except when a contract says otherwise. It also implies that partner are equally entitled to share in any financial profit and take responsibility for losses. Additionally, partner are directly respon-sible for a company’s obligations with their own estate.

The next type of a business entity is the general partnerships, which is regulated by a general partnership code. There are several variants of a general partnership, which are respectively: ordinary partnership, limited liability partnership, limited partnership, limited partnership with shares, private company limited by shares, public limited company.

An ordinary partnership is a general partnership where a contract must be signed in writing. The trade name of an ordinary partnership must consist of at least one of the partner’ surname (or his or her company’s brand) and an additional attribute of “ordinary partnership”. Partner together are fully responsible for all the company’s commitments, but a creditor may embark

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on an execution against sums due and property rights of an accomplice only if an execution concerning joint property fails.

A limited liability partnership is created by means of signing a contract by partner who normally work as white-collar officials (lawyer, architect, pharmacist, construction engineer, expert auditor, insurance agent, tax advisor, stock broker, investment advisor, accountant, physician, dentist, veterinary surgeon, notary, nurse, midwife, solicitor, patent attorney, real estate appraiser, certified translator). A contract is in the form of a notarised act, and partners have a right for an independent company representation or they can charge the company’s executive board with representation and running affairs of an enterprise. Due to a high risk of lege artis failure, there is no joint and several liabilities.

The basic specification of a limited partnership is unlimited liability of one partner (general partner) to creditors and limited liability (to a limited sum) of at least one of the partner. It means that a general partner also has a limited influence on a company’s functioning. Additionally, a general part-ner both represents and runs the agenda of an enterprise.

A similar form of running a company is a partnership limited by shares. One of the partner is entirely liable to creditors (general partner), whereas at least one is a company’s stockholder. The capital requirement in this case is 50,000 PLN. The most significant difference between a limited partner-ship and a limited partnership with shares is the fact that the latter raises capital by means of issuing shares, which allows for an extra capital accu-mulation. The company’s affairs are run by general partners.

Another form of business entity is a private company limited by shares, which has a legal personality and is classified as a general company. The capital requirement in this case is 500 PLN. Current affairs are run by a company’s board, whereas resolutions are passes during board meetings. In the case of private companies whose stock is higher than 500,000 PLN, there should be a board of supervisors or a board of audit included in its functioning. A big asset of this type of an enterprise is a smaller risk per-taining to running a business in general. Partners are financially liable according to their share.

The last form of a business entity is a limited company. The capital requirement is 100,000 PLN, which at the same time constitutes a com-pany’s stock. Stockholders are not responsible for a company’s obligations, and overall supervision is left to a board of supervisors. A given company is represented by its board, and the most important organ is a general assem-

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bly of shareholders. One of the advantages of such a company is the pos-sibility of big profitable ventures requiring a significant financial input.

Want to read more? See: G. Ziółkowski, Działalność gospodarcza 2009: zmiany i nowości, Infor, Warszawa.

COMPANY MANAGEMENT

Management – definition, stages

Management is focused on the future of the selection process for the purposes of business development. This is a decision-making process that shapes future events and the company’s position in the business environ-ment, and the future of its structure and culture.

Efficient management is to provide the company with a sustainable existence and long-term prosperity. It combines aspects of financial, mar-keting, production, and (more recently) innovative, ecological and social factors. Management, in practice, is a form of activities related to the deci-sion-making process regarding the optimal use of resources:

• Material - work process management, production management, assets.

• Capital - financial management.• Human resources - staff management.• Information - IT management needed for effective decision-making

and implementation of tasks set.In practice, management is accomplished through the combined set of

management functions, among which are: planning, organising, co-ordi-nating, motivating and controlling. In today’s competitive and global busi-ness, management is regarded as one of the main factors of success.

Want to read more? See: A. Koźmiński, W. Piotrowski: Zarządzanie. Teoria i praktyka, Wydawnictwo Naukowe PWN, Warszawa.

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Mission, vision, strategy

Each business exists for a specific purpose, in time and place, pursu-ing its strategy. Success in sustainable development is achieved through the effective use of resources owned by the company and their transformation into products and market services, which brings profit.

Management features which facilitate the proper orientation of the company’s development are: mission, vision and strategy. They represent a kind of signpost, setting out the direction in which the company will have to follow, and which types of activities will be developed by them in the future.

Vision is the starting point for formulating a strategy for the operator. This is a specific description of the company’s image in the distant future, assuming that it achieves all the favourable circumstances for its development. Vision is sometimes equated with the ideal concept of the organisation which should be achieved in the future. A properly formulated vision must match the aspirations and dreams of the owners and board of directors about the future shape of the company, its size and success. Often served as a model example, is Coca Cola’s vision: “... Put a Coke within reach of every consumer in the world.... “

Mission is a kind of certificate of the company’s basic values, identity and organisation. It identifies key areas of value creation across the organisation, its concepts, the role and meaning of its existence, success criteria, and key operating principles, as well as the sphere of responsibility (e.g., the social aspect of the business), binding to their responses to the questions: what do they expect of the stakeholders (clients, customers, observers, media, government, society) and how to act to meet their expectations. For example, LOT Polish Airlines has defined its mission as: “... We are a national carrier that combines a long tradition with modern technology and organisation. We offer our services to meet the needs of customers and to strengthen our position as a leader in the airline’s routes to / from and through Poland. We have developed our own network of domestic flights, European and intercontinental, and the alliance will provide global network creation. Acting on one of the largest and fastest growing European markets, we do achieve profitable growth and an ade-quate return on capital. We provide employees, in return for their efficient operation, attractive terms of employment and professional development opportunities.... «

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Strategy co-ordinated planning, which gives guidelines for decisions and actions in the company. It aims to make use of its resources in the most profitable way and for the company to implement its long-term goals.

Want to read more? See: A. Koźmiński, W. Piotrowski: Zarządzanie. Teoria i praktyka, Wydawnictwo Naukowe PWN, Warszawa.

Planning and decisions: strategic, tactic and operational ones

Planning is one of the most important elements of a company’s mana-gement. It is based at directing the courses of action and making decisions consistent with them. Well-planned activities are a key factor for the busi-ness success.

One of the most important stages in planning is to establish goals, define what a company wants to deal with, what its needs are and what it wants to achieve. In order to properly set the goals, the company needs to consider their resources and internal factors, as well as the general economic situ-ation and the environment in which it operates. The tool for this kind of research is a SWOT analysis of strengths and weaknesses of the company (internal factors) and its opportunities and threats (external factors). As a result of this strategic diagnosis, a company receives information on poten-tial directions in which they may be developed and areas that pose the most problems. Based on these results, it makes decisions relating to the conti-nued functioning. These decisions may vary in scope and character. The main types are listed in the chart:

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Decision characteristics.

Decision type.Strategic. Tactical. Operative.

Type of prob-lem.

Directions about a company’s develop-ment.

Providing condi-tions for the smooth implementation of the objectives.

Optimal use of resources.

Core of the problem.

Allocation of total resources, depending on the options set out by the environment.

Resource manage-ment. Resource use.

Most impor-tant goals.

The tasks and strate-gies in finance and marketing.

Obtaining the neces-sary resources, and their development.

The organisation supplies, outlets for products, process control.

General. char-acteristics of the decision.

Centralised deci-sions, taken for long periods of time.

Solve problems between its strategy and its execution.

Decentralised, often taken for shorter periods of time.

Management practitioners emphasise that the planning process, altho-ugh extremely important, is to conduct the relevant studies which give a true picture of the company, the most vital of which is to adequately inter-pret the obtained results and make decisions based on them.

Want to read more? See: Kwartalnik Naukowy „Organizacja i Zarządzanie” [available at: link].

Organisational structure

Each company has its organisational structure, which is a set of fixed hierarchic and functional dependencies among its particular elements.

The basic element of the organisational structures is singular job posts. Subsequently, they are grouped into specific organisational cells, and those, in turn, into organisational units. The whole schema of the organisational structure and the relationships between its particular elements are deter-mined by:

• Applied strategy, which determines particular communication channels, ordering lines between the manager and organisational cells, as well as influences on the mechanisms of planning and deci-sion-making.

• Size of the company; the more developed an economy, the higher the proficiency in the operations performed by particular elements of the organisation.

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• Technology, which influences the applied manners of co-ordination and the size of the appropriate organisational cells, as well as the level of decision making.

Management practice distinguishes companies’ three basic organisatio-nal structures: functional, productive and mother-structure.

1. An exemplary simple structure can be presented as:

The functional structure focuses on the basic tasks performed inside the company, which involve: marketing and trade, production, finance, and human resources (human resources management) and the ways IT use. This structure is relatively simple, where each employee has his or her competences clearly defined, and is implemented most often in companies of an average size and a rather undifferentiated product or service choice (often micro- and small companies).

2. An example of the productive structure is depicted by the schema below:

The productive structure allows for effective management of a company producing varied products. Within this structure, each of the production lines is treated as an independent business with its own separate marketing, finance and productive departments.

3. The mother structure is presented by the schema below:

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The mother structure is a crossing of the two previously mentioned systems. It is relatively developed and typical of big companies. It is particularly used in a case of international entities producing various products for various markets. All kinds of strategic and operative decisions are made collectively so that each department’s interests are taken into account.

It is extremely vital to shape the company’s organisational structure in such a way that it contributes to better and more effective company man-agement.

Want to read more? See: A. Koźmiński, W. Piotrowski: Zarządzanie. Teoria i praktyka, Wydawnictwo Naukowe PWN, Warszawa

PRODUCTION

Production planning

The aim of production planning is to determine the aggregate produc-tion plan for finished goods (specifying what, how and when the company intends to produce), transforming it into individual plans and adapt it to current market needs, so that production volume was adjusted to the maxi-mum size of the demand.

The initial step in determining the production plans is to define the objectives, analyse the market situation, schedule tasks, which determine the location and time specific actions, and any and all activities and opera-

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tions. It is important to meet customers’ requirements for the ordered products, their volume and delivery time.

The basis for the determination of production plans is the production cycle. It represents the time from the beginning to the end of the produc-tion process, which run into the next phase of production until the finished product. Hence, the plan covers all activities undertaken in the production, from the collection of materials through to a series of operations of a tech-nical nature, transportation, inspection, warehousing.

It is important that the plan was intended to maintain continuity of the production process through the elimination of unwarranted interruptions. This continuity has a positive impact on shortening the production cycle, so it enables the proper use of machinery and equipment, so that the level of labour productivity is maximised, which ultimately leads to lower costs. Another important issue is to manage the flow of materials, which allows you to maintain a proper rhythm of the rationalisation of the production processes and inventories. Production plans contribute to the maximum economically justifiable use of production capacity, [see article: Degree of capacity utilisation.].

Want to read more? See: B. Milewska, D. Milewski, Zarządzanie produkcją, Wydawnictwo Uniwersytetu Szczecińskiego, Szczecin.

Production performance.

Production capacity is the value of production per unit of resources used to produce it, expressed in constant prices. It is a measure of economic efficiency, which may relate to the whole company or its parts (faculties, units, and employees).

Due to the fact that the total factor productivity does not imply the rele-vant information, the specific rates for labour, capital and land are calcu-lated separately. This allows you to determine the effect of changes in indi-vidual factors on the overall efficiency of production. In the case of labour, productivity is the amount (in units, metres, kilogrammes, etc.) or value (in PLN, etc.) of production per one person employed. Performance in this case depends on effort, the quality of labour employed, and the effective-ness of managerial or technical expertise. Similarly, as is the case with other factors of production, the rates are calculated by multiplying the produc-tion volume to total expenditure, expressed in monetary units.

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Maintaining high productivity is an indicator of viability and its capa-city for further development. Companies are achieving higher performance gains that can be used for further investments, thus affecting their competi-tive advantage. Indirectly, productivity affects the standard of living of the society in the country, due to a wider availability of cheaper products and services.

Want to read more? See: L. Dwiliński, Zarządzanie produkcją, Oficyna Wydawnicza Politechniki Warszawskiej, Warszawa.

Quality of production

Production capacity is achieved by determining the best combination of production factors used in the manufacture of the product. Customer requirements and competition imply that the high production efficiency does not guarantee success itself. It is important to obtain the highest quality through the appropriate equipment in the company, appropri-ately trained staff and to take conscious action to control quality at every stage of product development. It means that quality is the result of the organisational work of all departments, which include design, planning and production preparation and the products themselves. Therefore, it is important to eliminate all the negative factors that affect quality of products and services in the enterprise. Internal standards define the level of quality and performance, as well as set limits of tolerance.

Ideas for maintaining quality are developed under the concept of Total Quality Management (TQM), which focuses on meeting the needs of customers, and its aim is to create an efficient production system. TQM assumes that each worker will be involved in improving business opera-tions through small improvements. It is important to optimise the syn-chronisation process and allows you to save time. This necessitates proper management of the company through the organisation of work, motivation and actions on society and environment, which are defined as the social responsibility of business. TQM assumes that the only long-term use of these methods is a competitive advantage.

A useful tool in the implementation of pro-quality activities is the Quality Management System, based on ISO standards 9001. This is a set of principles developed at the international level that aims at understanding customer’s needs and requirements. An organisation that

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meets the requirements of the standards can apply for the issuing of the relevant certificate. The certification process includes taking actions in the enterprise that lead to the implementation of document management and resource management, leadership involvement in the construction of a quality management system and planning processes. It is also necessary to measure customer satisfaction systematically, and the characteristics of processes.

Want to read more? See: R. Griffin: Podstawy zarządzania organiza-cjami, Wydawnictwo Naukowe PWN, Warszawa.

The degree of productive capacity utilisation

Production capacity is the maximum volume of production that it is possible to produce in the company, under normal circumstances, i.e. at the given machine shop, a fixed number of employees in time.

Capacity utilisation is measured, among others things, in natural units, in the amount of services rendered or the number of hours worked. Pro-duction and the production capacity can be increased by introducing a system of shift work on two or three shifts. In special cases, this increased work of the introduction of overtime and delayed maintenance work and repairs, is possible to achieve for some time, and thus the level of produc-tion exceeds production capacity, but this involves high costs.

It is also possible to create a situation of disposal capacity in the enter-prise. This means that some of the equipment is not used in production. This allows for quick response to increased demand and to continue pro-duction in the case of an emergency. However, the acquisition and retention of capacity requires a major investment, and this, particularly for smaller companies, is too expensive.

Looking at the sequence of the number of capacity utilisations from the perspective of the process of enterprise development - from inception to maturity - there are usually young companies with significant reserves of production capacity. A similar situation occurs when a mature company makes an investment - the first weeks or months, which are associated with the implementation of new technology, the learning by workers in han-dling the equipment and the use of part of the manufacturing capabilities. Along with making new business contacts and the acquisition of new con-tracts, growing businesses find that their existing resources (equipment,

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technology, and staff) have increasing difficulties in being able to respond to new orders. In this situation, management must decide whether to try to organise other current resources to improve performance (e.g. the incen-tive to run another organisation of the production processes and supply, decreasing downtime) or permanently increase the opportunities for pur-chase, rental or lease of new machines or equipment. This raises another problem: how will you finance the new spending, and how big is the risk that these expenditures are not covered by the gains achieved in the future. This is the role of the company’s management, in different areas, to bring about the best use of production capacity.


MARKETING

Marketing, marketing mix

Marketing means the appropriate planning, co-ordination and control over all the company’s activities aimed at current and potential markets. Marketing is often said to be a compilation of all available tools and pro-cesses connected with gaining information on the market, contacting with the market and affecting the market. Thanks to this, it is possible to create, via a company, the desired goods and values which will effectively satisfy buyers’ needs, expectations and wishes. Professionals often emphasise that identifying and satisfying the needs of clients are the most important ele-ments of marketing.

The main rules of marketing activities are:• The rule of an intentional choice and shaping of the company’s

market, such as the approach claiming that these are clients and their needs that matter most.

• The rule of market research, which is based on constantly diagno-sing the needs, desires and motives of potential buyers.

• The rule of the integrated impact on the market, which is influen-cing the market by a set of integrated tools, the so-called marketing mix.

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Marketing mix application helps a company to achieve synergy effects as a result of a various marketing tools used as a composition. It means that the final influence of mix marketing is much bigger than the sum of the effects achieved by using the same tools independently on each other (the synergy effect is sometimes expressed as the example 2+2=5).

The elements of marketing mix are:• A product, with an account of its quality, brand, package, additional

services, equipment, warranty, refunds policy, etc.• A price- method of fixing the price, discounts, payment deadlines.• Promotion- advertising, personal sale, direct marketing, sale pro-

motion, public relations, publicity.• Distribution- distribution channels, physical distribution, location,

transport, storage.Nowadays, elements like people, product placement, services or distin-

guishing factors, are becoming classified as elements of marketing mix.Want to read more? See: A. Wiśniewski: Marketing, Wydawnictwo

Szkolne i Pedagogiczne, Warszawa.

Advertising campaign

An advertising campaign is usually prepared by advertising companies (or sometimes by the marketing unit in a company). Before an advertising campaign is launched, a market analysis of the product and scrutiny of the target group has t to be conducted, which is to determine \which target group is seen as a potential receiver of a product or services. Subsequently, it is necessary to define the amount of money a company is going to spend for the campaign (the so-called marketing budget). What matters most is that starting a campaign is a choice of a key concept of the whole venture. The reflection of an advertising idea could be a graphic symbol, advertising slogan, music track, etc. Before an agency launches the main phase of a campaign, it is vital to choose the advertising carriers as well as determi-ning its reach. .

An advertising campaigning depends largely on:• Creating advertising transmissions and placing them in the appro-

priate media.• Carrying out research concerning advertising activity of competi-

tors.

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• Checking whether ad transmissions were released according to a contract.

An advertising campaign’s objectives may be determined in different ways. The most important ones are the main goals, which consist of:

• Marketing goals, such as introducing products on the market.• Advertising goals, which are derivatives of marketing goals, such as

information on promotion, image improvement, increase in brand awareness.

• Media goals, which stem from the advertising goals. These are cre-ating a percentage reach within a receiving group, notification, bro-adcast times, etc.

Advertising campaigns may be classified by various criteria. One of the most frequent ones is the division according to the content and goal of the campaign. This type of division is presented in the chart below.Content.

Goals.

Information. Imagery, symbols.Maintaining market posi-tion.

Information-oriented strat-egy maintenance.

Strategy focused on main-taining an image (image).

Change of position on the market.

Information-oriented strat-egy change.

Strategy focused on main-taining an image (image) change.

Advertising campaigns, operating in conditions of strong competition prevailing on the market, should choose the most appropriate kind of advertising strategy. A good choice will enable economically effective deci-sion-making pertaining to advertising activities in the company.

Want to read more? See: Robert Heath, Reklama: co tak naprawdę wpływa na jej skuteczność?, Gdańskie Wydawnictwo Psychologiczne 2008.

Advertising company

An advertising company is an entity dealing with all kinds of marketing activities, meeting orders of other institutions and companies. An advertis-ing company provides professional services connected with both planning and pursuing an advertising campaign. When it comes to the range of ser-vices and the profile of such an enterprise, it may embrace, among others, an analysis of the market, marketing planning, contact with the mass media and the evaluation of a conducted campaign. An agency creates advertise-ments of various kinds, i.e. on the TV, radio and the Internet.

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Want to read more? See: Leksykon marketingu, pod red. J. Altkorna, T. Kramera, PWE.

Brand and logo

The notion of a brand may be considered in two ways. In a narrow sense, a brand is exclusively identified with a product identifier (product), whereas in the broader sense, a brand stands for a juxtaposition of all the advantages connected with a product for a user. The first meaning presents the brand as a particular name, term, graphic symbol or a combination of these elements, aiming at identifying the brand with a product, sales-man or saleswoman, or salespeople’s services, as well as the distinction of a product offered by the company when compared with the competition. On the other hand, the broader approach defines the brand as a group of economic, psychological and functional advantages for a potential user or consumer, stemming from the purchase of an offered product.

A logo is a graphic symbol which enables promoting a company and its products. From a graphic perspective, a logo may take on various forms. These may be i.e. spatial compositions, a company’s name and/or abbre-viation, as well as melodies or their combinations appearing as broadcast stations’ identifications (i.e. the BBC signal). A brand and logo contribute to better product recognition on the market, and this should entail a posi-tive influence on the level of trade concerning a given product. The market position of a brand is built by an appropriate marketing strategy and brand management.

Want to read more? See: Leslie de Chernatony, Marka, Gdańskie Wydaw-nictwo Psychologiczne, Gdańsk.

Brand management

Brand management is a course of dealing with an image of a brand, which is to contribute to its enhanced recognition property and its actual perception (i.e. Volvo- safety, McDonald’s- fast service).

The process of management conducted by means of building a dura-ble and solid brand position enhances a company’s competitiveness. Brand management objectives consist of:

• Determining the desired image of the brand.

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• Evoking loyalty towards the brand.• Determining the look and symbol of the brand.• Sustaining or increasing the value of the brand.• Opinion control concerning the brand in the relation with compe-

tition.• Determining the lifespan of the brand.• The brand withdrawal from the market.In order to achieve the goals mentioned above, a company should

ceaselessly react to changes taking place inside and around the organisa-tion. Strengthening the company’s position on the market is influenced by the choice of a brand developmental strategy. This kind of development requires a consistent view concerning the company’s own brand, identified on the grounds of the opinions of the people who are directly involved in the process of the brand’s value enriching. Brand management is strongly connected with branding, which is the building of the brand awareness, based on creating and consolidating a positive image of a particular brand.

Want to read more? See: Grzegorz Urbanek, Zarządzanie marką, PWE, Warszawa.

Rights and obligations of seller and buyer

By entering into transactions of sale, both parties assume certain rights and responsibilities. The primary responsibility of the seller is to ensure the quality and safety of the product offered, in accordance with current standards. In light of the law, the seller is responsible to the buyer if the item sold has a defect that reduces its value or usability. The seller shall also be liable when the subject of the sale (goods, service) does not have jurisdiction, the existence of which has provided the purchaser, or if the product was released in an incomplete condition. In such cases, the seller is obliged to repair or replace the item with a new one in accordance with the scope of the warranty granted. The seller should not let defective goods on the market, not only because of the cost of subsequent repairs, but also because of the care of the good reputation of the company. Today, in an era of increasing competitiveness among businesses, it is vital to reassure the customer and to build a bond of loyalty to him or her. In the long term, the improper fulfilment of obligations by the seller may result in additional

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losses, like the public dissemination of “defamatory” information by disap-pointed customers.

However, if a buyer goes to the fraudulent seller and is not satisfied with purchased items, he or she has a right to complain. Detailed conditions and the basis for asserting claims are determined in the guarantee.

Want to read more? See: The Office of Competition and Consumer Protection [go to page: http://www.uokik.gov.pl/]

Spontaneous and assisted brand recognition.

Brand recognition means its correct identification by consumers as the one they previously had contact with, saw it or heard about it. Brand reco-gnition together with brand memory, which is a consumer’s ability to recall a brand name in a situation when he or she looks for products or services satisfying a given need, is included in the overall process of brand aware-ness. In practice, brand awareness is a competitive aspect among consu-mers, which facilitates the sale of products and services.

Brand awareness may take on various levels of intensity. They depict pro-babilities and easiness concerning the brand’s recollection at the moment of the clients’ shopping process. The theory of market research distingu-ishes between four main levels of brand awareness intensity which are, respectively, a lack of brand awareness, brand recognition, brand memory and brand priority in the consciousness of customers. The most important indicators used in the awareness evaluation are:

• Spontaneous awareness, which is a percentage of a target group that is able to provide the name of a brand with no assistance of a rese-archer.

• Assisted awareness which is a percentage of a target group that dec-lares familiarity with a brand after a researcher reads it out loud.

• TOM (Top of Mind) awareness which is a percentage of a target group that indicates a given brand as the first one in the research (the first one which comes to respondents’ minds).

Such research of brand awareness and its results are precious informa-tion for a company. They help to determine the market position of a given product and allow for applying the most suitable marketing strategy.

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Direct and indirect sales

Manufacturers can choose many ways to distribute their products manu-factured or services. In practice, there are two main distribution channels: direct and indirect:

• Direct distribution channel.• Indirect distribution channel.Direct distribution channel is also the shortest distribution

channel. It occurs when a manufacturer sells its product directly to the final buyer (often determined as the final consumer or final recipient). It is used when the number of buyers is small and the traded goods are perishable, such as fresh food sold on the market. Currently used forms of direct sale include:

• Sale via the Internet.• Direct sales at the client›s house.• The organisation of promotional meetings in homes.• Sales via ost.• Tele-marketing• Sales via television.• Sales through the manufacturers’ own stores.At indirect distribution channel manufacturer uses at least one cell of

an intermediary. In practice, there are several common, typical, indirect distribution channels:

• One-level channel in which there is only one intermediary between manufacturer and retailer. PRODUCER- > BROKER - > RETAILER.

• Two-level channels, in which the manufacturer is using two inter-mediaries (wholesaler, broker). PRODUCER -> WHOLESALER -> BROKER -> RETAILER.

• Three-level channel, which consists of three agents (minor broker, wholesaler, broker). PRODUCER -> MINOR BROKER -> WHOLESALER -> BROKER -> RETAILER.

Indirect sales are made possible by the existence of intermediateness (brokers). The broker is a person or company engaged in buying goods at its own risk and selling them at a profit. Indirect sales deal primarily with:

• Wholesalers, buyers of goods in large quantities and selling them mostly in smaller batches at a higher price.

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• Retailers buying goods from manufacturers and wholesalers, and then selling them to customers.

Want to read more? See: A. Czubała: Dystrybucja produktów, Polskie Wydawnictwo Ekonomiczne, Warszawa.

Sales documentation

Sales documents are written confirmations of the transactions of sales. Thanks to them, it is possible to register economic events. They contain all the information needed about the transactions, necessary for their subsequent accounting and billing.

The most typical and most common document for sales is the VAT invoice. This is a special type of account issued by entrepreneurs - payers of Value Added Tax (VAT). According to the provisions of the VAT Act, it must contain:

• Names and addresses of the seller and buyer and their NIP numbers.• Date of sale and date of issuing the document.• VAT invoice and a number of the following invoice.• Name of the goods or services (subject of the transaction).• Unit of measure and quantity of goods sold or the nature of the

services.• Unit price of goods or services without the tax amount (the net price

per unit).• Value of the goods or services covered by the sale, without the VAT

(value of net sales).• Tax rate.• Total net sales value of goods or services, divided into individual tax

rate, tax-exempt and non-taxable• Tax amount from the total net sales, broken down by the amount of

individual tax rates.• Sales value of the goods or services with the amount of tax (sales

tax), and the amount of individual tax rates, tax-exempt or non--taxable.

• Total amount with tax due (gross), expressed in figures and words.The invoice is issued in two copies, one for each party. At the same time,

one copy is the original and the buyer receives it, while the other is a copy for the seller. Moreover, if the need arises, the seller can issue a pro forma

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invoice. It is not an accounting document but only a prototype of the invo-ice, which is to be issued at a later time.

An alternative sales document used when the transactions are exempt from value added tax (VAT) is the account. Like the bill, the invoice is issued in two copies, where the original goes to the buyer, and a copy is retained by the seller. This document must contain:

• Names (or company name) and address of the seller and the buyer or the contractor and customer service.

• Date of issue and serial number of the account.• Marked, clearly, with the words ORIGINAL or COPY.• Determination of the type and quantity of goods or services and

their unit prices.• The amount of claims expressed in figures and words.• Seller’s signature and a signature stamp, if the person uses it.In accordance with the law, the account must be kept by the seller for a

minimum of five years. If the sale is recorded by using a cash register, the sales document is a receipt, which includes:

• Name (name) of the taxpayer and the address (seat).• Taxpayer identification number of the person issuing the receipt.• Consecutive number of receipt.• Date and time (hour) of sales.• Name of the goods (services).• Unit prices of goods and services.• The value, rate and amount of tax on the goods and services.• The total amount of tax.• The amount due.• Logo and the memory number of the fiscal cash.Detailed information on the display, recording and correcting the sales

documents is included in the appropriate regulations.Sales documents also include: trade offers, contracts, tenders, letters of

intent, the insurance policy of the goods on the road, shipping documents and other documents generated in the process of concluding agreements and commercial contracts.

Want to learn the detailed regulations in this area? See: § 14.1 rozporządzenia Ministra Finansów z 22 sierpnia 2005 r. w sprawie naliczania odsetek za zwłokę oraz opłaty prolongacyjnej, a także zakresu informacji, które muszą być zawarte w rachunkach – Dz.U. Nr 165, poz. 137;

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§ 8.1, 9.1, 16.1 rozporządzenia Ministra Finansów z 25 maja 2005 r. w sprawie zwrotu podatku niektórym podatnikom, zaliczkowego zwrotu podatku, wystawiania faktur, sposobu ich przechowywania oraz listy towa-rów i usług, do których nie mają zastosowania zwolnienia od podatku od towarów i usług - Dz.U. Nr 95, poz. 798; ost.zm. Dz.U. z 2005 r. Nr 102, poz. 860;§ 4.1 rozporządzenia Ministra Finansów z 4 lipca 2002 r. w sprawie kryte-riów i warunków technicznych, którym muszą odpowiadać kasy rejestru-jące, oraz warunków stosowania tych kas przez podatników - Dz.U. Nr 108, poz. 948; ost.zm. Dz.U. z 2004 r. Nr 85, poz. 798.

The current legislation you can find at the pages of the Polish Sejm: http://www.sejm.gov.pl/]

Trade credit

Trade credit, sometimes called a merchandise credit, is one of the tools that enables companies to effectively compete on the market and increase sales and profits. It involves the sale of products, goods and services with deferred payment. It involves the sale of products, goods and services with deferred payment (the seller and the buyer are to arrange that the buyer receives the item, product or service “in stock” but payment will be defer-red, and will be paid for within a specified period, e.g. two weeks). This allows firms, to gain customers who currently do not have enough cash to finance purchases. At the same time, such a sale on credit has a positive impact on strengthening co-operation and gaining customer loyalty in the future.

Entrepreneurs, in order to encourage contractors to make their pay-ments earlier rather than defer them, as indicated on the invoice, give cash discounts. The buyer may then use the discount and settle the payment immediately, or pay the whole amount at a later date using trade credit.

Companies providing trade credits usually do not have sufficient reso-urces to fund their own claims arising as a result of deferment of payment. Sometimes they themselves are forced to resort to bank loans. Related costs are then reflected in the price of products sold. Therefore, the cost of trade credit to the borrower, despite appearances, may be higher than alternative sources of financing, such as bank loans.

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Guarantees, warranties, complaints

The company producing the products is required to take responsibility for their quality, and should provide a specific time period of their perfor-mance and a utility deadline. A formal statement from the manufacturer of a product’s reliability and a commitment to the repair or replacement if it becomes defective is called a warranty. Legal specifics of a warranty reduce the risk connected with buying the product. The manufacturer may provide a full warranty of the goods sold, but may also determine the extent of its liability by providing a limited warranty. On the other hand, a guarantee determines which steps will be taken by the manufacturer if the customer is dissatisfied with the product or service and then decides to make a complaint, or request a repair or replacement of the defective goods or repair of operations carried out within the service. Guarantee conditions, such as its duration and scope (which define what is covered by service), in each case are fixed by the manufacturer. However, in order to better protect consumers’ rights, the most important issues related to the warranty, guarantee or complaint shall be determined by the Civil Code and other specific provisions of law.

Want to read more? See: The Office of Competition and Consumer Protection [webpage: http://www.uokik.gov.pl/]

Interest rates

The most important cost of a loan is its interest rate. The value of an interest rate is a derivative of several factors, among which a bank’s margin and a basic interest rate are the most important ones. In turn, the basic interest rate is a derivative of two factors. The first one is a base rate and another stands for bank’s prime costs.

The base rate of loans in the Polish currency is WIBOR, whereas in the case of loans in a foreign currency is set according to EURIBOR (EURO) and LIBOR (Swiss Franc).

These interest rates are determined for different periods, from those of a few days to even a year. In practice they constitute a cost at which a bank “buys” money on the international market from other banks. In the case of credits, these are usually three-month periods, which are applied.

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The bank’s prime cost level, expressed as an interest rate element, is strongly connected with administrative operating credit transactions like salaries, rents and infrastructure maintenance, various kinds of taxes, etc.

Margin is the bank’s remuneration for the risk which it undertakes while “lending” money to borrowers. Therefore, the margin is determined by the bank individually, depending on the assessment of risks associated with granting credit to certain customers, or specific groups of customers.

Interest on bank loans can be fixed or variable. Specified in the agre-ement, the fixed rate is constant throughout the duration of the loan, so when taking out a loan in advance, you can calculate the value of the inte-rest to be paid. In the case of the floating interest rate, the amount of inte-rest depends on the adopted base rate, which varies with changes in the financial market situation. However, the margin is usually fixed, and fixed in advance for the entire duration of the loan agreement.

More about interest rates: [go to: www.bankier.pl]

Collateral

Collateral serves a necessary element of every credit contract. From a bank’s perspective, the most important is the good financial situation of a company. In such a situation, collateral does not take on any particular signed form, and comes out rather as a result of a positively assessed sol-vency. However, sometimes it happens that this condition is insufficient. Depending on a company’s credit rating, the amount of credit and the credit period, banks can request various additional legal forms of collateral. There are two main types legal collateral: personal and material. Personal collateral is characterised by a personal responsibility of a loan debtor. It means that he or she is responsible with their whole property and wealth. Basic forms of personal collateral are respectively civil guarantees, bills of exchange, promissory notes or bank guarantees. The other group is mate-rial collateral. In other words, a debtor’s obligations are secured in the form of property such as real estate, mortgage, pledge or a bank account flow blockage.

The number of types of collateral and their value have a significant influence on the degree of a credit risk. High collateral reflect on a credit risk reduction, and consequently a decrease in interest rates. According to this, a company presenting its collateral attributes to a bank not only has

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a bigger chance of being granted credit, but also may obtain a favourable interest rate.

Want to read more? See: I. Heropolitańska, Prawne zabezpieczenie wierzytelności, Twigger, Warszawa.

LOGISTICS AND TRANSPORT

Principles of warehouse management

Warehouse accounting, when properly conducted, can highly facili-tate warehouse management. This may be provided as the current de facto control over the flow of goods, or in conjunction with the accounts. A rota-tion of inventory items is based on the documents which record the pur-chase, sale and movement of goods within the company. These include:

• Documents related to the adoption of the warehouse with supplies from the outside - contractors receiving .

• Documents of deliveries issued to a contractor.• Documents of internal receiving to a high capacity warehouse asso-

ciated with the supply from another company’s warehouse. No spe-cific contractor.

• Documents of internal issue (internal disbursement of high storage) associated with deliveries to another company’s warehouse .

• Documents changes location (internal document under the compa-ny’s high storage) associated with moving goods from one place to an address at a different location..

Want to read more? See: S. Abt, Logistyka w teorii i praktyce, Wydawnictwo Akademii Ekonomicznej, Poznań.

See examples of warehouse documents: [go to: link]

Warehouse management

Warehouse management is all the activities connected with both the gathering of and the storage of stocks and material goods. It embraces the units of means, organisational, technological, and economic activities, the

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goal of which is to provide for an efficient business. Activities connected with storage are primarily receiving, displacing, storage, packing, comple-ting, as well as the compilation of stock issuing, and complex stock mana-gement.

The kind and number of warehouses depends on a company’s applied strategy. There are warehouses distinguished as open (storage yard), half-open (island-station roofs, sheds), closed (low- and high storage) and spe-cial warehouses which include silos for loose goods, reservoirs for inflam-mable materials and fruit repositories, refrigerators, etc.

The effectiveness of storage management is strongly connected with the minimisation of unitary costs of storage. These costs are connected, above all, with effort, space and equipment. What matters is a rational usage of storage areas and machinery devices. It is necessary to schedule the sequence of activities and their synchronisation with a company’s require-ments.


Transport

Transport means displacement of material goods in time and space with the use of suitable technological means, which constitute a transport infrastructure. Efficiency of transport processes is particularly important to the proper and effective functioning of a modern economy.

The most important aspect pertaining to transport is infallibility in the flow of goods, which reflects on product delivery in a due time, to a required location according to all the dispositions. What also matters is a reduction of transport expenses, which is convergent with the choice of the kind of transport, particular transport means, and the optimisation of infrastructure, and the time of crossing.

There are five basic distinguished branches of transport are:• Rail transport.• Road transport.• Pipeline transport.• Inland navigation transport.• Sea navigation transport.• Air transport.

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In national transport, the first three branches play a vital role. Foreign trade is primarily operated by sea navigation. Air transport, due to limited tonnage transport capacity, plays a rather secondary role.

Transport infrastructure consists of all kind of roads, transportation spots such as airports, train stations, auxiliary facilities helping in opera-ting both roads and transport spots. In order to serve its functions, high financial expenditures are unavoidable, often within serious, long lasting venture gains.

The basic criteria for selecting a suitable transport means are their reli-ability, cost reduction, optimal protection of goods against damage, and additional logistical services implemented by specialised transport com-panies.

Want to read more? See: Z. Piątkowski, M. Sankowski, Logistyka, Wydawnictwo Wyższej Szkoły Ekologii i Zarządzania, Warszawa.

Freight forwarder

A freight forwarder is a person or a company that organises the shipment of goods via carriers such as trucks, ships, railways or airplanes. His or her duties consist of:

• Activities connected with all kinds of formalities including signing contracts, preparing documentation, etc.

• Safekeeping of consignment and protection over it.• Preparation for shipment.• Delivery to and from the carrier.• Informing a client on the current location of a product during its

shipment.• Insurance of the freight.The freight forwarder is also supposed to serve a role of a carrier, com-

mission merchant, store keeper, agent or representative i.e. in the case of reporting goods for custom clearance.

The basic objective of a freight forwarder is organising transport by using its all branches. This function has a significant influence on the whole transportation system rationalisation.


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Shipping lists

A shipping list is an important document issued when sending a consignment, but at the same time, unlike a bill of landing, it does not make for a security. It is merely evidence of a transportation agreement. It contains information pertaining to the location and date on which the consignment was sent, address, name of the sender, target location, trans-port charges, and detailed data on the consignment itself- type, quantity, unit price and other, additional information on the goods.

A sender is obliged to attach legally required documents to the ship-ping list. Sometimes, in special cases, they may be delivered later, but early enough to carry out all the obligatory procedures connected with trans-port. Very often shipping lists serve as a basis for a customs inspection and fee. Sometimes a shipping list is confirmed with a certificate of accordance, which is issued by an entitled external or internal unit.

Want to read more? See: F. Kapusta, Logistyka, Wydawnictwo Wyższej Szkoły Zarządzania i Marketingu, Wrocław.

The course of the transport process

The transport process starts with the sending of goods, and finishes with their delivery to a target location and handing them to a receiver. It contains two elements. The first one consists of loading, transport, reloading and unloading. The second one is forwarding, which both starts and finishes a transport process. Forwarding consists of load preparation for shipment (mainly complementing), temporary storage, organisation of transport and turn over- receiving activities.

A transport process starts with a forwarding analysis pursued by the main logistics engineer or the specialist in transport, as a result of which a transport contract is signed. The schedule of sending and the re-collection of the load is developed within the commodity flow co-ordination.

Having completed the activities mentioned above, the load is to be packed and safeguarded. A responsible person checks transport documen-tation and, if need be, replenishes shortages. The next stage is to prepare the load for transporting and the final realisation of the transport. After delivering the load to the receiver, there comes the settling of accounts and transaction closure.

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Due to the need for a company to have efficient maximisation, it is vital to provide continuity in the delivery of goods within a transport process. Therefore, logistic department employees are responsible for choosing the most beneficial (optimal) route and transport means, along with the lowest costs possible.

Want to read more? See: Z. Piątkowski, M. Sankowski, Logistyka, Wydawnictwo Wyższej Szkoły Ekologii i Zarządzania, Warszawa.

HUMAN RESOURCES MANAGEMENT

Training

The aim of training is to develop workers’ skills, which can increase a company’s competitiveness and contribute to its development. The employ-ees are then able to expand and improve their knowledge and prepare themselves to play a new professional role.

Very often, training plays an important role in the adaptation of new employees. They have the opportunity to implement themselves into the company activities, learn about its mission and strategy. It is also an oppor-tunity to get to know the current value system in the organisation, work processes, and the relationship prevailing between the employees.

The intensity of training depends on the strategy adopted by the com-pany and to the applicable regulations.

The company may be aim at reducing the cost by searching for work-ers with the appropriate qualifications, who do not require participation in training and will accept certain standards to engage themselves into pre-scribed roles.

Another direction taken by the company is a development strategy. In this case, the company puts a strong emphasis on creative work, innova-tion and independent problem-solving. It is therefore important that the employee is open to new bold action. The improvement of these skills can be useful training.

Want to read more? See: Z. Janowska, Zarządzanie zasobami ludzkimi, Polskie Wydawnictwo Ekonomiczne, Warszawa.

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Remuneration policy

Remuneration policy is applied in an enterprise system for designating the components of remuneration and determining the rules for their establishment, awarding and updating their values. The policy pursued by any company is unique because of the specific conditions prevailing in it. Therefore, it is important to tailor individual wages to the requirements of the organisation.

In Poland, the wage systems still adopt the traditional form, often not binding with the company›s strategy. Rarely applied bonuses that are dependent on the efficiency of work and wage increases are not always associated with greater productivity.

The world is increasingly linked to the remuneration for the work; there is an increase in participation and the importance of variable part of the wages. Therefore, it is a strategic approach to wages, increasing their flex-ibility and employee involvement through the development of collective forms of pay.

The remuneration policy is dependent on external factors, such as: the labour market, competition, legislation and internal factors, which include the company›s strategy, its size, organisational culture, financial capital and human capital. Through an appropriate remuneration system, its construc-tion strengthens its position and the market value of the company, increas-ing efficiency, cultivates entrepreneurship and skills development. The pur-pose of the remuneration policy is, therefore, to attract good candidates for new positions and retain the best of current employees by motivating them.

There are following steps determining the remuneration policy:• Determining the company’s position on the market.• Determining the remuneration components.• Linking salaries with specific employees or job posts.• Determining the structure of salaries.• Linking salaries with work results.Modern remuneration policies include wage packet data systems, which

mean the deduction from the employer›s wages, bonuses, allowances, benefits and any benefits that would require the employee to bear certain expenses from its net income.

This package includes: fixed remuneration (basic salary, fixed allowan-ces, and colliery), short-term variable remuneration (bonuses and other or moving salaries), long-term variable remuneration (ownership, financial,

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insurance, savings) and the additional benefits (e.g. housing, transport, recreational, social).

The results of applying this pay packet is cost reduction, individual salary adjustments for employees, better impact on shaping the behaviour of workers and the swift and flexible response to changing market situation.

Want to read more? See: D. Denkiewicz, Wynagrodzenia, Infor, War-szawa.

The average wage

The average wage in economy is the average monthly salary, which deals with the calculation of the Central Statistical Office. For the determination of its size, they add up the gross salary costs, as well as fees paid to certain groups of employees under their contract of employment, payment of profit (surplus balance in the case of co-operatives) and additional annual wages and salaries for employees of a budgetary sphere. The average monthly wage is the quotient of the sum of the average number of employees in a given period, but the salaries of persons working abroad are not taken into account.

Factors that influence the level of the average wage in the economy are primarily: the rate of investment in the country›s gross domestic prod-uct, the growing number of jobs and the subsequent employment growth. A positive effect on wages has also been increased productivity and effi-ciency

The average wage in the economy acts as information, which affects the situation on the labour market. In addition, the average wage determina-tion allows the analysis of deviations due to different sectors of the econ-omy and how it affects the level set by the national minimum wage, or the minimum wage which may be established by a company.

According to the Central Statistical Office announcement, the average monthly salary in the enterprise sector, excluding payments from profit awards, from September 2010 amounted to 3,400.99 PLN.

Want to read more? See: R. Griffin: Podstawy zarządzania organiza-cjami, Wydawnictwo Naukowe PWN, Warszawa.

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Forms of employment

An employee may be employed under an employment relationship or other basis. An employment contract occurs when an employee is obliged under contract to the personal performance of work for an employer under his or her direction and in the time and place specified by him or her and the employer is obliged to pay the agreed remuneration. The employment contract may be concluded for an indefinite period or term. The specific forms of employment within the employment relationship are one part-time work, or work below the standards set out in the Labour Code.

Employment on a basis other than an employment relationship is mainly by a commissioned contract, where the contractor agrees to pro-vide a specific legal transaction for the principal. A service contract is an agreement for due diligence. Performance of the contract should therefore not be judged by results, reached when the receiving order, but by his or her conscientious and diligent performance

Another form of employment in this group is contract work, in which the employee undertakes to perform the designated work, and contracting for the payment of remuneration. The result of contract work can be both a physical effect as well as intangible, but it must be agreed in advance in the contract.

Other employment outside the employment relationship should be an agency contract (continuing assistance when signing contracts with customers for the principal operator, or to conclude on its behalf) and self-employment, or running a business.

Want to read more? See: M. Boruch, Formy zatrudnienia i dokumenta-cja pracownicza: regulamin pracy i wynagradzania, regulamin zakładowego funduszu świadczeń socjalnych, akta osobowe, dokumentacja wypadkowa, sposoby nawiązania i ustania zatrudnienia, rodzaje umów o pracę, Wydaw-nictwo Wszechnica Podatkowa, Kraków.

Non-wage costs

Expenditures incurred by the company in connection with salaries con-sist of wage costs and non-wage. Components of non-wage are related pri-marily to social insurance, social welfare activities of the company, and the implementation of safety and health personnel.

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Labour costs are gross wages, which include deducting tax from indi-viduals, contributions to a pension, disability pension and sickness, which are paid by the employee. The employer pays a part of the premiums for pension insurance, pension and accident insurance. In addition, he or she bears non-wage related expenses connected with the training and retra-ining of personnel, etc.

Social security contributions are as follows:• Retirement: 19.52% total (to be paid equally by employer and

employee).• Disability - 13% (paid half by half by the employer and employee).• Sickness - 2.45% (by that staff member).• Accident-subject differentiation (entirely borne by the employer).

Total paid contributions represent 36.59% of salary (the employer pays – 17.68%, employee pays - 18.71%).Labour costs. Work load factor.Remuneration. Non-wage. Taxes

Insurance premiums Premiums for: -Labour fund -Guaranteed Employee Benefits Fund -Social Benefits Fund.

Directly related to the work and its effects.

Quasi-social (indirect).

OHS and other expenses.

Internal. External.

Want to read more? See: D. Denkiewicz, Wynagrodzenia, Infor, War-szawa.

A COMPANY’S FINANCES

Fixed and variable costs

In order to produce particular goods or services, a company has to meet certain expenditure for the purchase of necessary factors. All kinds of expenditure related to obtaining raw and other materials, half products, machines, buildings, energy or salaries for workers are called production

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costs. The analysis pertaining to the shaping of a cost level and structure, when compared to the level of earned revenue, helps to choose the most optimal quantity of goods produced. Thanks to this, a company can maxi-mise its revenue from the products, goods or services it sells. While ana-lysing changes in production costs during a short period of time (a short period is referred to as a time when production is based on one particular type of technology), it can be noticed that some dimensions of expenditu-res are changing according to the alteration of the produced goods quan-tity, whereas others remain the same. Production costs, the parameters of which remain the same, are called fixed cost. A company pays fixed costs even if it does not produce anything in a particular moment. This type of cost consists of various fees like rents or leases, operating costs concer-ning exploitation of machines and buildings (depreciation) or staff salaries. Spending, the level of which is dependent on the scale of production, is called a variable cost. These costs consist of such things as materials, half products, electricity, water, salaries for the stuff and others.

It has to be remembered that in the long run, all the production costs are variable inasmuch as a company may lease or purchase supplementary machines, change production technologies, employ new members of admi-nistrative staff and others

Want to read more? See: M. Rekowski Wprowadzenie do mikroekonomii, Poznań.

Break-Even Point

Break-even (profitability) describes a volume of production and sales, at which company’s revenues fully compensate for the all-in costs of an enterprise functioning. It is popularly accepted to use the acronym (the abbreviation of first letters in a given phrase) BEP. BEP marks a border between profitability and its lack concerning a given product. A company reaps a profit above this point, whereas below it sustains losses. It might be illustrated with the following diagram:

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Obviously, after reaching the break-even point, profits do not raise endlessly. According to the law of supply and demand, the bigger the sales, the lower the price is [check: The market, supply and demand]. It causes a curvature of the total revenue, leading to another decrease into a sphere of losses, which is depicted by the diagram:

Want to read more? See: M. Rekowski Podstawy mikroekonomii, M. Nasiłowski System rynkowy. Podstawy mikro- i makro-ekonomii

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Current credit

Current credit is a type of a loan granted to enable a company financing its current operations connected with its procurement, production, sales or meeting financial covenants.

Current credits are usually intended to be short-term ones, with a dead-line for repayment of up to one year. What matters most when applying for this type of a loan is a company’s credit rating. Moreover, there are several additional requirements, such as a sufficient sustainability for the request and sometimes a company’s reliable solvency. Usually banks do not require a company to explain precisely what the loan would be spent on. It is broadly intended to improve running a given business.

In practice, banks often impose additional demands. Inasmuch as each bank can freely place individual demands concerning its credit policy, it is worthwhile to scrutinise particular cases. For instance, in the BOS Bank, a potential loanee must have had a bank account there for least a three-month period. On the other hand, PeKaO SA. requires a history of a bank account, if it was held in another bank. Willing to be granted money from Fortis Bank, you have had to hold an account there and be able to present at least a year-long history record of an enterprise, which would serve as a reference point in assessing your credit rating. The situation is similar in the case of Deutsche Bank, with the difference being that a company must have been functioning for at least three years. PKO BP, BRE Bank or Raif-feisen Bank do not require you to have an account there, but by taking cur-rent credit, you have now to open an account.

The amount of money granted to a company depends on its economical and financial condition. The total might also depend on the sum and the amount of money circulating in a bank account. Sometimes banks make allowances for the value of a company’s sale rate (i.e. a current credit does not exceed 20 per cent of the value of one month’s sales).

Credit repayment may be made at one turn or take the form of instal-ments, which are usually due each month and at the end of the crediting period.

The costs of a current credit primarily consist of interests but also a number of additional payments and commissions. In the beginning, a would-be loanee has to pay for the application for credit to be considered. If the application is granted, a company must pay a fixed commission for the application having been considered. Other kinds of commissions are, sub-

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sequently, a commission for a credit increase within one contract, commis-sion for changes in the contract, extension of a payment deadline, change in a loan currency, etc.

The level of interest rate in zloty may reach umpteen per cent. The changing interest rate is usually based on the WIBOR rate or a bank’s inter-nal nominal one, with its individually set margins. Current credits are the most basic form of helping the majority of Polish enterprises in their cur-rent financial courses.

Want to read more? See: Z. Dobosiewicz: Kredyty i gwarancje ban-kowe, Polskie Wydawnictwo Ekonomiczne, Warszawa.

Investment Credit

An investment credit is a type of a loan granted in order to help a company with its developmental investments (like those aiming at the company’s generative potential development). It might be intended for the purchase of fixed means like machines, devices, transport or plant extensions, constructions or modernisation of all types of establishments (buildings, roads, manoeuverable sites) concerning a given business. Investment loans are granted depending on the sort of a venture, generally for longer time spans, which is from one to ten years and/or more. Moreover, a company and a bank may negotiate the form of the debt repayment as a total sum or divide it into instalments.

There are several conditions to obtain this kind of loan which requires an entity to prove a company’s financially favourable situation, sufficient solvency and a rationale behind the investment. It is also required to submit a prospective profit prognosis, guaranties issued by a bank, solid cost estimation modes and a well-prepared business plan.

Each time, a company’s solvency is determined by a banking institution accord-ing to its (the bank’s) individual internal rules and methods. Due to this, a company’s solvency might be assessed differently according to a bank responsible for this. It may be beneficial to apply for the investment loan at several credit institutions in order to compare their offers and choose the most favourable one.

In the process of company arranging a loan, banks always require sufficient finan-cial security. In practice, they usually prefer it in a form of a cautionary mortgage. Other practices exercised by banks might be the blocking of bank account, a demand promissory note or a transfer of a claim. Moreover, on the basis of a signed credit agreement, a creditor is entitled to control a company in terms of its efficiency in the financial means management. This aspect is particularly important in the case of com-panies which receive money in instalments. A bank can make payments dependent on the previous use of it, according to the actual realisation of its investment plan.

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Want to read more? See: Z. Dobosiewicz: Kredyty i gwarancje ban-kowe, Polskie Wydawnictwo Ekonomiczne, Warszawa.

Foreign investments

Foreign investments can be regarded as a form of long-term capital investment outside the country by the so-called resident, whom we can call the ‘direct investor’ or “mother company”. Resident is a company established within the country, operating in this country and abroad, while non-resident is an entity established abroad and working in another country. Investments are made with the intent to exercise control over a company in another country in the long term. Foreign investment can also be defined in two ways: as taking a new business from the ground outside your home country as well as taking over leadership in an existing enterprise. These investments are treated as part of corporate strategy searching for development opportunities in the expanding world market.

Foreign investment is usually carried out by a branch or a subsidiary of your own business in another state. A branch operates as a unit operating in the foreign country under the management of a business that is admin-istered by the parent company. Division in terms of ownership is 100% owned by the parent company and has no legal personality. It is therefore an integral part of the parent company. It is responsible entirely for its com-mitment. In addition, the branch is subject to restrictions on the rights of the country of origin, and as a country, of the interference of the local authorities› in its internal activities (employment policy, transfer of profits, and ownership of the means of production) is relatively small compared to other forms of investment. Of course, from the operational side (sales, warranty and guarantees, product quality, requirements for acceptance on the market) must respect local laws.

Branch requires a smaller commitment of capital (as compared to other forms of investment). The volume of capital that must be provided for its creation depends mainly on the nature and quantity of sales; less attention is paid to the scope of commercial activities (marketing). In some activities, for example, it is sufficient for a representative of the company to lease appropriate office space. In addition to the equipment, funding and business affiliates raises the problem of personal service. For the post of head of delegation, it is the parent company worker who has experience

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of working abroad. Candidates taken into account are both citizens of the host country and thecountry of origin.

The operations of foreign subsidiaries are generally based on imports from the parent company. The form of investment which is characterised by a subsidiary company is a permanent presence in a particular market. The branch carries out the tasks entrusted to it by the parent company which is subject to inspection and supervision by the parent unit. It creates the possibility of a direct impact on the management of foreign operations.

Want to read more? See: J. Rymarczyk, Internacjonalizacja działalności przedsiębiorstwa, Warszawa; A. Budnikowski, Międzynarodowe stosunki gospodar-cze, PWE, Warszawa.

Leasing

Operational leasing is a relatively popular method of financing an enterprise in Poland. The lessee is the receiver of the services or the assets under the lease contract and the lessor is the owner of the assets; this includes such things as the means of transport, production machines, buildings, parcels of land, or even a technological installation or software. A lessee does not become the owner of the given commodity, but gains a temporary, unlimited right to make use of and benefit from it. In exchange, the lessee has to pay a lease charge in the form of lease installments. The total of these equals at least the value of the asset on the day the contract was signed. In other words, it is a lucrative contract which benefits both parties.

Leasing is one of the most popular instruments for financing enter-prises, especially emerging ones, because, unlike credits and loans, it does not require a credit rating. After the contract expires, the lessor has the full right to keep the commodity, which constitutes an important security factor in the deal. A lessee who does not pay the lease charges forfeits the right to use a given commodity which is automatically given back to its lessor. Moreover, a lease contract often includes a passage on extra services, such as i.e. a commodity service.

Financial leasing is an alternative to the operational one. From the oper-ative perspective, it bears a significant resemblance to an invest credit.

More about leasing: [go to: link] [go to: link].

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Financial statement

A financial statement is to provide all the relevant financial information, presented in a structured manner and in a form which is easy to under-stand. It provides a basis for the assessment of a company’s financial and property conditions. Thanks to financial statements, it is possible to inquire about company’s generated revenues, costs, profits or what the real state of financial means is. A financial statement consists of:

• Balance sheet.• Income statement (Profit and Loss statement).• Statement of retained earnings.• Statement of cash flow.• Annex to a financial statement.The balance sheet is a basic element of a financial statement. It presents

a current statement of all the company’s assets and liabilities. Thanks to this, it is possible to create a broader picture concerning a company’s financial situation. While analysing a balance sheet, attention has to be paid to the elements of the assets’ and liabilities’ structure and their internal connections. It enables learning about which of the central elements capital is concentrating on, what constitutes the major source of financing of an enterprise, what a backlog is and what the precise value of a company’s particular elements is.

Income statement (Profit and Loss statement) is another element of a financial statement. It reports on a company’s income, expenses, and profits over a period of time. The Profit & Loss account provides information on the operation of the enterprise. These include sales and the various expenses incurred during the processing state. After ascertaining a company’s results, within particular realms of a given business and taking into account compulsory financial burdens (i.e. taxes), the net profit over a certain period of time can be derived.

Statement of retained earnings provides information on payment operations, which caused changes in the company’s funds. The legitimacy of preparing a statement on retained earnings stems from drawbacks in the rules of accountancy and methods of preparing balance sheets. In the light of the applied rules of accountancy, i.e. sales transactions, the term stands for a company’s profits. However, in reality, a trading day does not always prove to be a day of income flow for a company. It may come to a situation when a company, according to a statement of retained earnings,

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will show a profit, whereas, in reality, as a result of i.e. problems concern-ing executing debts from contractors, it will not have ready cash. In order to obtain a reliable picture reflecting the real state of a company’s operat-ing financial means, there is a statement of financial flows to be prepared. It embraces three aspects of economic activity: operating, investment and financial ones.

Statement of cash flow shows how and which factors influenced the company’s own capital in a given circulating year. It shows particular factors accumulating capital, i.e. a partial retention of a yielded profit, and those reducing their level, i.e. dividend for the owners of a company.

Additional information consists of detailed information explaining and supplementing previous reports. It shows i.e. information on purchased elements of estate used in a policy of financial remuneration, value of amortisation, events relevant to a company and other key aspects to company’s functioning

Indicated documents account for a basic analytic set of information used for valuation of a company, not only by its executives, but also by other interested entities such as banks, insurers, the treasury department or prospective investors.

Want to read more? See: Analiza finansowa w zarządzaniu współczesnym przedsiębiorstwem, pod. red. A. Walczaka, Difin, Warszawa 2007; M. Sierpińska, T. Jachna: Metody podejmowania decyzji finanso-wych. Analiza przykładów i przypadków, Wydawnictwo Naukowe PWN, Warszawa 2007.

FIXED ASSETS

Buildings and structures

Buildings and structures are usually an essential component of business assets. For the most part they are a business’s major (most valuable) items in the balance sheet.

A building is an object that is permanently associated with the land, separated from the space by partitions (walls) and has foundations and a roof. In addition, there are distinguished construction works intended

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for temporary use for a period shorter than its technical life, provided for transfer to another location or demolition and other construction works, such as shooting galleries, street kiosks, pavilions and exhibitions for street sales, tent and pneumatic shell, entertainment equipment, caravans, and container objects. Therefore, the objects of this kind do not constitute a separate category, but only that they are all buildings of a certain trait.

Structure is any object other than a building or landscaping (arbor, cell), such as airports, roads, railways, bridges, viaducts, overpasses, tun-nels, technical networks, antenna masts, billboard and permanently con-nected with land advertising equipment, sewage treatment plants, landfills, water treatment plants, ground and underground pedestrian crossings, public utilities, sports buildings, cemeteries, monuments and other build-ings that are not a building.

Pursuant to Art. Two. A law on local taxes and charges, called the pro-perty tax concerns real estate or construction works:

• Land.• Buildings or their sections.• Structures or their parts involved in running a business.

Land

Land is one of the types of property. It is an isolated fragment of the earth’s surface, which is the subject of separate ownership. To qualify a given surface as a separate item of property, it must have defined limits, and established in a perpetual book. In accordance with the provisions of the Civil Code, there are two types of land:

• Agricultural, used to carry out manufacturing activities in the field of animal and plant production (agricultural production).

• Non-agricultural.Land, as opposed to buildings and structures are not subjected to depre-

ciation.

Transport

The means of transport in a company are recognised as all types of machinery or transport creatures that allow for the transport of cargo or people. These can be:

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• Means of land transport: motor vehicles, rail, and motorcycles.• Water transport.• Means of air transport.• Means of internal transport (lifting and transport equipment).• Lifting equipment (cranes).• Transport equipment: forklifts and conveyors.They are an essential component of a business’s assets, especially when

they deal with transport, or activities based largely on the transport of goods or manufactured products. In such cases, when a company has a high demand for means of transport and must replace them relatively fre-quently, it often uses a lease or investment loan for financing them.

Innovation and innovation management

Innovation is an economic use of a new idea which occurred to be a success after it was launched. In the sense it is a tangible improvement to amend the original condition of the products, and in functional terms, the process of development, design, implementation, adaptation and use of new solutions. As a result of the activities mentioned above, the balance on the market is tormented and it creates new demand and supply. In the period of innovation, the producer has a monopoly for some time, with its end linked to the introduction of a new product or an imitation by the use of modern technologies by other companies.

Innovation management is a set of techniques, the purpose of which is to motivate and inspire employees to think creatively, and lead them to the final result, which is the creation of innovation. The activities of innovation management are, most importantly: the creation, collection and identification of knowledge; and therefore, has created for this purpose a specially designed computer systems. Their main feature is a database of solutions developed problems, the results of experiments, research and experimentation. An important role is played by the software, which supports creative thinking.

The proper management of innovation is essential for the proper func-tioning of the company and of its achieving a competitive advantage. Often, companies that strive to stay in business or are thinking about further developments, need to take action, including a policy innovation.

Want to read more? See: A. Pomykalski, Innowacje, Wydawnictwo Politechniki Łódzkiej, Łódź.

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Know-how

Know-how is the knowledge of the field; the overall knowledge and experience in the field of technology acquired through long-term practice. This is the ability of the practical use of knowledge and problem-solving. In a market economy, those companies that have the know-how at a high level gain competitive advantage because they know how to do things much faster and are better at implementing new ideas. This may be a method to reduce the production costs of the goods, worked out by a system of quality standards of customer service, a long-term strategy for public relations, a contacts database for representatives of customers, the original data backup system or order management.

Know-how is the subject of economic turnover. The know-how agree-ment entitles an entity to certain subject rights. Within its framework, one party commits itself to provide another with technical or organisational knowledge of confidential information, directly usable in the business. Characteristic for this type of contract is the intangibility of the assets which are involved.

Know-how agreements are unnamed because their rules are not speci-fied in the Civil Code. However, there is an imposed duty of confidentiality on the customer. This kind of relationship is not protected in the same way as a patent. In the case of the use of confidential information, the victim may ask the court to initiate proceedings and citing unfair competition.

Want to read more? See: A. Hernas, Systemy zarządzania jakością, Wydawnictwo Politechniki Śląskiej, Gliwice.

Protection of intellectual property

Intellectual property and intangible assets is a good theme occurring in the course of civil law, without material form. It represents the result of artistic, scientific and inventive, and therefore they include software. Intel-lectual property is protected by legislation. By law, protection of intellec-tual property, i.e. “intangible goods” are covered by the concept of intel-lectual goods from the moment of their creation, without the necessity of their registration. On the basis of international agreements, protection is in power in most countries of the world. However, the protection of indus-trial property in Poland is provided for after delivering an application to

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the Patent Office and the Patent Office’s decision on the patent, proprietary rights or rights of registration.

The most commonly used and simplest form of protection of intangible goods is to keep them secret. From the standpoint of the copyright owner, this is the best information about the subject of protection. However, in the case of software, such protection becomes impossible, because the very nature of the produced software is intended for use by the general public, which naturally has access to this subject of intellectual property protec-tion.

Want to read more? See: G. Michniewicz, Ochrona własności intelektualnej, Wydawnictwo C.H. Beck.

Investment and its funding

The primary objective of the company is its continuing development and increase in value. Therefore, the company should operate in such a way as to continuously generate and accumulate (collect, save) the profits and surplus cash. To accomplish this, the company must first raise money and then invest it in things such as machinery, equipment, real estate, vehic-les, and intangible assets (e.g., licences, franchises, utility models) and the means of production. This kind of conduct is called investment. Therefore, investment of this kind or financial outlays, which are aimed at creating new assets or the improvement of existing ones, as well as spending on so--called initial investments.

Investments are classified into:• Financial, i.e., the purchase of shares, bonds, bills, certificates,

options, etc.• Property, namely the creation of productive assets, its modernisa-

tion, improvement, expansion.• Others, which include, inter alia, expenditure on research - develop-

ment, promotion, advertising, training, personnel, etc.The demand for investment is particularly high in newly established

companies, which are developing very dynamically. Also, in more develo-ped companies which have already attained the desired size, their property needs for investment expenditure are not declining. These is the result of continuous technological progress, increased competition and increasin-

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gly open markets (by increasing competition from foreign companies.) Therefore, regardless of the size, investment is a continuous process. The operator aiming at achieving market success has to develop machinery on a regular basis, modernise production and introduce higher standards of work. So the company that would like to grow and is to increase its value, or at least maintain its current position on the market, must regularly commit expenditure on investment.

Sources of investment financing projects may be different. They are dependent on the size of the company, its stage of development, credit capacity, size, capital requirements and the duration of the investment and how to finance it.

The main sources of investment financing include:• Own resources.• Bank credits.• Leasing.• Issuing bonds.• Issuing shares.• Venture Capital, Business Angel.• Hybrid financing.• EU funds.Choosing the right type of funding is dependent on the amount of

capital which the company wants to acquire, the cost of acquisition, how to repay the debt incurred, based primarily on the creditworthiness and financial condition.

Want to read more? See: K. Jajuga, T. Jajuga, Inwestycje, Wydawnictwo Naukowe PWN, Warszawa 2006.

Quality Management System

Quality management can be assumed to maintain the standard of per-formance of processes or control of manufactured items. Quality manage-ment could also be based on continuous quality improvement throughout the organisation, the activities of which are linked to the system.

Quality management system includes the top, middle and lower levels of management. At the highest level there are strategic goals of initiating and then supporting a global quality management system. The tasks of the

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lower levels are to introduce this system, and by monitoring it, and quality control.

Quality control is taking actions aimed at testing the product characte-ristics in terms of the requirements of the consumer. Actions taken under it are to determine whether the characteristics of the product (in part, object, service, process, and object) are in accordance with the requirements that are specified in the relevant document.

The effectiveness of quality control is to effectively identify quality pro-blems arising at each stage of production in each cell of the organisation.

Want to read more? See: A. Hernas, Systemy zarządzania jakością, Wydawnictwo Politechniki Śląskiej, Gliwice.

Depreciation

Depreciation is the monetary equivalent consumption (physical and moral) of fixed assets. This involves the regular diminishing value of the intangible assets of a company by the equivalent of its use in a given period of depreciation. This loss of value is counted in the cost of business, yet it is part of the price of the product or service. For example: A company that buys a new car cannot be counted against a single operating costs (the cost of each year) the whole of its value, because the car will be used for many years. In this case, the cost of one year in accordance with the provisions can only count as part of the value of the car (20%), and the remaining value accounted for in subsequent years. In this situation, is counted as part of the cost of a given year is defined as depreciation.

Depreciation has two major functions:• Remittance, which specifies how to adjust the initial value of an

asset due to wear and tear.• Costs, i.e. defines the cost of consumption of a specific element of

the business’s assets.The amortised value of the asset is reduced by depreciation or amorti-

sation. They are performed by a systematic accounting of its value over the amortisation period. The value of depreciation depends on the rate of wear and tear of the asset. Different assets are used up in at very different rates, e.g. cars, have a much shorter life than buildings. Therefore, in determining the amortisation period and the annual depreciation rate, the useful life of

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the asset has to be assertained. To determine the length of this period, they are influenced in particular by:

• The number of changes which operate the assets.• The pace of techno-economic progress.• The performance of the asset in terms of the number of working

hours or the number of manufactured products.• Legal or other restrictions on the frequency of use of the asset.In most cases, the company should use an established standard, accor-

ding to the legislature’s list of depreciation rates, but in some cases it may determine the rate individually. There are several methods of calculating depreciation. However, in practice, in Poland, the most commonly used method is the linear one, which writes off the same amount of costs over the lifetime of the asset.

LEGAL ISSUES

Agreements and contracts

The concepts of an agreement and a contract often are used interchan-geably (synonymously). But the law differentiates between them. An agre-ement is a legal concept and is a consistent declaration of intention, between at least two parties, which seek to induce in the body of legal consequences. The contracting parties agree to its content, the subject of the contract, the manner of its implementation and the mutual rights and obligations (e.g. one of the parties wants to have an upgrade performed on other computer game in the specified time, in return for remuneration, the latter underta-kes to perform the upgrade, and if this was not done correctly, would have to pay a penalty). Whereas the term contract is widely used in business and refers to an agreement or agreements on an isolated group of the project, concluded in writing between the contracting parties. Contracts are one of the main instruments for the exchange of goods and services and credit relations.

One of the guiding principles in force in most countries with a free market economy is the principle of freedom of contract. This means that traders are free to decide on the choice of contractors with whom to have

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a contract, or the formulation of its terms and content. It is in the interest of the parties to the agreement that it is fair and complies with their condi-tions. It does not require only the institution of the penalty, it but primarily reflects the trustworthiness of a contractor in building a good image and its beneficial influence on the development of trade relations. In order to secure the proper performance of the obligations of counterparties, penal-ties can be applied. The reservations in the contract about the penalties for the improper fulfillment of obligations make it much easier later to assert their rights. As a result of improper performance of the contract, one party has to bear the determined loss or damages. In addition, a penalty is more often demanded as well, in the situation when the contractor withdraws from the contract.

Want to read more? See: Z. Radwański, Prawo cywilne – część ogólna, wyd. C.H. Beck Warszawa.

Tenders

A tender, next to negotiation and offer acceptance, is one of the three forms of the contractual freedom principal. The tender procedures are regulated by law and consist of:

• Invitation to tender.• Agreement for the proposal.• Signing a contract.The announcement of the tender is the first stage of the tendering pro-

cedure. It should at least include the subject, time, place and conditions of the tender. Most relevant here is the precise conditions or specific assump-tions about the rules, terms and amount of payment of the deposit, and the date of return to operators who fail to win the award. One of the main conditions for joining the auction is usually a down payment. It protects the conclusion of an agreement between those asking for tenders and the organising entity that wins the tender. The deposit is also a barrier to provi-ding more economic credibility of the bids. The deposit is a sum of money, determined as an amount of or a percentage of the asking price or value of the contract. The deposit may also consist of securities, bearer bonds or specific items to the value of the assets. Moreover, in the tender, there is often a notice which stipulates that it can be closed without selecting any offer or may be revoked without giving a specific reason. The reservations

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of this type of auction allow the protection of the organiser against liability for any damage caused by denial of the contract with the winner of the tender.

The Civil Code provides for two main forms of tender: oral and written.An oral tender, also called an auction, is obtained by bidding the high-

est price. The agreement is concluding when the most advantageous tender has been chosen. The choice is usually made at the moment of outbidding all others, by adjudication (to accept the best bid, when other participants do not report better offers, despite whatever the auctioneer calls.). Other deals made during the tender shall cease to be binding when the advan-tageous tender has been submitted, or the tender will be closed without selecting any of the offers, unless stated otherwise in the conditions of the tender. In the oral auction the only criterion is usually is the price.

A written tender is carried out by means of submission, and the opening, review and selecting of the most advantageous written offer. With a written tender, the best deals often depend on conditions other than the price. The sequence of applications has no effect on the choice of the offer. The adoption of one of the submitted bids depends on the organiser of the tender or the person indicated by him or her (the committee). An offers made in the course of a written invitation expire with the choice of another offer, or the closing of the auction without a winner.

Tenders can also be divided into:• Unlimited, which may be joined by any entity having the legal capa-

city to exercise civil - legal actions.• Limited, to accede to it the tenderer must comply with additional

conditions.• Closed, where the tender notice is directed to specific entities.Among the various forms of tender, the mandatory tender can also be

distinguished , where a legal provision imposes an obligation to carry it out (this applies in particular to the provisions of the Law on Public Procure-ment), and optional ones, when a tender is of a personal interest to an organising entity.

Want to read more? See: Z. Radwański, Prawo cywilne – część ogólna, wyd. C.H. Beck Warszawa.

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Taxes

Taxes are the classical form of public tribute (a tribute – non-refundable payment) in cash collected by public law, such as the state and local governments. Basic characteristics of taxes are:

• Sidedness, i.e., they are unilaterally established by a decision establi-shing the entity taxes.

• Generality, which means that the rules for determining and collec-ting the taxes shall apply to any entity that meets certain conditions.

• Principality, which means that the primary purpose of the tax is to provide state or local government funds to enable activities and tasks.

• Non-refundable, i.e., the tax levied under the law shall not be refun-dable. Thus, the tax becomes a kind of public tribute to the state or local government.

• Free of charge, which should be understood that, paying tax entity receives nothing from the state or local government, under any con-sideration, whether in the form of an official act or service, as is the collection of fees.

• Constraint, which means that when required to pay the tax, some-body does not pay it voluntarily, so the authority of the State may get benefit in a forced way or through administrative enforcement. In extreme cases, a taxpayer not paying taxes carries a penalty of imprisonment.

These tax features distinguish them from other state revenue or other public entity, and are called permanent elements of the tax.

Taxes shall perform the functions of both fiscal (tax is an essential tool for takeover by the state revenue and meets the demand for money), and economics (the effect of taxation is to change the situation for income and property taxpayers, which influences their behaviour, business decisions, consumption decisions, etc.)

The implementation of the functions performed by the taxes requires practical activity, expressed in determining tax liability, tax assessment, along with downloading, etc. In theory and in practice, all these activities are referred to as the art of taxation. It includes elements such as:

• Taxable entity - Any person who has the duty of paying tax. Active entities are primarily state and local governments that collect the

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tax. However, passive entity are legal and natural persons required to pay tax.

• The object of taxation - the thing or event that causes the formation of tax liability.

• Taxable amount - this is usually the value of the tax base but it can happen that the tax base is expressed in physical units (e.g. a tax on dogs).

• Tax rate - the ratio of tax to the value of the tax base. Tax rates are available in several forms:• The rates, which determine what proportion of the tax base is

the tax liability (e.g. VAT).• Quota rates, which determine the amount of tax due directly

to the public authorities (e.g. a tax on dogs).• Fractional rates.• Multiple rates, where the amount is a multiple of the base (e.g.

an extraordinary tax on wage growth.)• Tax Scale - tells you what rate should be applied to the tax base.• Tax exemptions - is related to the fact that the State, under its

own policy, may exclude a certain group of taxpayers or a por-tion of the tax base from the obligation to pay the tax.

• Tax reductions - a reduction in the size of the tax that must be paid during or after its calculation.

• Mode and terms of payment - when and how the authority will collect the taxes.

Taxes, because of their diversity have many classifications. The basic cri-terion is the source of the tax, according to which taxes are divided into:

1. Taxes on property and taxes on property rights.2. Taxes on income, which are paid in connection with a business and

the achieved revenues of this title. These taxes are levied by the State regardless of the outcome of any economic activity.

3. Taxes on income on which income tax is based, mostly labour income and income from business. Taxes on income refer directly to the economic surplus earned by the operators.

4. Taxes on expenditure, which are typical taxes on consumption.Taxes can also be divided because of which public body will receive

them. Therefore, the taxes are divided into:

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1) State Taxes:• Taxes on goods and services.• Excise duty.• Gambling tax.• Income tax on individuals.• Income tax law.

2) Local Taxes:• agricultural tax.• forest tax.• Taxes on inheritance and gifts.• Tax on civil law transactions.• So-called taxes at a local level (e.g. real estate, means of transport,

the possession of dogs, etc.).Want to read more about taxes in Poland? See: the webpage of the

Ministry of Finances [webpage: http://www.mf.gov.pl/].

This project has been funded with the support from the European Commission (agreement no 2013-1-PL1-LEO05-37816).

This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be

made of the information contained therein.

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