Herzberg’s theory distinguishes between hygiene factors (like salary, work conditions, and company policies) and motivators (like achievement, recognition, the work itself, responsibility, and growth). The scenario describes a lack of motivation and fulfillment, not dissatisfaction with basic conditions. Therefore, actions that enhance motivators—like increasing autonomy, responsibility, and recognition—are the most direct and effective solution for improving morale and engagement.

The core activity described is estimating future costs and allocating resources for a specific project (the marketing campaign). This is the essence of budgeting, which is a quantitative plan for acquiring and using financial resources over a specified time period. While related to strategic planning, the act of listing activities and estimating their costs is the operational task of budget development.

Net profit margin is calculated as Net Income / Revenue. If the cost to produce goods (COGS) is rising faster than the revenue from selling them, the gross profit (Revenue – COGS) is being squeezed. This directly pressures the bottom-line net income, causing the net profit margin (the percentage of revenue left as profit) to decrease, assuming other expenses remain constant.

Negotiation is a process of discovery and value creation. Immediately accepting a first offer suggests you might have agreed to even better terms, potentially leaving value unclaimed. Conversely, a flat rejection can damage the relationship and end the discussion before exploring mutually beneficial alternatives. The strategic approach is to treat the first offer as an opening position and use it to probe interests and begin a dialogue aimed at finding an optimal agreement.

In the BCG Matrix, a product with high market share in a low-growth market is a ‘Cash Cow.’ These units generate substantial cash flows due to their established position but have limited growth potential. The classic strategic prescription is to ‘harvest’ or ‘milk’ the cash cow—limiting new investment and using the generated cash to fund ‘Stars’ (high-growth, high-share products) or ‘Question Marks’ (high-growth, low-share products).

The grapevine is the organization’s informal communication network. It is unstructured, meaning it does not follow official hierarchical pathways, and it operates through social relationships. While it can sometimes spread rumors, it is often surprisingly fast and accurate, serving as a natural part of organizational life that fulfills social and information needs not met by formal channels.

SWOT analysis examines internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats). A new government regulation is an external factor imposed by the environment outside the company’s direct control. As it is restrictive, it poses a potential risk or challenge to the company’s operations, performance, or strategy, making it a clear Threat.

Expectancy theory states motivation is a function of expectancy (belief that effort leads to performance), instrumentality (belief that performance leads to reward), and valence (value of the reward). A new salesperson may have low expectancy (doubting their ability to achieve high sales) and thus low instrumentality for a commission-heavy plan. Plan B, with its higher guaranteed base, reduces the risk and provides security (a valued reward), which is more likely to sustain motivation during the learning phase.

The indirect method starts with net income and adjusts for non-cash items and changes in working capital. A decrease in Inventory means the company sold more goods than it produced/purchased, which frees up cash (cash was not spent to increase inventory). Therefore, it is added back to net income to arrive at cash from operations. An increase in Accounts Receivable (cash not yet collected) would be subtracted. Equipment purchase is an investing activity, and dividend payment is a financing activity.

Herzberg’s theory distinguishes between hygiene factors (like salary, work conditions, and company policies) and motivators (like achievement, recognition, the work itself, responsibility, and growth). The scenario describes a lack of motivation and fulfillment, not dissatisfaction with basic conditions. Therefore, actions that enhance motivators—like increasing autonomy, responsibility, and recognition—are the most direct and effective solution for improving morale and engagement.0