BUSINESS FINAL Flashcards
Definition of Mission
Purpose of being in business
Definition of Vision
What business aspires to be in future
Definition of GDP
Gross Domestic Product: Total value of goods and services in economy
Definition of Skin in the Game
Putting one’s own money in to start up business. Shows investors that the entrepreneur has something to lose if it doesn’t work out
Definition of Employee Empowerment
Power from higher ups is lent to lower levels to make decisions for themselves based on their training. Increases business autonomy in addition to customer AND employee satisfaction
Definition of Diversification
Investing in a bunch of different things so money doesn’t all fail at once if one method doesn’t work out
Definition of Business Cycle
Ups and down of economy (Expansion and Contraction)
Definition of Fiscal Policy
How much money government spends and taxes
Definition of Supply
Definition of Demand
Quantity of good/service based on specific price
How much people want a good/service based on specific price
Definition of CSR
Corporate Social Responsibility: Companies owe the community more than just jobs and economic value; outreach
Definition of Economies of Scale
The benefits companies gain from expanding (price per unit is cheaper, big down payments on things that will eventually bring down costs is more feasible, etc.)
Definition of Productivity
Doing more with less, efficiently using resources to get more done
Definition of Efficiency
Definition of Effectiveness
Efficiency: Doing things the right way; using the least amount of resources (time, energy) to get something done
Effectiveness: Ability to get something done
Percentage of business economy goods vs service
Services is bigger
Motivating
People are motivated differently; must find out what makes them tick to make them WANT to work and get things done
Average inflation
2.5% annually
Why do performance appraisals matter
Determines future promotions and pay raises
Cause of Great Recession
People were speculating houses and thought they were getting good deals on homes with low interest rates. But they were given adjustable rate mortgages and didn’t realize how bad it would get. When rates rose, people defaulted and banks stopped lending. Companies laid people off so consumers stopped spending and the economy went into freefall
Social Security payments
$2,000 monthly at 66 years old
Danger of job becoming obsolete
Structural unemployment. You need to have a set of skills that are going to be in demand in the coming years. Anything that can be covered by automation is in trouble
Funds to start a business
Capital
Primary Economic Systems and what most countries have
Capitalism
Communism
Socialism
Mixed economy
Balance of US government budget
Deficit of $1 trillion
Cummulative debt of US government
$28 trillion
China’s economy vs US
China will pass US by 2030
Federal Reserve’s mission
Price stability
Maximum sustainable employment
Why entrepreneurs start businesses
Make money
Have control over work life
Make a social impact
Characteristics of entrepreneurs
Motivation
Vision
Grit
US balance of trade
Imports > Exports
Why develop a business plan
It convinces investors to help in startup
Way to get capital
