Business terms Flashcards
1
Q
What is a business?
A
An organization that produces or sells goods or services to make a profit
2
Q
What is profit?
A
What remains after a business expenses have been subtracted from its revenues
3
Q
What is a non profit organization?
A
Organizations that used funds they generate from government grants or from the sale of goods or services to provide services to the public
4
Q
What is an economic system?
A
The way in which a nation allocates its resources among its citizens
5
Q
What is factors of production?
A
The resources used to produce goods and services, labour, capital, and natural resources
6
Q
What is capital?
A
It is the funds required to start a business and to keep it from operating and growing
7
Q
What are the 3 types of economic systems?
A
Command economy and market economy
8
Q
What is a command economy?
A
Government controls all/most factors of production to make all/most production and allocation decisions
9
Q
What is a market economy?
A
Individuals control most factors of production and make all/most production decisions
10
Q
What is a market?
A
A mechanism for exchange between the buyers and sellers of a good or service
11
Q
What is a mixed market economy?
A
Where elements of both a command and market economy are present
12
Q
What is a input market?
A
When firms buy the resources they need in the production of goods and services
13
Q
What is an output market?
A
When firms supply goods and services in response to demand on the part of the consumers
14
Q
What is capitalism?
A
An economic system in which markets decide what, when, and who to produce
15
Q
What is privatization?
A
The transfer of activities from the government to the private sector
16
Q
What is deregulation?
A
Reduction in the number of laws affecting business activity
17
Q
Why do governments promote competition?
A
It is crucial to the market economy
Without restrictions, large companies with vast resources could cut its prices and drive smaller firms out of the market
18
Q
What is revenue taxes?
A
Government provides revenue to fund various services and programs
19
Q
What is the external environment
A
It is everything outside a organization/business that might affect them
20
Q
What is aggregate output?
A
A way to tell if an economic system is growing. It is the total quantity of goods and services produced by an economic system
21
Q
What are the 4 phases of the business cycle
A
Peaks
Recession
Trough
Recovery
22
Q
What is GDP
A
The total value of goods and services
23
Q
What is the formula for GDP per capita
A
Dividing GDP by total population of a country
24
Q
What is the balance of trade
A
The economic value of all the products that a country exports minus the economic value of its imported products
25
What is national debt
The amount of money the government owns its creditors
26
How is inflation measured?
CPI measures the typical products purchased by consumers living in urban areas
27
What is frictional unemployment?
people are out of work temporarily while looking for a new job
28
What is Seasonal unemployment
people are out of work because of the seasonal nature of their jobs
29
What is Cyclical unemployment
people are out of work because of a downturn in the business cycle
30
What is structural unemployment
people are unemployed because they lack the skills needed to perform available jobs
31
What is Fiscal Policies
the collection and spending of government revenues
32
What is a horizontal merge
When companies in the same industry merge
33
What is a vertical merge
When one of the companies in the merger is a supplier or customer to the other,
34
What is a friendly takeover
the acquired company welcomes the acquisition, perhaps because it needs cash or sees other benefits in joining the acquiring firm
35
What is a hostile takeover
the acquiring company buys enough of the other company’s stock to take control, even though the other company is opposed to the takeove
36
What is an option that companies can use to fight off a takeover?
By using a poison pill
37
What is a divestiture
when a company decides to sell part of its existing business operations to another corporation
38
What is a spinoff
when a company might set up one or more corporate units as a new, independent company because a business unit might be more valuable as a separate company
39
What are some reasons a strategic alliance could occur
To help spread the risk of a project across both companies
To get something of value from their partner (whether that be technological or financial)
40
What are business ethics
refers to the ethical or unethical behaviors by a business’s managers or employees.
41
What are managerial ethics
standards of behavior that guide individual managers in their work
42
What is conflict of interest
when activity benefits an employee at the expense of the employer.
43
What are the 3 steps needed to judge if a behaviour is ethical or unethical
Gather the relevant factual information
Determine the most appropriate moral values
Make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.
44
What is managerial capitalism
states that a company's only responsibility is to make as much money as possible for shareholders as long as laws are not broken
45
What are organizational stakeholders
individuals and groups that are directly affected by the practices of an organization and therefore have a stake in its performance
46
What is the social return investment of stakeholders?
used for helping companies understand manage and communicate their social value for their stakeholders
47
What are the consumer rights?
-The right to safe products
-The right to be informed about all relevant aspects of a product
-The right to be heard
-The right to choose what they buy
-The right to be educated about purchases
-The right to courteous service
48
What is collusion?
When companies make something more expensive than it is
49
What are whistleblowers?
employees that speak out against the unethical, illegal, or socially irresponsible practices that their company has performing
50
What is insider trading
Using confidential information to gain from the purchase or sale of stock
51
What are the 4 stances to social responsibility?
Obstructionist stance
Defensive stance
Accommodative stance
Proactive stance
52
What is an obstructionist stance?
Business do as little as possible to to solve social or environmental problems
53
What is a defensive stance?
when businesses do everything required of them legally but nothing more
54
What is an accommodative stance?
When businesses that meet the legal and ethical requirements but go further beyond if asked
55
What is a social audit
A systematic analysis of how a firm is using their funds earmarked for social responsibility goals and how effective these expenditures have been
56
What is a proactive stance?
When businesses and companies that go out of their way to make a positive impact on their communities
57
What are the 3 ways to start a small business?
Buying an Existing business
Start one from scratch
Buy a franchise
58
What is a franchising agreement?
Outlines the duties and responsibilities of each party
59
What is a sole proprietorship?
A business owned and operated by one person
60
What are the advantages of a sole proprietorship?
Simplified legal system
Profit losses are deducted from the income of the proprietorship which are the earned from personal sources, rather from the business
61
What is a general partnership?
A partner actively involved in managing the firm and have unlimited liability
62
What is a corporation?
A business that is a separate legal entity, responsible for its own debts. Owners are liable for the amount they invested into the business
62
What are shareholders?
Investors that buy shares of ownership in the form of stocks
62
Who are the real owners of a business?
Shareholders
63
What is the board of director?
the governing body of a corporation
64
What are the main responsibilities of the board of directors
to ensure the corporation runs in the best interest of the shareholders
65
What are inside directors and what are their responsibilities?
Employees of the company and have primary responsibility for the corporation
Usually are the top managers, presidents and executive vice presidents
66
What is a cooperative?
A business run by the people who use it, and they share profits based on how much they use it, not how much money they invested into it
67
What is a disadvantage of a cooperative
Benefits members receive from the cooperative depend on how much they use the cooperatives service, so members do not have a strong reason to invest money into the corporation
67
What is globalization?
The process in which the world economy is becoming a single interdependent system
68
What are imports?
Products or goods that are grown aboard but sold domestically
69
What are exports?
Products or goods that are made domestically but shipped aboard
70
What are some barriers to international trade?
Social and cultural differences, economic differences, legal and political differences
70
What is a quota?
Restrictions imposed by one nation on the total number of products that can be
71
What is embargo?
A government order forbidding exportation or importation of a particular product
72
What is a tariff?
What is a tariff?
72
What does tariff do?
Directly affects prices of products, raising the price of import to consumers
Raise money for the government
Increase government revenue
73
What is a subsidy?
A government payment given to domestic businesses to help it compete with existing firms
74
What is protectionism?
Protecting domestic businesses at the expense of free market competition
75
What are local content laws?
Laws that require products that are sold in a country to be made partly in their country
76
What are business practice laws?
Laws or regulations governing business practices in given countries
77
What is a cartel?
An association of producers whose purpose is to control supply practices in given countries
78
What does dumping mean?
Selling a product for less abroad than in the producing nation
79
What does efficiency mean?
achieving the greatest level of output with a given amount of input
80
What are the 5 steps to planning?
Goals are established for the organization
Managers identify if a gap exists between the companies desired position and where they actually are
Managers develop plans to achieve the desired objective
Plans are implemented
The effectiveness of the plan is assessed
81
What are the types of managers?
Top managers, middle managers, first line managers
82
What are the duties of a top manager?
Responsible to the board of directors and shareholders of the firms performance and effectiveness
Set general policies, formulate strategies, oversee significant decisions, and represent the company in its dealings with other business and government
83
What are the duties of a middle manager?
Responsible for implementing strategies, policies, and decisions made by top managers
84
What are the duties of a first line manager
Responsible for supervising the work of employees who report to them
Ensure employees understand and are properly trained in company policies and procedures
85
What are the roles of a human resource manager?
Hire, train, evaluate performances decide how they should be compensated, and work with labor unions
86
What are the duties of a operations manager?
Responsible for a companies system for creating goods and services
Responsible for production, inventory, and quality control
87
What are the roles of a information manager?
Responsible for designing and implementing various systems to gather, process, and disseminate information.
88
What are the duties of a marketing manager?
Responsible for getting products and services to buyers
89
What are the duties of a financial manager?
Plans and oversees financial resources
90
What does it mean by conceptual skills?
Refers to a person's ability to think in the abstract, diagnose and analyze situations and see beyond the present situation
91
What does organizational politics mean
Refers to the actions that people take as they try to get what they want
92
What does escalation of commitment mean?
When manager makes a poor decision but still is committed in following through with that decision
93
What does strategic management mean
Process of effectively aligning an organization with its external environment
94
What are the 4 main purpose of goal setting?
Goal setting provides direction, guidance, and motivation for all managers
Goal setting helps firms allocate resources
Goal setting helps define corporate culture
Goal setting helps managers assess performance
95
What is a vision statement
a statement indicating why an organization exists and what kind of organization it wants to be
96
What is a mission statement?
A statement of how the organization will achieves its purpose
97
Who sets strategic plans?
Top managers
98
What are business level strategies?
Identifies the ways a business will compete in its chosen line of products or services.
99
What are functional strategies?
Identify the basic course of actions each department purses so it contributes to the business overall goals
100
What is a corporate level strategy?
Identifies the various businesses a company will be in and how the business will relate to each other
101
What are some examples of growth strategies?
Market penetration, geographic expansion, product development,
102
What is market penetration?
boosting sales of present products more by more aggressive selling in the firm's current market
103
What is a geographic expansion?
When companies expand operations into new geographic areas
104
What is product development?
When companies develop improved products for current markets
105
What does conglomerate diversification mean
Diversifying into products or markets that are no longer related to the firms business
106
What does related diversification mean
Means adding new but related products or services to an existing business
107
What are the 3 competitive strategies?
Cost leader, differentiation strategy, focus strategy
108
What does cost leadership mean?
Becoming a low cost leader in an industry
109
What does a differentiation strategy mean?
Being unique in its industry along with some dimensions valued by buyers
110
What does focus strategy mean?
Selecting a market segment and serving the customers in that segment better than competitors
111
What is a functional strategy
A basic course of action that each department follows to accomplish the business overall goals
112
What is the market plan?
Identifies the marketing objectives stating what marketing will accomplish in the future
113
What is a competitive strategy?
A plan to establish a profitable and sustainable competitive position
114
What are marketing objectives?
Goals that the marketing plan intends to accomplish
115
What are marketing strategies?
Identify the planned marketing programs
116
What are the 4 P's of the marketing mix?
Product
Pricing
Place
Promotion
117
What is a product?
A good or service that fulfills a customers needs or wants
118
What does product differentiation mean?
Making a product that will stand out from others
119
What are marketing managers responsible for?
planning, organizing, leading and controlling the organizations marketing resources towards the organizations mission
120
What does market segmentation mean
refers to dividing a market into categories of customer types or "segments
121
What does product positioning mean
process of fixing, adapting and communicating the nature of the product itself
122
What are the market segments?
Demographic, geographic, geo-demographic, psychographic, behavioural
123
What is a demographic segmentation?
describe the characteristics of populations that may be considered in developing a segmentation strategy such as.... age, income, gender, race, religion, social class
124
What is a geographic segmentation
Geographic variables are the geographical units that may be considered in developing a segmentation strategy such as.... weather, location,
125
What is a psychographic segmentation
consumer characteristics that may be considered in developing a segmentation strategy such as... lifestyle, opinions, interests, attitudes
126
What are behavioural segmentation?
dividing a market into groups based on consumer knowledge, use, or response to a product...
127
What are some variables of behavioural segmentation?
Benefits sought
User status
Usage rate
Loyalty status
Occasion for use
128
What is a market research?
The study of customers wants and needs, and how to best meet those needs and wants
129
What is consumer behaviour?
The study of the decision process by which people buy and consume products
130
What are the 4 major influences on consumer behaviour?
Psychological influences
Personal influences
Social influences
Cultural influences
131
What are the 5 key stages when a consumer is buying a new product
Problem/need recognition
Information seeking
Evaluation of alternatives
Purchase decisions
Post purchase evaluation
132
What is a industrial market?
business that buy goods to be converted into other products or that are used up during production
133
What is a reseller market?
An organizational market consisting of intermediaries that buy and resell finished goods
134
