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Business Administration > Ch2 > Flashcards

Ch2 Flashcards

1
Q

What are the major elements of the external environment?

A

economic conditions, technology, political-legal considerations, social issues, global environment, issues of ehtical and social responsibility, the business environment, and emerging challenges/opportunities

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2
Q

aggregate output

A

total quantity of goods and services produced by an economic system over a given period

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3
Q

standard of living

A

total quality and quantity of goods and services that a country’s citizens can purchase with the currency used in their economic system

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4
Q

business cycle

A

pattern of short-term ups and downs (expansions and contractions) in an economy

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5
Q

What are the four phases of a business cycle?

A

peak, recession, trough, and recovery

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6
Q

recession

A

usually two consecutive quarters when the economy shrinks

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7
Q

depression

A

when the trough extends two or more years

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8
Q

gross domestic product (GDP)

A

total value of all goods and services produced within a given period by a national economy through domestic factors of production

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9
Q

gross national product (GNP)

A

total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located

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10
Q

Genuine Progress Indicator (GPI)

A

a more realistic measure that treats activities that harm the environment or our quality of life as costs and gives them negative values

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11
Q

GDP per capita

A

GDP per person

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12
Q

real GDP

A

GDP calculated to account for changes in currency vlalues and price changes

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13
Q

nominal GDP

A

GDP measured in current dollars or with all components valued at current prices

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14
Q

purchasing power parity

A

principle that exchange rate are set so similar products in different countries are about the same

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15
Q

productivity

A

measure of economic growth that compares how much a system produces with the resources needed to produce it

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16
Q

balance of trade

A

total of a country’s exports minus its imports

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17
Q

national debt

A

total amount of money that a country owes its creditors

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18
Q

budget deficits

A

result of government spending more in one year than it takes during that year

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19
Q

stability

A

condition in an economic system in which the amount of money available and the quantity of goods and services produced are growing at about the same rate

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20
Q

Most countries have inflation rates between ___ and ___ percent

A

2, 15

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21
Q

consumer price index (CPI)

A

measure of the prices of typical products purchased by consumers living in urban areas

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22
Q

deflation

A

a period of generally falling prices

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23
Q

What are the main types of unemployment?

A

frictional (temporary while looking for a new job)
seasonal (their jobs are seasonal)
cyclical (downturn in the business cycle)
structural (they lack skills)

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24
Q

fiscal policies

A

policies whereby governments collect and spend revenues

25
Q

monetary policies

A

policies where the government controls the size of the nation’s money supply

26
Q

cycle of unemployment

A

low unemployment = shortage of labour, businesses raise wages, produce less because reduced profit margins –> raise product prices = consumers buying less (businesses reduce work force and cycle starts again)

27
Q

Bank of Canada

A

essential for the government to influence the willingness of banks to lend money (crucial to Canada’s monetary policy)

28
Q

tight monetary policy

A

when Bank of Canada restricts the money supply and banks charge higher interest rates, which results in reducing spending by companies and consumers

29
Q

easy monetary policy

A

when Bank of Canada loosens money supply to increase spending

30
Q

technology

A

all the ways firms create value for their constituents

includes human knowledge, work methods, physical equipment, electronics, processing systems, etc

31
Q

research and development (R&D)

A

activities that are necessary to provide new products, services, and processes

32
Q

basic (or pure) R&D

A

improving knowledge in an area without a primary focus on whether any discoveries that might occur are immediately marketable

33
Q

applied R&D

A

focusing specifically on how a technological innovation can be used in the making of a product or service that can be sold in the marketplace

34
Q

technology transfer

A

the process of getting a new technology out of the lab and into the marketplace

35
Q

politlcal-legal environment

A

conditions affecting the relationship btwn business and government (usually regulations)

36
Q

socio-cultural environment

A

conditions including the customs, values, attitudes, and demographic characteristics of the society in which an organization functions

37
Q

What trends are evident now that businesses need to differentiate themselves more aggressively?

A

higher-quality products, planned obsolescence, and product life cycles

38
Q

What are the three most important issues facing Canadian businesses?

A

the value of the Canadian dollar, skilled labour shortage, and the environment

39
Q

What are the four components of industry rivalry, according to Michael Porter?

A

threat of new entrants, bargaining power of consumers, bargaining power of suppliers, and threat of substitutes

40
Q

core competencies

A

skills and resources with which an organization competes best and creates the most value for owners

41
Q

outsourcing

A

strategy or paying suppliers and distributors to perform certain business processes or to provide needed materials o services

42
Q

viral marketing

A

strategy of using the internet and word-of-mouth to spread product information

43
Q

process

A

any activity that adds value to some input, transforming it into an output for a customer (can be external or internal)

44
Q

business process management

A

approach by which firms move away from department-oriented organization and toward process-oriented team structures that cut across departmental boundaries

45
Q

acquisition

A

the purchase of a company by another, which absorbs the smaller company into its operations

46
Q

merger

A

the union of two companies to form a single new business (more collaborative than acquisition)

47
Q

horizontal merger

A

a merger of two firms that have previously been competitors in the same industry

48
Q

vertical merger

A

a merger of two firms that have previously had a buyer-seller relationship

49
Q

conglomerate merger

A

a merger of two firms in unrelated businesses

50
Q

friendly takeover

A

acquisition in which management of the acquired company welcomes the firm’s buyout by another company

51
Q

hostile takeover

A

acquisition in which management of the acquired company fights the firm’s buyout by another company

52
Q

poison pill

A

a defence that management adopts to make a firm less attractive to an actual or potential hostile suitorin a takeover attempt

53
Q

divestiture

A

occurs when a company sells part of its existing business operations to another company

54
Q

spinoff

A

strategy of setting up one or more corporate units as new, independent corporations

55
Q

employee stock ownership plans

A

an arrangement where a corporation buys its own stock with loaned funds and holds it in trust for its employees. Employees earn the stock based on some condition, such as seniority. Employees control the stock’s voting rights immediately, even though they may not physically own the stock until conditions are met

56
Q

strategic alliance

A

an enterprise in which two or more persons or companies temporarily join forces to undertake a particular project

57
Q

subsidiary corporation

A

one that is owned by another corporation

58
Q

parent corporation

A

a corporation that owns a subsidiary corporation

Business Administration (14 decks)

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