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Intro to Business > Chapter1/2/3 > Flashcards

Chapter1/2/3 Flashcards

0
Q

Global business environment

A

International forces that affect a business

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1
Q

Domestic Business Environment:

A

Environment in which a firm conducts its operations and derives its revenues.

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2
Q

Technological business environment

A

All the ways by which firms create value for their constituents

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3
Q

Political-Legal Business Environment:

A

Relationship between business and govt.

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4
Q

Sociocultural business environment:

A

The customers,mores, values, and demographic characteristics of the society in which an organization functions.

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5
Q

Economic Business Environment

A

Relevant conditions that exist in the economic system in which a company operates.

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6
Q

List the Factors of production: (resources used in the production of goods and services)

A
  • Labor
  • capital
  • entrepreneurs
  • physical resources
  • information resources.
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7
Q

Types of economic systems:

A 
Planned Economy
Communism
Market Economy
Capitalism
Mixed Market
Socialism
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8
Q

Planned economy:

A

Economy that relies on a centralized government to control all/most factors of production and make all decisions.

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9
Q

Market economy:

A

Economy in which individuals control production and allocation decisions through supply and demand.

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10
Q

Communism:

A

Political system in which the govt owns and operates all factors of production.

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11
Q

Capitalism:

A

System that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive.

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12
Q

Mixed Market Economy:

A

Characteristics of both planned and market economies.

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13
Q

Privatization:

A

Process of converting govt. enterprises into privately owned companies.

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14
Q

Socialism:

A

Planned economic system in which the government owns and operates only in selected major sources of production.

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15
Q

Market Price (equilibrium)

A

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

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16
Q

Private enterprise:

A

Economic system that allows people to pursue their own interests without government restrictions

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17
Q

Perfect competition:

A

Market or industry characterized by numerous small firms producing an identical product.

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18
Q

Monopolistic competition:

A

Merely or industry characterized by numerous buyer and sellers trying to differentiate their products from those competitors.

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19
Q

Oligopoly:

A

Market or industry characterized by a handful of sellers with the power to influence the prices of their products.

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20
Q

Monopoly:

A

One producer who can set prices at will.

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21
Q

Natural Monopoly:

A

Industry in which one company can most efficiently supply all needed good or services.

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22
Q

Aggragate output:.

A

Total quantity of good/services produced by an economic system during a given period.

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23
Q

Standard of Living:

A

Total quantity and quality of goods/services people can purchase with the currency used in their economic system

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24
Q

Gross Domestic Product:

A

Total value of goods/services produced within that country. Domestic.

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25
Q

Gross National Product:

A

Total value of all goods/services produced in a country by regardless of where the factors of production are located.

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26
Q

GDP Per Capita:

A

GDP divided by total production.

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27
Q

Real GDP

A

GDP adjusted to account for changes in currency values and price changes.

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28
Q

Nominal GDP:

A

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

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29
Q

Purchasing Power Parity:

A

Principle that exchange rates are set that so the prices of similar products in different countries are about the same.

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30
Q

Consumer Price Index (CPI)

A

Measure of the prices of typical products purchased by consumers living in urban areas.,

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31
Q

Fiscal policies:

A

Policies used by government regarding how it collects and spends its revenue.

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32
Q

Monetary policies:

A

Policies used by a government to control the size of the money supply..

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33
Q

Stabilization policy

A

Government economic policy intended to smooth out fluctuations in output and unemployment to stabilize prices.

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34
Q

Managerial ethics:

A

Standards of behavior that guide individual managers in their work.

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35
Q

Four ethical norms:

A
  1. Utility: does a particular act optimize the benefits to those who are affected by it?
  2. Rights: does it respect the rights of all individuals involved?
  3. Justice: is it consistent with what’s fair?
  4. Caring: is it consistent with people’s responsibilities to each other?
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36
Q

Social responsibility:

A

Attempt of a business to balance its commitments to groups and people in its environment. (Customers, businesses, employees, investors, etc.)

37
Q

Organizational Stakeholders:

A

Groups of people that are directly affected by the practices of an organization.

38
Q

Stakeholder model of responsibility:

A

1: customers
2: employees
3: investors
4: suppliers
5: local communities.

39
Q

Ethics reform needs to start,

A

At the “top” level with executives

40
Q

Approaches to social responsibility:

A
  • Obstructionist stance
  • defensive stance
  • accommodative stance
  • proactive stance
41
Q

Obstructionist stance:

A

Approach to social responsibility that involved doing as little as possible and may involve attempts to deny or cover up violations.

42
Q

Defensive stance:

A

Approach to social responsibility by which a company meets only minimal legal requirements in its commitments to groups in its social environment.

43
Q

Accommodative stance:

A

Approach to social responsibility by which a company, if asked to, exceeds legal minimums it its commitment to groups in the social environment.

44
Q

Proactive Stance:

A

Approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups in its social environment.

45
Q

Regulation:

A

Establishment of laws and rules that dictate what organizations can and cannot do.

46
Q

Political Action Committees (PAC)s

A

Special organizations created to solicit money and then distribute it to political candidates.

47
Q

Legal compliance:

A

Extent to which the organization conforms to local, state, federal and international laws.

48
Q

Ethical compliance:

A

Extends to which the members of an organization follow basic ethical and legal standards.

49
Q

Small Business administration:

A

Government agency charged with assisting small business.

50
Q

Small business

A

Independently owned business that has little influence in its market

51
Q

55.8% of all businesses are

A

Services

52
Q

Entrepreneur:

A

Businessperson who accepts both the risks and opportunities involved in creating and operating a new business venture.

53
Q

Established market:

A

Market in which many firms compete according to relatively well-defined criteria.

54
Q

First-mover advantage:

A

Any advantage that comes to a firm because it exploits an opportunity before any other firm does.

55
Q

Franchise:

A

Arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)

56
Q

Venture capital company:

A

Group of small investors who invest money in companies with rapid growth potential.

57
Q

Small Business Investment Company (SBIC):

A

Government regulated investment company that borrows money from the SBA to invest in or lend to a small business.

58
Q

Reasons for business failure:

A
  • Managerial incompetence / inexperience
  • neglect
  • weak control systems
  • insufficient capital (ain’t got cash)
59
Q

Reasons for business success:

A
  • hardwork, drive, and dedication.
  • Market demand for the products or services being provided.
  • managerial competence
  • luck
60
Q

Sole proprietorship:

A

Business owned and usually operated by one person who is responsible for all of its debts.

61
Q

Advantages of sole proprietorships:

A
  • “own boss”
  • easy to form
  • low cost
  • tax benefits
62
Q

Disadvantages of sole proprietorships:

A
  • Unlimited liability: legal principle holding owners responsible for paying off all debts of a business.
  • lack of continuity (company dissolves when owner dies)
  • demands upon one person for many responsibilities.
63
Q

General partnership:

A

Business with two or more owners who share in both the operation of the firm and the financial responsibility for debts.

64
Q

Advantages of partnership:

A

-ability to grow by adding new talent and money.

-usually have partnership agreement
Rules when going into business together

65
Q

Disadvantages to partnerships:

A
  • unlimited liability
  • lack of continuity if owner of one side of company dies
  • difficulty of transferring ownership.
66
Q

Limited partnership:

A

Type of partner ship consisting of limited partners and a general partner.

67
Q

Limited partner:

A

Partner who does not share in a firms management and is liable for its debts only to the limited of said partners investment.

68
Q

General partner:,

A

Partner who activity manages a firm and who has unlimited liability for its debts.

69
Q

Master Limited Partnership:

A

Form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits.

70
Q

Cooperatives:

A

Form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits.

71
Q

Corporation:

A

Business that is legally considered an entity separate from its owners and is liable for its own debts;
Liability extends to the limits of their investments.

72
Q

Limited liability:

A

Legal principle holding investors liable for a firms debts only to the limits of their personal investments in it.

73
Q

Advantages of incorporation:

A
  • limited liability.
  • continuity. Independent of founders/owners
  • sell stock for money
74
Q

Disadvantages of incorporation:

A
  • tender offer possibility

- double taxation

75
Q

Tender offer:

A

Offer to buy shares made by a prospective buyer directly to a target corporations shareholders who then make individual decisions whether to sell.

76
Q

Double Taxation:

A

Situation in which taxes may be payable both by a corporation on its profited and by shareholders on dividend incomes.

77
Q

S corporation:

A

Hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for taxes purposes.

78
Q

Limited liability corporation (LLC):

A

Hybrid of a publicly held corporation and a partnership in which owners are taxes as partners but enjoy the benefits of limited liability.

79
Q

Professional corporation:

A

Form of ownership allowing professionals to take advantage of corporate business liability and unlimited professional liability.

80
Q

Corporate governance:,

A

Roles of share holders, directors, and other managers in corporate decision making and accountability.

81
Q

Stockholder (shareholder)

A

Owner of shares of stock in a corporation.

82
Q

Board of directors:

A

Governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets.

83
Q

Officers:

A

Top management team of a corporation

84
Q

Chief executive officer (ceo)

A

Top manager who is responsible for the overall performance of a corporation.

85
Q

Strategic alliance:

A

Strategy in which two or more organizations collaborate on a project for mutual gain.

86
Q

Joint venture:

A

Strategic alliance in which the collaboration involves join ownership of the new venture.

87
Q

Employee stock ownership plan:

A

Arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control of its voting rights.

88
Q

Institutional investor:

A

Large investor, such as a mutual fund or pension fund, that purchases large blocks of corporate stock.

89
Q

Divestiture:,

A

Strategy whereby a firm sells one or more of its business units. Selling of “unimportant” or unwanted part of a business.

90
Q

Spin off:

A

Strategy of setting up one or more corporate units as new independent corporations.

Intro to Business (4 decks)

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