Chapters 1-4 Flashcards
1
Q
value
A
the relationship between the price of a good or a service and the benefits that it offers its customers
2
Q
business
A
any activity that provides goods and services in an effort to earn a profit
3
Q
profit
A
the money that a business earns in sales (or revenue) minus expenses, such as the cost of goods and the cost of salaries
4
Q
loss
A
when a business incurs expenses that are greater than its revenue
5
Q
entrepreneurs
A
people who risk their time, money, and other resources to start and manage businesses
6
Q
standard of living
A
the quality and quantity of goods and services available to a population
7
Q
quality of life
A
the overall sense of well-being experienced by either an individual or a group
8
Q
not-for-profit organization
A
business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain
9
Q
factors of production
A
four fundamental elements - natural resources, capital, human resources, and entrepreneurship - that businesses need to achieve their objectives. Some combination of these factors is crucial for an economic system to create wealth
10
Q
business environment
A
the setting in which business operates. The five key components are economic environment, competitive environment, technological environment, social environment, and global environment
11
Q
speed-to-market
A
the rate at which a new product moves from conception to commercialization
12
Q
business technology
A
any tools - especially computers, telecommunications, and other digital products - that businesses can use to become more efficient and effective
13
Q
World Wide Web
A
the service that allows computer users to easily access and share information on the Internet in the form of text, graphics, video, and animation
14
Q
e-commerce
A
business transactions conducted online, typically via the Internet
15
Q
demographics
A
the measurable characteristics of a population; factors include: population size, density, age, gender, and race
16
Q
free trade
A
an international economic and political movement designed to help goods and services flow more freely across international boundaries
17
Q
General Agreement on Tariffs and Trade (GATT)
A
an international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide
18
Q
communication
A
the transmission of information between a sender and a recipient
19
Q
encoding
A
the act of putting a message in terms that are understandable to others
20
Q
communication channels
A
the various ways in which a message can be sent, ranging from one-on-one in-person messages to Internet message boards
21
Q
decoding
A
the receiver putting a message in terms that she or he can understand
22
Q
feedback
A
how the receiver responds to a message
23
Q
noise
A
any interference that causes the message you send to be different from the message your audience understands
24
Q
communication barriers
A
obstacles to effective communication, typically defined in terms of physical, language, body language, personal experience, cultural, perceptual, and organizational barriers
25
intercultural communication
communication among people with differing cultural backgrounds
26
nonverbal communication
communication that does not use words. Common forms of nonverbal communication include gestures, posture, facial expressions, tone of voice, and eye contact
27
active listening
attentive listening that occurs when the listener focuses his or her complete attention on the speaker
28
bias
a preconception about members of a particular group. Common forms of bias include gender bias; age bias; and race, ethnicity, or nationality bias
29
active voice
sentence construction in which the subject performs the action expressed by the verb (e.g., My sister wrote the paper)
30
passive voice
sentence construction in which the subject does not do the action expressed by the verb; rather, the subject is acted upon (e.g., the paper was written by my sister)
31
dynamic delivery
vibrant, compelling presentation delivery style that grabs and holds the attention of the audience
32
ethics
a set of beliefs about right and wrong, good and bad
33
universal ethical standards
ethical norms that apply to all people across a broad spectrum of situations
34
business ethics
the application of right and wrong, good and bad in a business setting
35
ethical dilemma
a decision that involves a conflict of values; every potential course of action has some significant negative consequences
36
code of ethics
a formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations
37
whistleblowers
employees who report their employer's illegal or unethical behaviour to either the authorities or the media
38
social responsibility
the obligation of a business to contribute to society
39
stakeholders
any groups that have a stake - or personal interest - in the performance and actions of an organization
40
consumerism
a social movement that focuses on four key consumer rights: (1) the right to be safe, (2) the right to be informed, (3) the right to choose, and (4) the right to be heard
41
planned obsolence
the strategy of deliberately designing products to fail in order to shorten the time between purchases
42
Sarbanes-Oxley Act
U.S. federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements
43
corporate philanthropy
all business donations to not-for-profit groups, including money, products, and employee time
44
cause-related marketing
marketing partnerships between businesses and not-for-profit organizations, designed to spike sales for the company and raise money for the not-for-profit organization
45
corporate responsibility
business contributions to the community through the actions of the business itself rather than donations of money and time
46
sustainable development
doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs
47
carbon footprint
the amount of greenhouse gases that a firm emits throughout its operations, both directly and indirectly
48
green marketing
developing and promoting environmentally sound products and practises to gain a competitive edge
49
social audit
a systematic evaluation of how well a firm is meeting its ethics and social responsibility goals
50
economy
a financial and social system of how resources flow through society, from production, to distribution, to consumption
51
economics
the study of the choices that people, companies, and governments make in allocating society's resources
52
macroeconomics
the study of a country's overall economic issues, such as the employment rate, the gross domestic product, and taxation policies
53
microeconomics
the study of smaller economic units such as individual consumers, families, and individual businesses
54
fiscal policy
government efforts to influence the economy through taxation and spending
55
budget surplus
overage that occurs when revenue is higher than expenses over a given period of time
56
budget defecit
shortfall that occurs when expenses are higher than revenue over a given period of time
57
federal debt
the sum of all the money that the federal government has borrowed over the years and not yet repaid
58
monetary policy
Bank of Canada decisions that shape the economy by influencing interest rates and the supply of money
59
M1 money supply
includes all currency plus chequing accounts and traveller's cheques
60
M2 money supply
includes all of M1 money supply plus most savings accounts, money market accounts, and certificates of deposit
61
open market operations
the Bank of Canada function of buying and selling government securities, which include treasury bonds, notes, and bills
62
bank rate
the rate of interest that the Bank of Canada charges when it loans funds to banks
63
reserve requirement
a rule that specifies the minimum amount of reserves (or funds) a bank must hold, expressed as a percentage of the bank's deposits
64
Canada Deposit Insurance Corporation (CDIC)
a federal Crown corporation that insures deposits in banks and thrift institutions for up to $100,000 per customer, per bank
65
economic system
a structure for allocating limited resources
66
capitalism
an economic system - also known as the private enterprise or free market system - based on private ownership, economic freedom, and fair competition
67
pure competition
a market structure with many competitors selling virtually identical products. Barriers to entry are quire low
68
monopolistic competition
a market structure with many competitors selling differentiated products. Barriers to entry are low
69
oligopoly
a market structure with only a handful of competitors selling products that are either similar or different. Barriers to entry are typically high
70
monopoly
a market structure with one producer completely dominating the industry, leaving no room for any significant competitors. Barriers to entry tend to be virtually insurmountable
71
natural monopoly
a market structure with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones. Most natural monopolies are government sanctioned and regulated
72
supply
the quantity of products that producers are willing to offer for sale at different market prices
73
supply curve
the graphed relationship between price and quantity from a supplier standpoint
74
demand
the quantity of products that consumers are willing to buy at different market prices
75
demand curve
the graphed relationship between price and quantity from a customer demand standpoint
76
equilibrium price
the price associated with the point at which the quantity demanded of a product equals the quantity supplied
77
socialism
an economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare
78
communism
an economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government
79
mixed economies
economies that embody elements of both planned and market-based economic systems
80
privatization
the process of converting government-owned businesses to private owned
81
gross domestic product (GDP)
the total value of all final goods and services produced within a nation's physical boundaries over a given period of time
82
unemployment rate
the percentage of people in the labour force of employment age who do not have jobs and are actively seeking employment
83
business cycle
the periodic contraction and expansion that occur over time in virtually every economy
84
contradiction
a period of economic downturn, marked by rising unemployment and failing business production
85
recession
an economic downturn marked by a decrease in the GDP for two consecutive quarters
86
depression
an especially deep and long-lasting recession
87
recovery
a period of rising economic growth and employment
88
expansion
a period of robust economic growth and high employment
89
inflation
a period of rising average prices across the economy
90
hyperinflation
an average monthly inflation rate of more than 50 percent
91
disinflation
a period of slowing average price increases across the economy
92
deflation
a period of falling average prices across the economy
93
consumer price index (CPI)
a measure of inflation that evaluates the change in the weighted-average price of goods and services that the average consumer buys each month
94
producer price index (PPI)
a measure of inflation that evaluates the change over time in the weighted-average wholesale prices
95
productivity
the basic relationship between the production of goods and services (output) and the resources needed to produce them (input), calculated via the following equation: Output/Input = Productivity
96
Define business and discuss the role of business in the economy.
A business is any activity that provides goods and services in an effort to earn a profit. Profit is the money that a business earns in sales minus expenses such as the cost of goods and the cost of salaries. Profit potential provides a powerful incentive for people to start their own businesses or to become entrepreneurs. Successful businesses create wealth, which increases the standard of living for virtually all members of society.
97
Explain the evolution of modern business.
Business historians typically divide our business history into five distinct eras, which overlap during the periods of transition.
1 - Industrial Revolution: From the mid-1700s to the mid-1800s, technology fuelled a period of rapid industrialization. Factories sprang up in cities, leading to a mass production and specialization of labour.
2 - Entrepreneurship Era: During the second half of the 1800s, large-scale entrepreneurs emerged, building business empires that created enormous wealth, but often at the expense of workers and consumers.
3 - Production Era: In the early 1900s, major businesses focused on further refining the production process, creating huge efficiencies. The assembly line, introduced in 1913, boosted productivity and lowered costs.
4 - Marketing Era: After World War II, consumers began to gain power. As goods and services flooded the market, the marketing concept emerged: a consumer-first orientation as a guide to business decision making.
5 - Relationship Era: With the technology boom in the 1990s, businesses have begun to look beyond the immediate transaction, aiming to build a competitive edge through long-term customer relationships.
98
Discuss the role of not-for-profit organizations in the economy.
Not-for-profit organizations often work hand in hand with business to improve the quality of life in our society. Not-for-profits are business-like establishments that contribute to economic stability and growth. Similar to businesses, not-for-profits generate revenue and incur expenses. Their goal is to use any revenue above and beyond expenses to advance the goals of the organization rather than to make money for its owners. Some not-for-profits -- such as museums, schools, and theatres -- can act as economic magnets for communities, attracting additional investment.
99
Outline the core factors of production and how they influence the economy.
The four factors of production are the fundamental resources that both businesses and not-for-profit organizations use to achieve their objectives.
1 - Natural resources: All inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. The value of natural resources tends to rise with high demand, low supply, or both.
2 - Capital: The manmade resources that an organization needs to produce goods or services. The elements of capital include machines, tools, buildings, and technology.
3 - Human resources (Labour): The physical, intellectual, and creative contributions of everyone who works within an economy. Education and motivation have become increasingly important as technology replaces manual labour jobs.
4 - Entrepreneurship: Entrepreneurs take the risk of launching and operating their own businesses. Entrepreneurial enterprises can create a tidal wave of opportunity by harnessing the other factors of production.
100
Describe today's business environment and discuss each key dimension.
Accelerating change marks every dimension of today's business environment.
1 - Economic environment: The Canadian economy remains relatively strong because the government actively supports free enterprise and fair competition.
2 - Competitive environment: As global competition intensifies, leading-edge companies have focused on long-term customer satisfaction as never before.
3 - Technological environment: The recent technology boom has transformed business, establishing new industries and burying others.
4 - Social environment: The Canadian population continues to diversify. Consumers are gaining power, and society has higher standards for business behaviour.
5 - Global environment: The Canadian economy works within the context of the global environment. A key factor is rapid economic growth in China and India.
101
Explain how current business trends might impact your career choices.
With automation picking up speed, many traditional career choices have become dead-ends. But some things -- including empathy, creativity, change management, and great communication -- can't be digitized. Having these skills can provide you with personal and financial opportunity.
102
Explain the importance of excellent business communication.
Effective communication happens when relevant meaning is transmitted from the sender to the receiver. Skillful communicators save time and money and develop deeper, more trusting relationships with their colleagues. Anything that interferes with the correct transmission of your message is a barrier to communication. To communicate effectively, you should be able to identify and surmount any barriers that stand between you and your audience. The result? Greater long-term success in every aspect of business.
103
Describe the key elements of nonverbal communication.
The key elements of nonverbal communication include eye contact. tone of voice, facial expressions, gestures, and posture. Studies suggest that on average only 7 percent of meaning during face-to-face communication comes from the verbal content of the message, which magnifies the importance of every element of nonverbal communication. Active listening also plays an influential role. The starting point is empathy: a genuine attempt to understand and appreciate the speaker. You should signal your focus to the speaker through verbal cues such as "I understand your point" and nonverbal cues such as nods, eye contact, and leaning forward. The result will be better relationships and better information for you.
104
Compare, contrast, and choose effective communication channels.
Communication channels differ significantly in terms of richness: the amount of information that they offer the audience. The spectrum ranges from written communication at the low end to face-to-face meetings at the high end. The best choice depends on your objective, your message, and your audience. To ensure that your communication achieves your goals, always consider the needs and expectations of your audience. If you tailer each message with the audience in mind, you'll give yourself a competitive edge in terms of the time, attention, and response of your audience.
105
Choose the right words for effective communication.
The right words can make the difference between a message your audience absorbs and a message your audience ignores. Keep these considerations in mind: analyze your audience, be concise, avoid slang, avoid bias, and use active voice.
106
Write more effective business memos, letters, and e-mails.
Here, too, you should begin with the needs of your audience; their anticipated response should drive the structure of your writing. Determine the "bottom line" of your communication and be sure to deliver it upfront. Your message itself should have a natural tone and be completely free of grammatical errors.
107
Create and deliver successful verbal presentations.
A great presentation begins with a hook that draws in your audience and engages their attention. The body of the presentation typically focuses on three key points, supported by credible information and persuasive arguments. The close summarizes the key points and often refers back to the opening hook. Dynamic delivery is simply a matter of practice, with a focus on knowing your material.
108
Define ethics and explain the concept of universal ethical standards.
Ethics is a set of beliefs about right and wrong, good and bad. Who you are as a human being, your family, and your culture all play a role in shaping your ethical standards. The laws of each country usually set minimum ethical standards, but truly ethical standards typically reach beyond minimum legal requirements. Despite some significant cultural and legal differences, people around the globe tend to agree on core values, which can serve as a starting point for universal ethical standards across a wide range of situations: trustworthiness, respect, responsibility, fairness, caring, and citizenship.
109
Describe business ethics and ethical dilemmas.
Business ethics is the application of right and wrong, good and bad in a business setting. Ethical dilemmas arise when you face business decisions that throw your values into conflict. These are decisions that force you to choose among less than ideal options because whatever choice you make will have some significant negative consequences.
110
Discuss how ethics relates to both the individual and the organization.
Ethical choices begin with ethical individuals. To help people make good choices experts have developed frameworks for reaching ethical decisions. While the specifics vary, the core principles of most decision guides are similar: (1) Do you fully understand each dimension of the problem? (2) Who would benefit? Who would suffer? (3) Are the alternatives legal? Are they fair? (4) Does your decision make you feel comfortable at a "gut feel" level? (5) Could you defend your decision on the nightly TV news? (6) Have you considered and reconsidered your responses to each question? : While each person is responsible for his or her own actions, the organization can also have a dramatic influence on the conduct of individual employees. An ethical culture -- which includes ethical leadership from top executives and accountability at every level of the organization -- has an outsized impact on individual conduct. But formal ethics programs also play a crucial role. A written code of ethics -- a document that lays out the values and priorities of the organization -- is the cornerstone of a formal ethics program. Other key elements include ethics training and a clear enforcement policy for ethical violations.
111
Define social responsibility and examine the impact on stakeholder groups.
Social responsibility is the obligation of a business to contribute to society. Enlightened companies carefully consider the priorities of all stakeholder -- groups who have an interest in their actions and performance -- as they make key decisions. Core stakeholder groups for most businesses are listen below, along with key obligations. (1) Employees: Treat employees with dignity, respect, and fairness. Ensure that hard work and talent pay off. Help workers balance emerging work-life priorities. (2) Customers: Provide quality products at a fair price. Ensure that customers are safe and informed. Support consumer choice and consumer dialogue. (3) Investors: Create an ongoing stream of profits. Manage investor dollars according to the highest legal and ethical standards. Support full disclosure. (4) Community: Support not-for-profit groups that improve the community and fit with your company. Minimize the environment impact of your business.
112
Explain the role of social responsibility in the global arena.
Social responsibility becomes more complex in the global arena due largely to differences in the legal and cultural environments. Bribery and corruption are key issues, along with concern for human rights and environmental standards.
113
Describe how companies evaluate their efforts to be socially responsible.
Many companies -- even some entire industries -- monitor themselves. The process typically involves establishing objectives for ethics and social responsibility and then measuring achievement of those objectives on a systematic, periodic basis. Other groups play watchdog roles as well. Key players include activist customers, investors, unions, environmentalists, and community groups.
114
Define economics and discuss the global economics crisis.
Economics -- the study of how people, companies, and governments allocate resources -- offers vital insights regarding the forces that impact every business on a daily basis. Understanding economics helps businesspeople make better decisions, which can lead to greater short-term and long-term profitability. Macroeconomics is the study of broad economic trends. Microeconomics focuses on the choices made by smaller economic units, such as individual consumers, families, and businesses. Globally, there has been an economic slowdown over the last several years, and it is predicted to continue. The most troubled area is the eurozone, but because the global economies are not so interdependent, trouble there means slower growth elsewhere as well. The economics of Canada and the United States will most likely grow, but at slower rates than we are used to, and Canada's growth is very much dependent on what will happen in the United States.
115
Analyze the impact of fiscal and monetary policy on the economy.
Fiscal policy and monetary policy refer to efforts to shape the health of the economy. Fiscal policy involves government taxation and spending decisions designed to encourage growth and boost employment. Monetary policy refers to decisions by the Bank of Canada that influence the size of the money supply and the level of interest rates. Both fiscal and monetary policies played a pivotal role in mitigating the impact of the recent financial crisis and establishing a framework for recovery. Canada was thereby able to weather the crisis better than many other countries. These tools can also help sustain economic expansions.
116
Explain and evaluate the free market system and supply and demand.
Capitalism, also known as the free market system, is based on private ownership, economic freedom, and fair competition. In a capitalist economy, individuals, businesses, or not-for-profit organizations privately own the vast majority of enterprises. As businesses compete against each other, quality goes up, prices remain reasonable, and choices abound, raiding the overall standard of living. The interplay between the forces of supply and demand determines the selection of products and prices available in a free market economy. Supply refers to the quantity of products that producers are willing to offer for sale at different market prices at a specific time. Demand refers to the quantity of products that consumers are willing to buy at different market prices at a specific time. According to economic theory, markets will naturally move toward the point at which supply and demand are equal: the equilibrium point.
117
Explain and evaluate planned market systems.
In planned economies, the government -- rather than individual choice -- plays a pivotal role in controlling the economy. The two main types of planned economies are socialism and communism. While planned economies aim to create more equity among their citizens, they tend to be more prone to corruption and less effective at generating wealth than market-based economies.
118
Describe the trend toward mixed market systems.
Most of today's nations have mixed economies, falling somewhere along a spectrum that ranges from pure planned at one extreme to pure market at the other. Over the past 30 years, most major economies around the world have moved toward the market end of the spectrum, although recently -- in the wake of the global financial crisis -- Canada has added more planned elements to the economy.
119
Discuss key terms and tools to evaluate economic performance.
Because economic systems are so complex, no one measure captures all the dimensions of economic performance. But each measure yields insight on overall economic health. (1) Gross domestic product (GDP): The total value of all final goods and services produced within a nation's physical boundaries over a given period of time. (2) Unemployment rate: The percentage of the labour force of employment age who don't have jobs and who are actively seeking employment. (3) Business cycle: The periodic expansion and contraction that occur over time in virtually every economy. (4) Inflation rate: The rate at which prices are rising across the economy. The government tracks the consumer price index and the producer price index. (5) Productivity: The relationship between the goods and services that an economy produces and the inputs needed to produce them.
