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WORLD OF BUSINESS > exam #3 > Flashcards

exam #3 Flashcards

1
Q

motivation

A

The combination of forces that move individuals to take certain actions and avoid other actions

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2
Q

engagement

A

An employee’s rational and emotional commitment to his or her work

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3
Q

scientific management

A

A management approach designed to improve employees’ efficiency by scientifically studying their work

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4
Q

the Hawthorne effect

A

employees change their behavior because they are being studied and given special treatment

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5
Q

Maslow’s hierarchy of needs

A

self-actualization needs, esteem needs, social needs, safety needs, physiological needs

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6
Q

theory X

A

employees are irresponsible, unambitious, and dislike work, and that managers must use force, control, or threats to motivate them

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7
Q

theory Y

A

employees enjoy meaningful work, are naturally committed to certain goals, are capable of creativity, and seek out responsibility under the right condition

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8
Q

Herzberg’s two factors

A

A model that divides motivational forces into satisfiers (“motivators”) and dissatisfiers (“hygiene factors”)

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9
Q

expectancy theory

A

employees put into their work depends on expectations about their own ability to perform, expectations about likely rewards, and the attractiveness of those rewards

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10
Q

equity theory

A

The idea that employees base their level of satisfaction on the ratio of their inputs to the job and the outputs or rewards they receive from it

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11
Q

management by objectives(MBO)

A

managers and employees work together to structure personal goals and objectives for every individual, department, and project to mesh with the organization’s goals

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12
Q

system

A

An interconnected and coordinated set of elements and processes that convert inputs to desired outputs

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13
Q

supply chain

A

A set of connected systems that coordinates the flow of goods and materials from suppliers all the way through to final customers

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14
Q

supply chain management

A

The business procedures, policies, and computer systems that integrate the various elements of the supply chain into a cohesive system

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15
Q

production and operations management

A

Overseeing all the activities involved in producing goods and services

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16
Q

capacity planning

A

Establishing the overall level of resources needed to meet

customer demand

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17
Q

what is the importance of capacity planning in Mike’s bikes?

A
  • determines the ability to meet future demand
  • initial cost of capacity
  • relationship between capacity and operating costs
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18
Q

what does SCUs stand for?

A

standard capacity units

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19
Q

How many SCUs does a road bike take up?

A

1.0 SCU

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20
Q

How many SCUs does a mountain bike take up?

A

.5 SCU

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21
Q

How many SCUs does a youth bike take up?

A

.25 SCU

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22
Q

total/theoretical capacity

A

the maximum output per unit of time the process can achieve for a short period of time under ideal operating conditions

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23
Q

effective capacity

A

the actual output per unit of time that the organization can
reasonably be expected to sustain in the long run under normal operating conditions

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24
Q

actual output

A

what is actually produced(% of total capacity)

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25
Q

the formula for capacity requirements?

A

capacity requirements = (forecasted sales x required SCUs) / production efficiency

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26
Q

what are the two options to deal with not enough capacity?

A

improve efficiency or increase the size of the factory

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27
Q

what is the best option for dealing with having not enough capacity?

A

improving the size of the factory, because it is less expensive on a large scale

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28
Q

productivity

A

The efficiency with which an organization can convert inputs to outputs

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29
Q

lean systems

A

Systems that maximize productivity by reducing waste and delays

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30
Q

just-in-time inventory system

A

goods and materials are delivered throughout the production process right before they are needed

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31
Q

efficiency expenditures

A

money spent on reducing wastage during production

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32
Q

mass production

A

the creation of identical goods or services, usually in large quantities

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33
Q

customized production

A

The creation of a unique good or service for each customer

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34
Q

quality

A

The degree to which a product or process meets reasonable or agreed-upon expectations

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35
Q

quality control

A

Measuring quality against established standards after the good or service has been produced and weeding out any defective products

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36
Q

how is quality gauged?

A

by customer satisfaction

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37
Q

what are the two sources of external financing?

A

debt and equity

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38
Q

what is debt?

A

financing provided by lenders/creditors(banks or long tern loans/bonds)

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39
Q

what is equity?

A

financing provided by shareholders/stockholders(preferred stockholders or common stockholders)

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40
Q

details of debt

A
  • No voting rights
  • Obligatory payment(coupon interest)
  • Fixed life/maturity(must be repaid)
  • Interest is a tax-deductible expense
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41
Q

details of equity

A
  • Voting rights(elect board of directors),
  • Discretionary payments(dividends),
  • Permanent capital(principal never repaid),
  • Dividends are not tax-deductible(paid with after-tax income)
42
Q

private equity

A

Ownership assets that aren’t publicly traded; includes venture capital

43
Q

public equity

A

Common stock that is publicly traded after a public offering through an “initial public offering”(IPO)

44
Q

underwriter

A

A specialized type of bank that buys the shares from the company preparing an IPO and sells them to investors

45
Q

prospectus

A

An SEC-required document that discloses required information about the company, its finances, and its plans for using the money it hopes to raise

46
Q

The Shareholders’ Equity section of a firm’s Balance Sheet typically contains 2 elements…

A

share capital(preferred stock/common stock) and retained earnings

47
Q

retained earnings

A

consists of the firm’s cumulative net income minus any dividends paid out(i.e., that portion of the firm’s earnings that are reinvested/retained).

48
Q

what does it mean when we say that C|S holders have a residual claim on income?

A

they receive dividends after creditors, taxes, and preferred
stockholders have been paid, and then only at the discretion of the firm’s directors

49
Q

what does it mean when we say that C|S holders have a residual claim on assets?

A

in liquidation, C|S holder get the last claim on the firm’s assets

50
Q

price/earnings ratio

A

The market value per share divided by the earnings per share

51
Q

stock split

A

The act of dividing a share into two or more new shares and reducing the market value by the same ratio

52
Q

what happens when a company issues stock?

A
  • provides an inflow of cash
  • less financial obligations than issuing debt
  • unlike debt, stock never has to be repaid
  • dilutes ownership interest of existing shareholders
53
Q

what happens when a company repurchases shares?

A

Concentrates ownership interest among remaining shareholders

54
Q

dividends

A

payments to stockholders from a corporation’s after-tax profits

55
Q

debt to equity ratio

A

total liabilities / book value of equity

56
Q

earnings per share

A

net income / # of shares outstanding

57
Q

dividend yield ratio

A

dividends per share / market price of stock per share

58
Q

net income formula

A

total sales - expenses

59
Q

financial management

A

Planning for a firm’s money needs and managing the allocation and spending of funds

60
Q

risk / return trade-off

A

The balance of potential risks against potential rewards

61
Q

what are the key activities of the financial manager?

A
  • Financial planning(budgeting)
  • Investments(spending money)
  • Financing(raising money)
62
Q

what is the goal of the financial manager?

A

maximize shareholder value

63
Q

debt financing

A

Arranging funding by borrowing money

64
Q

equity financing

A

Arranging funding by selling ownership shares in the company, publicly or privately

65
Q

short-term financing

A

Financing used to cover current expenses (generally repaid within a year)

66
Q

long-term financing

A

Financing used to cover long-term expenses such as assets (generally repaid over a period of more than one year)

67
Q

leverage

A

The technique of increasing the rate of return on an investment by financing it with borrowed funds

68
Q

capital structure

A

A firm’s mix of debt and equity financing

69
Q

what are bonds?

A

a form of long-term debt; they are interest-bearing certificates of debt

70
Q

how do bonds payments work?

A

The borrower agrees to pay interest(the coupon interest payments) at a specified rate of interest, then at the end of the bonds life(maturity) the borrower has to pay back the principal(par value)

71
Q

Coupon interest rate

A

the percentage of the par value that will be paid out annually in the form of interest

72
Q

par value(principle/face value)

A

the amount that is returned to the bondholder at the time of maturity

73
Q

maturity

A

the length of time until the bond issuer(i.e., the firm) returns the par value to the bondholder

74
Q

bond indenture

A

the contract between a firm and its bondholders

75
Q

ethics

A

The rules or standards governing the conduct of a person or group

76
Q

transparency

A

The degree to which affected parties can observe relevant aspects of transactions or decisions

77
Q

insider trading

A

The use of unpublicized information that an individual gains from the course of his or her job to benefit from fluctuations in the stock market

78
Q

code of ethics

A

A written statement that sets forth the principles that guide an organization’s decision

79
Q

whistle-blowing

A

The disclosure of information by a company insider that exposes illegal or unethical behavior by others within the organization

80
Q

ethical lapse

A

A situation in which an individual or a group makes a decision that is morally wrong, illegal, or unethical

81
Q

ethical dilemma

A

A situation in which more than one side of an issue can be supported with valid arguments

82
Q

conflict of interest

A

A situation in which competing loyalties can lead to ethical lapses, such as when a business decision may be influenced by the potential for personal gain

83
Q

corporate social responsibility

A

The idea that business has obligations to society beyond the pursuit of profits

84
Q

discrimination

A

denial of opportunities to individuals on the basis of some characteristic that has no bearing on their ability to perform in a job

85
Q

affirmative action

A

Activities undertaken by businesses to recruit and promote members of groups whose economic progress has been hindered through either legal barriers or established practices

86
Q

philanthropy

A

The donation of money, time, goods, or services to charitable, humanitarian, or educational institutions

87
Q

Strategic corporate social responsibility

A

Social contributions that are directly aligned with a company’s overall business strategy

88
Q

what is the triple bottom line?

A
  1. profit
  2. people
  3. the planet
89
Q

distribution strategy

A

A firm’s overall plan for moving products through marketing intermediaries and on to final customers

90
Q

marketing intermediaries

A

Businesspeople and organizations that assist in moving and marketing goods between producers and consumers(Service providers may use marketing intermediaries too)

91
Q

what is the order of the distribution channel?

A
  1. producer
  2. wholesaler
  3. retailer
  4. customer
92
Q

what groups makeup marketing intermediaries?

A

the wholesaler and retailer

93
Q

wholesalers

A

Intermediaries that sell products to other intermediaries for resale

94
Q

retailers

A

Intermediaries that sell goods and services to individuals for their own personal use

95
Q

what do wholesalers do?

A

– Transport and store products

– Break shipments into smaller units

96
Q

what do retailers do?

A

– Provide promotional and sales support
– Assume risks
– Provide financing

97
Q

what is a direct-distribution channel?

A

a distribution channel that goes right from producers to consumer

98
Q

intensive market coverage

A

as many retail outlets as possible

99
Q

selective market coverage

A

a limited number of outlets

100
Q

exclusive market coverage

A

one(or very few) outlets in each geographical area

WORLD OF BUSINESS (2 decks)

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