Exam questions Flashcards
Name + describe the main financial statements
Income Statement
This statement shows a company’s revenues and expenses over a specific period, typically a quarter or year. It helps determine whether the company made a profit or a loss during that time. It’s also known as the Profit and Loss Statement.
Balance Sheet
The balance sheet provides a snapshot of a company’s financial position at a specific point in time. It lists assets, liabilities, and equity, and follows the equation:
Assets = Liabilities + Equity.
Cash Flow Statement
This statement shows the movement of cash in and out of the business. It is divided into three sections:
- Operating activities
- Investing activities
- Financing activities
It helps investors understand how the company is managing its cash.
Describe Product Life Cycle
The Product Life Cycle describes the stages a product goes through from its introduction to the market until it is eventually phased out. There are four main stages:
Introduction
The product is launched. Sales are usually low, and marketing costs are high as the company tries to create awareness and attract early adopters.
Growth
Sales begin to rise rapidly. The product gains market acceptance, profits improve, and competitors may enter the market.
Maturity
Sales reach their peak and start to level off. The market becomes saturated, competition is intense, and the company may need to adjust pricing or add features to maintain market share.
Decline
Sales and profits begin to fall. This could be due to changing consumer preferences, new technologies, or better alternatives. Companies might discontinue the product or try to reposition it.
Describe assets and liabilities in a balance sheet. Give examples
Assets
Assets are resources owned by the company that have economic value and can provide future benefits.
Examples of Assets:
- Cash – money in the bank
- Accounts Receivable – money owed by customers
- Inventory – goods ready for sale
- Property, Plant, and Equipment – buildings, machinery, vehicles
- Investments – shares or bonds the company holds
Liabilities
Liabilities are obligations or debts that the company owes to external parties, such as lenders or suppliers.
Examples of Liabilities:
- Accounts Payable – money owed to suppliers
- Loans Payable – bank loans or other borrowed funds
- Wages Payable – salaries due to employees
- Taxes Payable – taxes owed to the government
- Accrued Expenses – expenses that have been incurred but not yet paid
What are mergers? What are the reasons of their failure?
A merger is when two companies combine to form one new entity. The goal is usually to increase market share, reduce costs, or gain new capabilities. Mergers can be between companies of similar size or between a larger and smaller company.
Despite good intentions, many mergers fail. Common reasons include:
Cultural Differences
Employees from different organizations may have conflicting work styles or values, leading to poor integration.
Poor Integration Planning
Without a clear plan for combining systems, processes, and teams, chaos can follow.
Overestimating Synergies
Companies often expect too much in terms of cost savings or revenue growth, which don’t materialize.
Leadership Conflicts
Power struggles between executives can derail decision-making.
Loss of Key Employees
Uncertainty or dissatisfaction after a merger can lead to talent leaving the company.
Customer Confusion or Loss
Changes in branding, service, or product lines may cause customers to leave.
What are Herzberg’s and McGregor’s approaches towards motivation? Compare them.
Herzberg’s Two-Factor Theory
Frederick Herzberg suggested that two sets of factors influence employee motivation:
Motivators (Intrinsic factors):
These lead to job satisfaction and include:
Achievement
Recognition
Responsibility
Personal growth
The work itself
Hygiene Factors (Extrinsic factors):
These do not motivate, but if they are missing or inadequate, they cause dissatisfaction. Examples:
Salary
Company policies
Working conditions
Job security
Supervision
🟢 Key idea: Just fixing hygiene factors isn’t enough—you need motivators to truly engage employees.
McGregor’s Theory X and Theory Y
Douglas McGregor proposed two contrasting views of workers:
Theory X:
Assumes employees dislike work
Need constant supervision
Avoid responsibility
Are motivated mainly by money and job security
Theory Y:
Believes employees enjoy work
Are self-motivated
Seek responsibility and development
Can be trusted to work independently
🟢 Key idea: Theory Y supports a positive, empowering management style, while Theory X assumes a controlling, authoritarian approach.
What immediate operational issues arise when new product are developed.
When a company develops and launches a new product, several operational challenges can arise right away. These include:
Compare the manager and the leader. How do they differ?
When a company develops and launches a new product, several operational challenges can arise right away. These include:
Production and Capacity Planning
Can existing facilities handle the new product?
Is new equipment or technology needed?
Supply Chain Management
Sourcing new materials or components
Dealing with lead times, logistics, and supplier reliability
Quality Control
Ensuring consistent quality in early production runs
Training staff on new processes and standards
Inventory Management
Balancing enough stock for launch without overproducing
Managing storage and distribution
Staff Training
Employees may need to learn new skills or processes
Customer service teams need product knowledge
Coordination Between Departments
R&D, marketing, sales, and operations need to work closely
Miscommunication can cause delays or errors
Testing and Troubleshooting
Initial versions may have technical or functional issues
Quick fixes or design adjustments might be needed
Cost Control
Managing budgets while unexpected expenses occur
Avoiding waste in early production stages
What are the strategic issues concernig the supply chain managment?
Supply Chain Management (SCM) isn’t just about day-to-day logistics—it also involves long-term strategic decisions that impact the company’s competitiveness and resilience.
Here are the key strategic issues:
Supplier Selection and Relationships
Choosing the right partners for quality, cost, and reliability
Building long-term, collaborative relationships vs. short-term cost savings
Global Sourcing vs. Local Sourcing
Weighing cost savings from global suppliers against risks like delays, tariffs, or political instability
Considering sustainability and ethical sourcing
Risk Management and Resilience
Preparing for disruptions (e.g. natural disasters, pandemics, geopolitical risks)
Creating flexible supply chains with backup suppliers or local alternatives
Sustainability and Environmental Impact
Meeting regulatory standards and consumer expectations
Reducing carbon footprint, waste, and energy usage across the supply chain
Technology and Digitalization
Investing in systems like ERP, AI, or blockchain to improve visibility and efficiency
Automating processes while managing cybersecurity risks
Inventory Strategy
Deciding between “just-in-time” (low inventory) vs. “just-in-case” (high inventory) approaches
Balancing cost, responsiveness, and risk
Cost Management vs. Service Quality
Finding the right trade-off between reducing costs and maintaining high service levels
Avoiding a race to the bottom that affects customer satisfaction
Ethical and Regulatory Compliance
Ensuring labor laws, trade regulations, and industry standards are met across all regions
Monitoring third-party practices
