Final - Ch 2,6,7,8,17,18,19

Question 1

What are the three primary components of business ethics?

Answer 1

A) competing fairly and honestly:

• obey all laws and regulations
• refrain from knowingly deceiving, misrepresenting, or intimidating others

B) avoiding conflicts of interest:

• conflict of interest- occurs when a businessperson takes advantage of a situation for their own personal interest rather than for the employers interest.
• No bribes
• Don’t take credit for others ideas or work
• Not meeting one’s commitment and mutual agreements
• Pressuring others to behave unethically

C) being transparent:

• Transparency- the free flow of information inside and outside the company
• Can discourage the temptations compete unfairly
• Make information public
• Make sure you are not misleading with commercials
• Do not conceal controversial issues
• Having a third party inspectors audit suppliers, companies can have urgent concerns, create a plan for improvement or switch suppliers.
• Social responsibility audits- comprehensive report of what an organization is doing in regard to social issues that affect it

Question 2

2. What are the factors that affect the level of ethical behaviour in an organization?

Answer 2

A) individual factors: knowledge of an issue, personal values and goals

B) social factors: the law, cultural norms

C) opportunities: competitive environment, level of supervision, enforcement

Question 3

3. What are four ways companies can promote ethical behavior?

Answer 3

A) demonstrate commitment from leadership: top management demonstrates support through consistent policies and leading by example.

B) adopt a code of ethics: A written guide to acceptable and ethical behaviour as defined by an organization. Employees know what is expected of them and what will happen if they violate the rules.

C) designate an ethics officer: gives employees someone to consult if they’re not sure of the right thing to do.

D) protect whistleblowers: provides safe and confidential options for employees to report unethical behaviour, such as anonymous hotlines.

Question 4

4. To make ethical decisions what guidelines should managers follow?

Answer 4

A) listen and learn: Listen to interview until you understand the problem or the opportunity confronting your organization.

B) identify the ethical issues: seven how the situation affects you, your coworkers, and other stakeholders. Attempt to understand the viewpoints of all those involved in the decision or his consequences.

C) analyze the options: Put emotion aside and consider several alternatives before developing analysis. Ask others for ideas about the best long-term results.

D) identify the best option: tested against established criteria such as respect, understanding, caring, fairness, honesty and openness.

E) explain your decision and resolve differences: seek neutral arbitration for my trusted manager or take time to reconsider, consult or exchange written proposals.

Question 5

whistleblower

Answer 5

an employee who exposes reports practises within the organization.

Question 6

Economic model of social responsibility

Answer 6

The view that society will benefit most on business is left alone to produce and market profitable products that society needs.

• Business managers are responsible primarily to shareholders, so management must be concerned with providing a return on investment.
• Corporate time, money, and talent should be used to maximize Profits, not to sell societies problems.
• Social problems affect society in general, so individual businesses should not be expected to solve these problems.

Question 7

Socioeconomic model of social responsibility

Answer 7

The concept of business should emphasize not only profits but also the impact of its decision on society.

• because business is a part of our society, you cannot ignore social issues.
• Business has the technical, financial, and managerial resources needed to tackle today’s complex social issues.
• Helping resolve social issues, business can you create a more stable environment for long-term profitability.
• Socially responsible decisions making by businesses can prevent increased government intervention, which would force businesses to do what they feel to do voluntarily.

Question 8

What’s the various types of stakeholders of an organization.

Answer 8

Stakeholders- anyone who is impacted by the activities of the business.

Investors:
They invest money in the company.
Issues that impact them- Level of profits, public perception of company.

Employees:
They commit the time and energy to the company. Issues that impact them- Number of jobs, job pay, security, safety.

Customers:
They purchase a company’s products. Issues that impact them- quality, price.

Consumers:
They use the company’s products.
Issues that impact them- quality.

Local community:
They are impacted by the company’s presence in the community. Issues that impact them- economic impact on community, social and environmental impact on community.

Government:
They collect tax revenue from the company and also enforce regulations. Issues that impact them- tax receipts, cost of social benefits for unemployed.

Question 9

What are the four basic consumer rights?

Answer 9

A) the right to safety:
The product they purchased must be safe for their intended use, must include thorough and explicit directions for proper use, and must be tested by the manufacturer to ensure product quality and reliability.

B) the right to be informed:
Consumers must have access to complete information about a product before they buy it.

C) the right to choose:
Consumers must have a choice of products, offered by different manufacturers and sellers, to satisfy a particular need.

D) the right to be heard:
Means that someone will listen and take appropriate action when customers complain.

Question 10

Yeah Define sustainability. What are some of those different sustainability strategies used in business?

Answer 10

Sustainability- protecting the natural environment to ensure survival for present and future generations.

Strategies:
Product design-
- Reduce use of hazardous materials.
- Reduce packaging materials.
- Design goods for reduce energy consumption during production and consumer use.
- Design services delivery to maximize efficiency.
Facility and vehicle improvements-
- Energy efficiency campaigns.
- Use of alternative energy to power facilities and vehicles.
- Strategies to reduce or recycle waste from facility.
Community outreach-
- recycling campaigns.
- Promotion of environmentally sustainable or energy-efficient alternatives.
- Contribution to environmental cleanup and restoration efforts.

Benefits:

• Less environmental contamination (less pollution)
• Less waste.
• Lower energy consumption.
• Environmental restoration.

Question 11

green marketing

Answer 11

The process of creating, making, delivering and promoting products that are environmentally safe.
May include making modifications to products, manufacturing processes, packaging, and/or promotion activities to make or deliver products that are better for the environment.

Question 12

Ethics

Answer 12

The study of right and wrong end of the morality of choices individuals make. An ethical decision or action is one that is right according to some standard of behavior.

Question 13

Business ethics

Answer 13

The application of moral standards to business situations.

Question 14

Social responsibility audits-

Answer 14

Comprehensive reports of what an organization is doing in regard to social issues that affect it.

Question 15

Ethical dilemmas-

Answer 15

Decisions for every alternative impacts various stakeholders in unpleasant ways.

Question 16

Social responsibility-

Answer 16

The recognition of business activities have an impact on society and the consideration of that impact in business decision making.

Question 17

Caveat emptor-

Answer 17

Latin phrase meaning “let the buyer beware”

Question 18

4 functions of management:

Answer 18

Planning
Organizing
Leading and motivating
Control

Question 19

Planning -

Answer 19

establishing organizational goals and deciding how to accomplish them.

Vision statement- a clear and concise outline of an organization’s values and goals that it would like achieve.

Strategic planning- broad Guide for major policy setting. Designed to achieve long-term goals. Set by Board of Directors and top management.

Tactile- Smaller scale plan to implement strategic plan. may be updated periodically. easier to change the strategic plan.

Operational- designed to implement tactile plans. Plan is one year or less. Deals with how to accomplish specific objectives.

Contingency- outline of alternative courses of action if other plans are disrupted or non-affective. Used in conjunction with strategic, tactile, and operational plans.

Organizing - grouping resources and activities accomplish some end result in an efficient and effective manner.

Question 20

Leading and motivating -

Answer 20

Leading- The process of guiding others toward the achievement of organizational goals

motivating- providing reasons for people to work in the best interests of an organization

directing- The combined process of leading and motivating

The style and tactics managers use to influence their team toward a common goal is the essence of leadership. People have different motivations. A managers job is to determine what factors motivate workers and to provide proper incentives to encourage affective performance.

Question 21

Controlling -

Answer 21

The process of evaluating in regulating ongoing activities to ensure that goals are achieved.

1st step- set standards with which performance can be compared.

2nd- measuring actual performance and comparing it to the standard.

3rd- taking corrective action as necessary.

Repeat periodically until goal is achieved.

Question 22

SWOT

Answer 22

S- strengths: internal capabilities and core competencies that give the company advantage over its competitors. Strengths are positive for the company. Ex. Cost vantages, proven management, efficient distribution channels.

W- weaknesses: internal limitations a company faces in developing or implementing plans. Weaknesses are potentially negative for the company. Ex. High turnover, labour grievances, lack of managerial depth.

O- opportunities: external conditions in the business environment that could produce rewards for the company if properly pursued. Opportunities are potentially positive for the company. Ex. Increased demand for new products, potential strategic alliances, competitor complacency.

T- threats: external conditions or barriers in the business environment that could prevent the company from reaching its objectives. Threats are potentially negative for the company. Ex. Entry of lower cost competitors, rising sales of substitute products, slowing market growth.

Question 23

How are managers classified?

Answer 23

• according to their level within the organization

- According to their area of management

Question 24

Different levels of management?

Answer 24

Top manager- an upper level executive who guides and controls an organization’s overall fortunes. Ex. CEO.

Middle manager- a manager who implements the strategy and major policies developed by top management. Ex. Department head, marketing manager.

Frontline manager- a manager who coordinates and supervises the activities of operating employees (those with no employees reporting to them). Ex. Supervisor, team manager.

Question 25

3 key skills a manager must have?

Answer 25

Conceptual skills- The ability to see the big picture and understand how the various parts of an organization or idea can fit together.

Technically skills- specific skills needed to accomplish a specialized activity.

Interpersonal skills- do you like effectively with other people both inside and outside and organization; examples include the ability to relate to people, understand their needs and motives, and showed genuine compassion.

Question 26

What is leadership?

Answer 26

Leadership- the relationship between a leader and the followers who want real changes, resulting in outcomes that reflect their shared purposes.
Managers job is to plan, organize and control while directing employees to do what was asked.
The leaders job is to inspire and motivate.

Question 27

3 primary styles of leadership.

Answer 27

Autocratic- very task oriented. Decisions are made confidently, with little concerned about employee opinions. Employees are told exactly what is expected and given specific guidelines, rules, and regulations.

Participative- Consult workers before making decisions, helping workers understand which goals are important and fostering a sense of ownership and commitment to reach those goals.

Laissez faire- hands off approach. Provide the basic vision and necessary resources for the team, then mainly act as an advisor.

Question 28

4 steps in managerial decision making?

Answer 28

Identifying the problem or opportunity.

Generating alternatives.

Selecting an alternative.

Implementing and evaluating the solution.

Question 29

organization design

Answer 29

an organizational structure that results from decisions regarding job design, departmentalization, centralization of authority, and span of management.

Question 30

What are four common objectives a company evaluate when building its organization?

Answer 30

Efficiency- the ability to complete a task using minimum amount of resources.

Control- the ability to make decisions and specify how those decisions will be carried out.

Responsiveness- the speed at which an organization can improve its products in response to customer feedback, employee suggestions, or competitive pressures.

Empowerment- the degree to which employees can make decisions on their own.

Question 31

Job design, specialization, job rotation

Answer 31

Job design- Structuring the tasks and activities required to accomplish a businesses objectives into specific jobs so as to foster productivity and employee satisfaction. Job design influences in organizations performance and affects other decisions about how to design the organization.

Job specialization- The separation of all organizational activities into distinct tasks and the assignment of different tasks to different people.

Job rotation- Systemic shifting of employees from one job to another. Provides a variety of tasks of the workers are less likely to become bored and dissatisfied. Also helps to avoid repetitive use injury‘s that are sometimes an issue in a highly specialized production environments.

Question 32

Departmentalization- The process of grouping jobs into manageable units.
Grouping by:

Answer 32

Function- employees who perform the same organizational activity are grouped. All marketing employees are grouped together in the marketing department, all production employees in the production department and so on. Supervision is simplified because everyone is involved in the same activities, which makes coordination easy.

Product- Groups employees who work with a particular good or service sold by the business. Each department handles his own marketing, production, financial management, and human resources activities. Makes decision making easier and can improve responsiveness to market needs.

Location- Groups employees according to the geographic area they serve. Improves responsiveness to the unique demands or requirements of different locations.

Customer- Groups and pose according to the needs of various customer populations. A local car dealership may have one sale stuff to deal with individual consumers, and a different sales staff to work with corporate fleet buyers. Allows the business to deal effectively with unique customer groups.

Question 33

Centralized v Decentralized organization. Which is more empowering? Efficient?

Answer 33

Centralized organization- an organization that systemicallyWorks to concentrate authority at the upper levels of the organization.

Decentralized organization- and organization or management consciously attempts to spread authority widely in the lower levels of the organization.

Decentralized organizations are more empowering because they are usually more innovative and responsive to customer needs, because managers throughout the organization have the ability to respond to customer feedback and employee input to make improvements.

Centralization leads to greater management control because top management makes most of the decisions. It also leads to greater efficiency because fewer people are consulted before decisions are made.

Question 34

Span of management, wide, narrow

Answer 34

Span of management- the number of workers who report directly to one manager.

Wide span:
Advantages- more efficiency and more empowerment.
Disadvantages- less management control and less interaction with management.

Narrow span:
Advantages- more management control and more interaction with management.
Disadvantages- higher cost and less empowerment.

Question 35

What are the three basic forms of organizational structure?

Answer 35

Line structure- The chain of command goes directly from person to person throughout the organization. Offers clear lines of communication in past decision making but can cause managers to feel isolated and lack of resources they need to achieve company goals.

Line and staff structure- includes both line and staff positions. Provides line managers specialized managerial support but can sometimes create conflicts between the two types of managers

Matrix structure- individuals work on teams and all areas are represented so that the lifting objectives can be balanced and overall goals, rather than individual ones, become the priority. Can lead to increased flexibility, collaboration, and innovation, but result in employees having two supervisors.

Question 36

Corporate culture

Answer 36

The inner customs, traditions, and values of an organization. Has a powerful influence on how employees think and act.

Question 37

Production

Answer 37

the conversion of ideas and resources into useful good and services.

Question 38

what are the three steps involved in this process?

Answer 38

1. Design planning. considers the strategic goals and resources of an organization to determine the best production methods.
2. Facilities planning. Identifies a site where the good or service can be produced.
3. Operational planning. Decides on the amount of goods or services that will be produced within a specific time period.

Question 39

What are the key differences between the production of goods and services?

Answer 39

Good- physical, tangible product that we can see and touch.

• Production requires labour and materials to create a finished product.
• There is a delayed consumption. Goods are manufactured, shipped, stored, broad, and then used by consumers.
• Quality is measured by the number of rejects or customer returns.

Service- and intangible product that we experience or use.

• Production of services is more labour-intensive because people are the most utilized resource.
• Services are immediately enjoyed or consumed by the consumer.
• Quality is measured by the number of satisfied customers.

Question 40

Research and development

Answer 40

involves a set of activities intended to identify new ideas that have potential to result in new goods and services.

Question 41

What are the major decisions involved in design planning?

Answer 41

• Design a product line
• Estimate production capacity
• Evaluate production technology options

Question 42

What is the trade off involved in making decisions about the use of automation in production?

Answer 42

• High initial costs and low operating costs (for automation)
• Low initial costs and high operating costs (for human labour)

Question 43

What are the four variables to consider when selecting facility layout?

Answer 43

• Proximity to major customers. Some products are light and small enough to be shipped easily around the world, but not all products are small, such as automobiles. They are expensive to ship, which is why it is common for car manufacturers to build factories near major markets.
• Availability and cost of labour. Cost of labour in China is lower, which is why most people produce there.
• Cost of construction and operation. Includes the cost of land, availability of construction materials, taxes, environmental regulations, and other costs that could affect the profitability of the operation.
• Access to key resources. Companies may locate near transportation infrastructure, such as Ocean sports or railroads, or I could be certain types of natural resources, such as lumber or cold.

Question 44

What are the three types of layouts available and when should each be used?

Answer 44

• Process layout. Separate stations for distinct tasks. Products move through in any sequence. Used in different operations are required for creating small batches of different products or working on different parts of a product. Each operation is performed in its own particular area.
• Product layout. Also called assembly line. All products undergo same operation in same sequence. For high volume, standardized production runs. For low volume, customized products. Sometimes called Assembly line. Used when all products undergo the same operations in the same sequence.
• Fixed position layout. Products usually remain stationary. People and machines move around as needed to assemble the product. Used for producing large products. The product remain stationary, and people and machines are moved as needed to assemble the product.

Question 45

Supply chain management

Answer 45

The coordination of members of the supply channel, with the goal of reducing inefficiencies, costs, and redundancies.

Question 46

What are the key goals of supply chain management?

Answer 46

• reducing production lead times,
• minimizing invention inventory costs
• keeping customers happy by providing the products they want, when they want them.

Question 47

Why is scheduling an important part of operational planning?

Answer 47

Because the right materials and resources are needed to ensure a smooth production process. Production and operation managers are responsible for making sure that machines, materials, and people are scheduled to be in the right place, at the right time so that production can run smoothly.

Question 48

What are some tools available to assist with scheduling?

Answer 48

• PERT ( program evaluation and review technique) charts. Graphic representations of the PERT technique for scheduling a complex project and maintaining control of the schedule.
• Gnatt charts. Graphic scheduling device that displays the tasks to be performed on the vertical axis and the time required for each task on the horizontal axis.

Question 49

Quality control

Answer 49

The process of ensuring that goods and services are produced in accordance with design specifications.

Question 50

Discuss programs available to assist businesses with improvement in quality.

Answer 50

• total quality management TQM: is the coordination of efforts directed at:
• Continuous quality improvement through the ongoing creation of quality improvement initiatives and projects.
• Improving customer satisfaction with higher quality products and more responsive methods of customer feedback.
• Increasing employee participation in decision-making, policymaking, and process design.
• Strengthening supplier partnerships to increased communication and tighter integration of operations.
• statistical process control and six sigma: these methods entail a disciplined approach that relies on statistical data and improved methods to illuminate defects.
• ISO certification: The international organization for standardization certifies that companies need a set of standards for quality control procedures, production processes, and product testing.

Question 51

1. Whether you are a decision maker inside or outside in organization, you need to understand accounting. Explain why.

Answer 51

• Because people such as investors, managers and creditors must also be able to make smart and profitable decisions.
• If you are external to an organization you get financial information from accounting reports (income statements, the balance sheet, and cash flow statement). You must be able to analyze it to make proper decisions.

Question 52

2. What are the two broad categories accounting is broken into? Explain each.

Answer 52

Financial- provide information for people outside an organization. To make decisions on lending, investing or otherwise partnering with the company.

• how fast is the company growing?
• How much is the company worth?
• Can the company pays bills?
• How is the company performing compared with other in its industry?

Managerial- provides information for managers within an organization to make decisions about a companies financing, investing, marketing, and operating activities.

• what are the most profitable products?
• How much have we spent on marketing this year?
• Do we need to borrow money to open more stores?
• How much and what types of inventory do we have on hand?

Question 53

3. What is the purpose of the international financial reporting standards (IFRS)?

Answer 53

IRFS - A set of globally excepted accounting standards adopted in Canada on January 1, 2011, for public companies and those private companies that used to adopt them.
To provide consistency in financial reporting internationally and replace the Generally Accepted Accounting Principles (GAAP).

Question 54

4. What are the three financial statements that provide the basis for financial analysis? What information do these reports provide?

Answer 54

The balance sheet- A financial statement that provides a snapshot of a company‘s financial position by stating assets, liabilities, and owners equity.

The income statement- if financial statement provides a summary of how much a company earned over a period of time; summarizes revenue, expenses, and net income or loss.

The statement of cash flows- if I natural statement that illustrates how the companies operating, investing, and financing activities affect cash over a period of time.

Question 55

5. What is included on the balance sheet (statement of financial position)? How are these items related?

Answer 55

It includes assets, liabilities,and owner’s equity.

Assets- liability= owner’s equity

Question 56

6. What does liquidity represent?

Answer 56

Liquidity refers to the east and with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets while tangible items are less liquid

Question 57

7. What is the difference between current liabilities and long-term liabilities?

Answer 57

Current liabilities- are debts that will be repaid in one year or less.

Long-term liabilities- are debts that don’t need to be repaid for at least one year.

Question 58

8. How do you calculate a company’s net income (or loss) using the items on the income statement?

Answer 58

Revenue - cost of goods sold (COGS)
= gross profit

Gross profit - operating expenses
= net income from operations

Net income from operations - taxes and interest
= net income (or loss)

Question 59

What is the purpose of the statement of cash flow‘s?

Answer 59

Provides some insight into the timing of the investment and financing activities over a period of time along with cash flow is generated from the company’s primary operating activity, selling products or providing services to customers.

Question 60

10. What is a financial ratio? Provide three examples of financial ratios and explain each.

Answer 60

A financial ratio is a number that shows the relationship between two elements of a company’s financial statements. Financial ratios are used to measure different aspects of a company’s performance.

1. Profitability ratios:
   Tells you how good the company is at generating revenue and controlling its costs.
   Net incomes/revenue = return on sales

Higher ratio indicates better. Profit margins.

2. Liquidity ratios:
   Tells you the company‘s ability to meet short-term obligations.

Current assets/current liabilities = current ratio

Higher ratio indicates a company can more easily pay short term debt obligations.

The ratio varies greatly by industry

3. Leverage ratios:
   Tells you how much of the company is financed using debt.

Total liabilities/total owner’s equity = debt-to-equity ratio

A ratio over one indicates the company has more debt than equity.

Higher ratios indicate higher levels of debt, which can post risk for lenders and shareholders.

Question 61

What is money?

Answer 61

Anything a society uses to purchase products or resources.

Question 62

What are the 3 functions can a form of money serve?

Answer 62

Money is a medium of exchange.

Money is a measure of value. The prices of all products and services are stated in terms of money. You can compare it to itself.

Money is a store of value. You can save it and use it whenever you want. You are not obligated to use it immediately.

Question 63

What are the 3 main components of Canada’s money supply?

Answer 63

Currency - bank notes and coins used as a medium of exchange

Demand deposits - money stored in cheating accounts that depositors can withdraw on demand

Time deposits - money invested for a specific time

Question 64

Differentiate among m1, m2, and m3.

Answer 64

M1 - the narrowest measure. Consists of currency and chewing accounts.

M2 - is a broader measure that includes not only M1 but also personal savings accounts, other cheating accounts, TERM DEPOSITS, and non personal deposits that require notice before the money can be withdrawn.

M3 - is also a broad measure that includes M2 plus Canadian residents foreign currency deposits and non personal deposits (corporate, not for profit).

Question 65

What are the benefits of growth in money supply?

Answer 65

a healthy amount of money for customers to spend on goods and services
- Steady economic growth and resonance, predictable increases in prices (and incomes) overtime.

Question 66

What is a potential result of a fast growth in money supply?

Answer 66

• a surplus of money for customers to spend on goods and services.
• Rapid increase in prices due to oversupply of money compared to the amount of food and services.

Question 67

What is the role of the bank of Canada?

Answer 67

• Responsible for regulating money supply
• Promotes the economic and financial welfare of Canada through:
• Conducting monetary policy in a way that fosters confidence in the value of money.
• Supplying quality bank notes that are readily acceptable and secure against counterfeiting.
• Promoting safety and efficiency of Canada’s financial system.
• Providing efficient and effective funds management services.
• Communicating their objectives openly and effectively and standing accountable for their actions.

Question 68

Bank rate

Answer 68

the rate of discount set by a central bank

Question 69

Target for the overnight rate

Answer 69

The signal to the major participants in the money market as to what the bank of Canada is aiming for when participants borrow and lend one-day funds to each other

Question 70

What are the two broad groups that financial institutions are categorized into?

Answer 70

Open market operations - The purchase or sale of Canadian government securities by the Bank of Canada to stimulate or slow down the economy. Long term loans made by businesses and individuals to the government. Banks have more money to lend so they reduce interest rates, and lower rates generally stimulate economic activity.

Overnight rate - the interest rate that our major financial institutions borrow from each other “overnight”. Changes to the target for the overnight rate will influence other rates such as interest rates, the prime rate, mortgage rates, exchange rates, and so on.

Question 71

What is the most important regulatory body in Canada’s banking system?

Answer 71

Office of the superintendent of financial institutions (OSFI) - an independent agency of the government of Canada that regulates federally registered banks, insurers, and trust and loan companies as well as credit unions, fraternal benefits societies, and benefit societies, and private pension plans.

Question 72

What are OSFI primary responsibilities?

Answer 72

Secure place to store your valuables and money.

• Convenient access to your money
• Access to loans
• Business and international services, ex. Business deposit accounts, business loans, point-of-sale terminals, currency exchange, letters of credit.

Question 73

How has the financial services industry evolved over time?

Answer 73

• In addition to the traditional interest rate spread, they also make money by charging fees for everything from loan origination, for additional services, and from bundling loans for sale to third parties.
• Banks now offer a variety of non-traditional banking services, such as investments and insurance.
• Traditional banking functions such as chewing accounts and home loans are now offered by a variety of non-banking institutions.