Final Exam Flashcards
What is the difference between revenue and profit?
Revenue it the total amount of income, profit is anything above and beyond expenses
What is the difference between standard of living and quality of life?
SoL is the amount people can buy with the money they have, QoL is the general well being of society (freedoms, health, education, etc.
What is risk, and how is it related to profit?
Higher the risk the higher the potential profit is but also lower chance of success.
People who stand to gain and lose by activities of a business
stakeholder
Contracting with other companies to do some or all of the functions of a business
Outsourcing
Opposite of outsourcing, when foreign companies build goods locally
Insourcing
Name advantages of working for others
Someone else takes the risk while you benefit
What benefits do you lose by being an entrepreneur, and what do you gain?
Freedom to make decisions, and opportunity to make more money but any benefits are provided by you
What are the five factors of production? Which ones seem to be the most important for creating wealth?
- Land/natural recourses
- Labor.
- Capital (machines and goods)
- Entrepreneurship
- Knowledge needed to respond to wants and needs
What are the five elements in the business environment?
- Economic
- Technological
- Competitive
- Social
- Global
What is the difference between macroeconomics and microeconomics?
Macro looks at a nations economy as a whole, micro looks at particular markets, products, and services
What is better for an economy than teaching a man to fish?
Teching a person to start a fish farm and they can feed a village
The process that turns self directed gain into social and economic benefit for all
The invisible hand
Four basic rights under a free market
- Right to own property
- Right to own business and keep profits
- Right to compete
- Right to choose
How do businesspeople know what to produce and in what quanity?
The equilibrium point
How are prices determined?
by the market
Enough sellers that no one controls price and products are similar
Perfect competition
Large number of sellers with similar products that are perceived as different through branding
Monopolistic. examples, T-shirts, sodas
When a few sellers dominate the market with similar products at similar prices
Oligopoly. large manufacturers
When one seller controls supply and demand
Monopoly
An economic system where the government should own most basic business and give profits back to people
Socialism
What are benefits and drawbacks to socialism
It provides social equality, more vacation, and fewer work hours, but brain drain can happen.
What countries still practice Communism
China, North Korea, Vietnam, Laos, and Cuba
Economic systems in which some allocation of resources is made by the market and some by the government.
Mixed economy
Name the three economic indicators and describe how well the United States is doing based on each indicator
Growth Domestic Product
Unemployment
Consumer Price Index
What’s the difference between a recession and a depression?
A recession is two or more quarters of decline in the GDP. A depression is a severe recession normally occopanied by deflation
Raising and lowering taxes and increasing/decreasing gov spending
Fiscal policy
Raising and lowering interest rates and controlling the amount of money in circulation
Monetary policy
Organization responsible for monetary policy
Federal Reserve
What are two of the main arguments favoring the expansion of U.S. businesses into global markets?
No single country is capable of producing everything it needs
Other countries will always need something you make
What is comparative advantage, and what are some examples of this concept at work in the United States
Comparative advantage is selling of goods and services that it produces effieciently to other countries and buying things that it does not. The US has advantages in G&S such as software development, engineering, etc.
amount of exports compared to its imports
Balance of Trade
Selling of Products and services cheaper in foreign countries than domestically
dumping
diffrence of money coming in vs the amount of money leaving a country
Balance of money
Four forces or hurdles that effect global trade
Sociocultural
Economic
Legal
Physical/environmental
The belief that your countries culture is superior
ethnocentricity
How would a low value of the dollar affect U.S. exports
Foreign goods would become more expensive but U.S. made goods would become cheaper
Law that prohibits questionable or dubious payments to foreign governments
Foreign Corrupt Practices Act prohibit?
What is ethics and how does it differ from legality
Standards of morale behavior accepted by society as being right or wrong. Things can be legal but unethical
Questions to ask when facing ethical dilemma
Is it legal
Is it fair
How will I feel about myself
Ethical standards that emphasize preventing unlawful behavior increasing control and punishment
Compliance based ethic codes
Ethical standards that define a organizations guiding values
Integrity based ethical codes
Six steps to establish effective ethical programs
1.Must be adopted and support from the top
2. Employees must understand that it starts at the top and everyone must act accordingly.
3. Managers and others must be trained
4, Must set up an Ethics office
5. All outsiders must be informed of it
6. Must be enforced in a timely manner
What are the parts to a business plan
- Cover letter
- executive summary
- Company background
- Financial Plan
- Capital required
- Marketing plan
- Location Analysis
- Manufacturing plan
- Appendix
Why do some small business not do business globally
Can’t get financing
Don’t understand how to get started and the cultural diffrences
Can get through all the bureacratic paperwork
What are some advantages small businesses have in the global market
- Many places prefer dealing with individuals than corporations
- They can start shipping faster
- can provide more suppliers
- personal service and attention
The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.
Management
What are the four functions of management
- Planning
- Organizing
- Leading
- Controlling
A broad long-term desired outcome
Goal
Short-term statements detailing how to accomplish goals
Objectives
Analysis of Strengths, Weaknesses, Oppurtunities, and Threats
SWOT analysis
Done by top management to determine major goals and how to achieve them
Strategic Planning
Process of eveloping detailed short term statements about what’s going to get done and how
Tactical Planning
Process of setting work standards and schedules to accomplish tactical objectives
Operational Planning
The process of preparing alternative plans
Contingency planning
The six D’s of decision making
- Define the situation
- Describe and collect info
- Develop alternatives
- Decide which alternative is best
- Do what is indicated
- Determine if the decision was good or bad
How do leaders and managers differ
Leaders embrace change and provide vision, managers produce order and stability
Leadership style that involves making managerial decisions without consulting others.
Autocratic Leadership
Leadership style that consists of managers and employees working together to make decisions.
Participative (democratic) leadership
Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.
free-rein leadership
Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests.
Empowerment
What were some of the main principles that Henri Fayol introduced
- Unity of command, workers only report to one boss
- Hierarchy of command, Managers have the right to give orders and have them followed
- Division of Labor, Functions should be divided into areas of specialization
What did Weber say in addition to Fayol
Job Descriptions
Written rules, regs, and policies
Consistent procedures
Staffing and promotion based qualifications
What are the four major choices in structuring an organization
Line, Line and Staff, Matrix, Cross-Functional Self Managed Teams
What are the latest trends in structuring
The internet as made it possible for separate companies to work as closely as two departments in the same firm. This level of Transparency has led to virtual organizations.
The term used to describe all the activities managers do to help their firms create goods.
Production management
A specialized area in management that converts or transforms resources (including human resources) into goods and services.
Operations management
What type of companies use operations management
Goods and services
That part of the production process that physically or chemically changes materials.
Process manufacturing
The part of the production process that puts together components.
Assembly Process
The use of computers in the design of products.
CAD, Computer-aided design
The use of computers in the manufacturing of products.
CAM, Computer-aided manufacturing
Designing machines to do multiple tasks so that they can produce a variety of products.
Flexible Manufacturing
The production of goods using less of everything compared to mass production.
Lean manufacturing
Tailoring products to meet the needs of a large number of individual customers.
Mass Customization
How do robots make manufacturers more competitive
They can work 24 hrs a day and be integrated into systems that allow for mass customization
The “father” of scientific management
Fredrick Taylor
Believed motivation came from needs. Developed the Hierarchy of needs.
Abraham Maslow
What are the 5 levels of Maslows Hierarchy
- Physical
- Safety
- Social
- Esteem
- Self-actualization
What are motivators and what are the top four
job factors that cause employees to be productive and that give them satisfaction.
- Sense of Achievement
- Earned recognition
- Interest
- Opportunity for growth
What is a hygiene factor and what are four of them
job factors that can cause dissatisfaction if missing but that do not necessarily motivate employees if increased.
- Polocies
- Supervision
- Working conditions
- Interpersonal relations
Culture that focuses on relationships and building trust before focusing on task
High context culture
Culture that focuses on the task and see’s relationships as distraction
Low context culture
How will gen-x managers differ from baby boomers
They recognize there is more to life than work and give more recognition
Name some characteristics of millennials
impatient, skeptical, blunt, tech savvy, adaptable
What are the five steps to human resource planning
- Preparing HR inventory of employees
- Preparing Job analysis
- Assessing future human resource demand
- Assessing future labor supply
- Establishing strategic plan
Six steps in selection process for hiring
- Get applications
- Interviews
- Employment test
- Check Background
- Results from physical exams
- Trial period
Workers who do not have the expectation of regular, full-time employment.
Contingent workers
Why are there more contingent workers today
- Workers want more flexibility in their roles
2. employers need task completed, not employees
Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours.
flextime plan
Work schedule that allows an employee to work a full number of hours per week but in fewer days.
Compressed workweek
A union strategy in which workers refuse to go to work; the purpose is to further workers’ objectives after an impasse in collective bargaining.
Strike
When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute
Primary Boycott
An attempt by labor to convince others to stop doing business with a firm that’s the subject of a primary boycott; prohibited by the Taft-Hartley Act.
Secondary Boycott
An attempt by management to put pressure on unions by temporarily closing the business.
Lockout
A court order directing someone to do something or to refrain from doing something.
injunction
What will unions have to do to recover
Break into more white collar, female, and foreign worker jobs while expanding into other job markets.
How does pay equity differ from equal pay for equal work?
It goes beyond by saying that their should be equal pay for jobs that require similar education, training, or skills.
Unwelcome sexual advances, requests for sexual favors, and other conduct (verbal or physical) of a sexual nature that creates a hostile work environment.
Sexual Harassment
Conduct on the job becomes illegal when
- When submission to conduct is a term of employment, or affects decisions
- Conduct interferes with job performance or creates a hostile work environment
What are issues and solutions to childcare
- Absence related to child care
- Who should pay for employee childcare
Many companies are offering it as a benefit
What are the four P’s of Marketing
- Product
- Place
- Price
- Promotion
What are the steps in Marketing Research Process
- Defining the question
- Collecting research data
- Analyzing
- Choosing the best Solution
Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements.
Relationship marketing
Developing products and promotions to please large groups of people.
Mass Marketing
5 ways the market is segmented
- Geographic Segmentation
- Demographic Segmentation
- Psychographic Segmentation
- Benefit segmentation
- Volume segmentation
5 things that effect buyers decision process
- Learning process
- Reference group
- Culture
- Subculture
- Cognitive dissonance
Seven functions of packaging
- Attract attention
- Protect the goods
- Describe content
- Explain benefits
- info on warranties
- Easy to open
- price, uses
A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.
Brand
A brand that has exclusive legal protection for both its brand name and its design.
Trademark
A word, letter, or group of words or letters that differentiates one seller’s goods and services from competitors
Brand Name
A manager who has direct responsibility for one brand or one product line; called a product manager in some firms.
Brand manager
A theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline.
Product Life cycle
Distribution that puts products into as many retail outlets as possible.
Intensive Distribution
The techniques sellers use to motivate buyers
Promotion
Four parts of promotional mix
- Personal selling
- Advertising
- PR
- Sales Promotions
The face-to-face presentation and promotion of goods and services.
Personal selling
Threes steps to PR program
Listen to public
Change
Tell them you changed
The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions.
Accounting
Financial statement that reports a firm’s financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners’ equity.
Balance Sheet
3 parts to balance sheet
Assests
Liabilities
Owner equity
The financial statement that shows a firm’s profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, expenses, and the resulting net income or net loss.
Income statement
Financial statement that reports cash receipts and disbursements related to a firm’s three major activities: operations, investments, and financing.
statement of cash flows
Three reasons firms fail
Undercapitalized
Poor cash flow control
Inadequate expense control
Managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm.
Finance managers
Three budgets in finance plan
capital
cash
operating
An organization whose members can buy and sell (exchange) securities for companies and investors.
stock exchanges
Thee stock exchanges are
NYSE
NASDAQ
OTC
Federal agency that has responsibility for regulating the various exchanges.
SEC
The average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time.
Dow Jones Average
Five qualities of good money
Portable Stable Divisible unique Durable
What three agencies ensure money
Federal Deposit Insurance corporation
Savings Association Insurance Fund
National Credit Union Administration
State and federal constitutions, legislative enactments, treaties of the federal government, and ordinances—in short, written law.
statutory law
The body of law that comes from decisions handed down by judges; also referred to as unwritten law.
Common Law
Federal or state institutions and other government organizations created by Congress or state legislatures with delegated power to pass rules and regulations within their mandated area of authority.
administrative agencies
A wrongful act that causes injury to another person’s body, property, or reputation.
tort
