Final Exam Flashcards
Business
Any activity that seeks to provide goods and services to others while operating at a profit
Goods
Tangible products
Services
Intangible products
Entreprenuer
A person who risks time and money to start and manage a business
Revenue
Total amount of money a business takes in during a given period by selling goods and services
Profit
Amount of money a business earns above and beyond what it spends for salaries and other expenses
Loss
When a business’s expenses are more than its revenue
Risk
Chance and entrepreneur takes of losing time and money on a business that may not prove profitable
Standard of Living
Amount of goods and services people can buy with the money they have
Quality of Life
General well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide
Stakeholders
All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address
Outsourcing
Contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks
Nonprofit Organizations
An organization whose goals do not include making a personal profit for its owners or organizers
Factors of Production
The resources used to create wealth: land, labor, capital, entreprenuership, and knowledge
Business Environment
The surrounding factors that either help or hinder the development of business
Productivity
The amount of output you generate given the amount of input
E-commerce
The buying and selling of goods over the internet
Database
An electronic storage file for information
Identity Theft
The obtaining of individuals’ personal information, such as Social Security and credit card numbers, for illegal purposes
Empowerment
Given front-line workers the responsibility, authority, training, and equipment they need to respond quickly to customer requests
Demography
The statistical study of the human population with regard to its size, density, and other characteristics such as age, race, gender, and income.
Economics
The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
Macroeconomics
The part of economics study that looks at the operation of a nation’s economy as a whole
Microeconomics
The part of economics study that looks at the behavior of people and organization in particular markets
Resource Development
The study of how to increase resources and to create the conditions and to create the conditions that will make better use of those resources.
Invisible Hand
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits
Capitalism
An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.
State Capitalism
A combination of freer markets and some government control
Supply
Quantity of products that are manufacturers or owners are willing to sell at different prices at a specific time
Demand
Quantity of products that people are willing to buy at different prices at a specific time
Market Price
The price determined by supply and demand
Perfect Competition
Degree of competition which there are many sellers in a market and none is large enough to dictate the price of a product
Monopolistic Competition
Degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different
Oligopoly
Degree of competition in which just a few sellers dominate the market
Monopoly
Degree of competition in which only one seller controls the total supply of a product or service, and sets the price
Socialism
Economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people
Brain Drain
Loss of the best and brightest people to other countries
Comminusm
Economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production
Free-Market Economies
Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows
Command Economies
Economic systems in which the government largely decides what goods and services will be produced , who will get them, and how the economy will grow
Mixed Economies
Economic systems in which some allocation of resources is made by the market and some by the government
Gross Domestic Product (GDP)
Total value of final goods and services produced in a country in a given year
Gross Output (GO)
Measure of total sales volume at all stages of production
Unemployment Rate
Number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks
Inflation
General Rise in the prices of goods and services overtime
Disinflation
Situation in which price increasing are slowing (the inflation rate is declining)
Deflation
Situation in which prices are declining
Stagflation
Situation when the economy is slowing but prices are going up anyhow
Consumer Price Index (CPI)
Monthly statistics that measure the pace of inflation or deflation
Core Inflation
CPI minus food and energy costs
Producer Price Index (PPI)
An index that measures prices at the wholesale level
Business Cycles
The periodic rises and falls that occur in economies overtime
Recession
Two or more consecutive quarters of decline in the GDP
Depression
A severe recession, usually accompanied by deflation
Fiscal Policy
Federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending
National Debt
The sum of government deficits over time
Keynesian Economic Theory
Theory that a government policy of increasing spending could stimulate the economy in a recession
Monetary Policy
Management of the money supply and interest rates by the Federal Reserve
Ethics
Standards of moral behavior, that is, behavior accepted by society as right versus wrong
Compliance-based Ethics Codes
Ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers
Integrity-based Ethics Codes
Ethical standards that define the organization’s guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees
Whisteblowers
Insiders who report illegal or unethical behavior
Corporate Social Responsibility (CSR)
Business’s concern for the welfare of society
Corporate Philanthropy
Dimension of social responsibility that includes charitable
Corporate Social Initiatives
Enhanced forms of corporate philanthropy directly related to the company’s competencies
Corporate Responsibility
Dimension of social responsibility that includes everything from hiring minority workers to making safe products
Corporate Policy
Dimension of social responsibility that refers to the position a firm takes on social and political issues
Insider Trading
Unethical activity in which insiders use private company information to further their own fortunes or their family and friends
Social Audit
Systematic evaluation of an organizations progress toward implementing socially responsible and responsive programs
Sole Proprietorship
A business that is owned, and usually managed, by one person
Partnership
A legal form of business with two or more owners
Corporation
A legal entity with authority to act and have liability apart from its owners
Unlimited Liability
Responsibility of business owners for all of the debts of the business
General Partnership
Partnership in which all owners share in operating the business and in assuming liability for the business’s debts
Limited Partnership
Partnership with one or more general partners and one or more limited partners
General Partner
Owner (partner) who has unlimited liability and is active in managing the firm
Limited Partner
Owner who invests money in the business but does not have any management responsibility or liability for losses beyond the investment
Limited Liability
Responsibility of a business’s owners for losses only up to the amount they invest; limited partners and shareholders (stockholders) have limited liability
Master Limited Partnership
Partnership that looks much like a corporation (in that it acts like a corporation and is traded on stock exchange) but is taxed like a partnership and thus avoids the corporate income tax
Limited Liability Partnership
Partnership that limits partner’s risk of losing their personal assets to only their own assets and omissions of people under their supervision
Conventional (C) Corporation
State-chartered legal entity with authority to act and have liability separate from its owners
S Corporation
Unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
Limited Liability Company
Company similar to an S corporation but without the special eligibility requirements
Merger
Result of two firms forming one company
Acquisition
One company’s purchase of the property and obligations of another company
Vertical Merger
Joining of two companies involved in different stages of related businesses
Horizontal Merger
Joining of two firms in the same industry
Conglomerate Merger
Joining of firms in completely unrelated industries
Leveraged Buyout
Attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing
Franchise Agreement
Arrangement whereby someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory
Franchisor
Company that develops a product concept and sells others the rights to make and sell the products
Franchise
Right to use a specific business’s name and sell its products or services in a given territory
Franchisee
A person who buys a franchise
Cooperative
Business owned and controlled by the people who use it – producers, consumers, or workers with similar needs who pool their resources for mutual gain
Entrepreneurship
Accepting the risk of starting and running a business
Entrepreneurial Team
A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product
Micropreneurs
Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle
Affiliate Marketing
An online marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website
Intrapreneurs
Creative people who work as entrepreneurs within corporations
Enterprise Zones
Specific geographic areas which governments try to attract private business investment by offering lower taxes and other government support
Incubators
Centers that offer new businesses low-cost offices with basic business services
Small Business
A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts
Business Plan
A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s)
Small Business Administration (SBA)
A U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans
Small Business Investment Company (SBIC) Program
A program through which private investment companies licensed by the Small Business Administration lend money to small businesses
Market
People with unsatisfied wants and needs who have both the resources and the willingness to buy
Service Corps of Retired Executives (SCORE)
An SBA office with volunteers from industry, trade, associations, and education who counsel small businesses at no cost (except for expenses)
Management
The process used to accomplish organizational goals through planning, organization, leading, and controlling people and other organizational resources
Vision
An encompassing explanation of why the organization exists and where it’s trying to head
Mission Statement
An outline of the fundamental purposes of an organization
Goals
The broad, long-term accomplishments an organization wishes to obtain
Objectives
Specific, short-term statements detailing how to achieve these organization’s goals
SWOT Analysis
A planning tool used to analyze and organization’s strengths, weaknesses, opportunities, and threats.
Strategic Planning
The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals
Tactical Planning
The process of developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done
Operational Planning
The process of setting work standards and schedules necessary to implement the company’s tactical objectives
Contingency Planning
The process of planning alternative courses of action that may be used if the primary plans don’t achieve the organization’s goals
PMI
Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column
Top Management
The highest level of management, consisting of the president and other key company executives who develop strategic plans
Middle Management
The level of management that includes general, division, and branch and plant managers who are responsible for tactical planning and controlling
Supervisory Management
Managers who are directly responsible for supervising workers and evaluating their daily performances
Technical Skills
Skills that involve the ability to perform tasks in a specific discipline or department
Human Relation Skills
Skills that involve communication and motivation; they enable managers to work through and with people
Conceptual Skills
Skills that involve the ability to picture the organization as a whole and the relationships among its various parts
Staffing
A management function that includes hiring, motivating, and retaining the best people available to accomplish the company’s objectives
Transparency
The presentation of a company’s facts and figures in a way that is clear and apparent to all stakeholders
Autocratic Leadership
Leadership style that involves making managerial decisions without consulting others
Participative (Democratic) Leadership
Leadership style that consists of managers and employees working together to make decisions
Free-Rein Leadership
Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives
Enabling
Giving the workers the education and tools they need to make decisions
External Customers
Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use
Internal Customers
Individuals and units within the firm that receive services from other individuals or units
Human Resource Management
Process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals
Affirmative Action
Employment activities designed to “right past wrongs” by increasing opportunities for minorities and women
Reverse Discrimination
Discrimination against members of a dominate or majority group usually as a result of policies designed to correct previous discrimination against minority or disadvantaged groups
Job Analysis
A study of what employees do who hold various job titles
Recruitment
The set of activities used to obtain a sufficient number of the right employees at the right time
Contingent Workers
Temporary workers
Training and Development
All attempts to improve productivity by increasing an employee’s ability to perform. Training focuses on short-term skills, whereas development focuses on long-term abilities
Orientation
Activity that introduces new employees to the organization; to fellow employees, to their immediate supervisors; and to the policies, practices. .and objectives of the firm
On-The-Job Training
Training at the workplace that lets the employee learn by doing or watching others for a while and then imitating them
Apprentice Programs
Training programs during which a learner works alongside an experienced employee to master the skills and procedures of a craft
Off-The-Job Training
Internal or external training programs away from the workplace that develop any of a variety of skills or foster personal development
Online Training
Training programs in which employees complete classes via the Internet
Vestibule Training
Training done in schools where employees are taught on equipment similar to that used on the job
Job Simulation
The use of equipment that duplicates job conditions and tasks so trainees can learn skills before attempting them on the job
Management Development
Process of training and educating employees to become good managers, and then monitoring the progress of their managerial skills overtime
Networking
Process of establishing and maintaining contacts with key managers in and outside the organization and using the organization and using those contacts to weave strong relationships that serve as informal development systems
Mentor
An experienced employee who supervises, coaches, and guides lower-level employees by introducing them to the right people and generally being their organizational sponsor
Performance Appraisal
Evaluation that measures employee performances against established standards in order to make decisions about promotions, competition, training, or termination
Fringe Benefits
Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation beyond base wages
Cafeteria-Style Fringe Benefits
Fringe benefits plan that allows employee to choose the benefits they want up to a certain dollar amount
Flextime Plan
Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours or complete their assigned tasks
Core Time
In a flextime plan, the period when all employees are expected to be at their job stations
Compressed Workweek
Work schedule that allows an employee to work a full number of hours per week but in fewer days
Job Sharing
An arrangement whereby two part-time employees share one full-time job
Union
An employee organization whose main goal is representing its members in employee - management negotiation of job-related issues
Craft Union
An organization of skilled specialists in a particular craft or trade
Knights of Labor
The first national labor union; formed in 1869
American Federation of Labor (AFL)
An organization of craft unions that championed fundamental labor issues; founded in 1886
Industrial Unions
Labor organizations of unskilled and semiskilled workers in mass-production industries such as automobiles and mining
Congress of Industrial Organizations (CIO)
Union organization of unskilled workers; broke away from the American Federation of Labor in 1935 and rejoined it in 1955
Yellow-Dog Contract
A type of contract that required employees to agree as a condition of employment not to join a union; prohibited by the Norris-LaGuardia Act in 1932
Collective Bargaining
The process whereby union and management representatives form a labor-management agreement, or contract, for workers
Certification
Formal process whereby a union is recognized by the National Labor Relations Board as the bargaining agent for a group of employees
Decertification
Process by which workers take away a union’s right to represent them
Negotiated Labor Management Agreement (labor contract)
Agreement that sells the tone and clarifies the terms under which management and labor agree to function over a period of time
Union Security Clause
Provision in a negotiated labor-management agreement that stipulates that employees who benefit from a union must either officially join or at least pay dues to the union
Closed Shop Agreement
Clause in a labor-management agreement that specified workers had to be members of a union before being hired (was outlawed by the Taft-Hartley Act in 1947)
Union Shop Agreement
Clause in a labor-management agreement that says employees may hire nonunion workers’ employees are not required to join the union but must pay a union fee
Right-to-Work Laws
Legislation that gives workers the right, under an open shop agreement, to join or not to join a union if its present
Open Shop Agreement
Agreement in right-to-work states that gives workers the option to join a union, if one exists in their workplace
Grievance
A charge by employees that management is not abiding by the terms of the negotiated labor-management agreement
Shop Stewards
Union officials who work permanently in an organization and represent employee interests on a daily basis
Bargaining Zone
The range of options between the initial and final offer that each party will consider before negotiations dissolve or reach and impasse
Mediation
The use of a third party, called a mediator, who encourages both sides in a dispute to continue negotiating and often makes suggestions fir resolving the dispute
Arbitration
Agreement to bring in an impartial third party ( a single arbitrator or a panel of arbitrators) to render a binding decision in a labor dispute
Strike
A union strategy in which workers refuse to go to work, the purpose is to further workers’ objectives after an impasse in collective bargaining
Cooling-Off Period
When workers in a critical industry return to their jobs while the union and management continue negotiations
Primary Boycott
When a union encourages both its members and the general public not to buy the products of a firm involved in a labor dispute
Secondary Boycott
An attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott, prohibited by the Taft-Hartley Act
Lockout
An attempt by management to put pressure on unions by temporarily closing the business
Injunction
A court order directing someone to do something or to refrain from doing something
Strikebreakers
Workers hired to do the jobs of striking workers until the labor dispute is dissolved
Givebacks
Concessions made by union members to management; gains from labor negotiations are given back to management to help employees remain competitive and thereby save jobs
Sexual Harassment
Unwelcome sexual advances, request for sexual behaviors, and other conduct (verbal or physical) of a sexual nature that creates a hostile work environment
Initial Public Offering (IPO)
The first public offering of a corporation’s stock
Investment Bankers
Specialists who assist in the issue and sale of new securities
Institutional Investors
Large organizations - such as pension funds, mutual funds, and insurance companies - that invest their own funds or the funds of others
Stock Exchange
An organization whose members can buy and sell (exchange) securities for companies and individual investors
Over-the-Counter (OTC) Market
Exchange that provides a means to trade stocks not listed on the national exchange
NASDAQ
A nationwide electronic system that links dealers across the nation that they can buy and sell securities electronically
Securities and Exchange Commissions (SEC)
The federal agency that has responsibility for regulating the various stock exchanges
Prospectus
A condensed version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors
Stocks
Shares of ownership in a company
Stock Certificate
Evidence of stock ownership that specifies the name of the company, the number of the shares it represents, and the type of stock being issued
Dividends
Part of a firm’s profit that the firm may distribute to stockholders as either cash payments or additional shares of stock
Common Stock
The most basic form of ownership in a firm; it confers voting rights and the right to share in the firm’s profits through dividends, if approved by the firms board of directors
Preferred Stock
Stock that gives its owners preferences in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold
Bond
A corporate certificate indicating that a person has lent money to a firm (or a government)
Maturity Date
Exact date the issuer of a bond must pay the principal to the bondholder
Interest
The payment the issuer of the bond makes to the bondholders for use of the borrowed money
Debenture Bonds
Bonds that are unsecured (i.e., not backed by any collateral such as equipment)
Sinking Fund
A reserve account in which the issuer of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the board
Stockbroker
A registered representative who works as a market intermediary to buy and sell securities for clients
Diversification
buying several different investment alternatives to spread the risk of investing
Capital Gains
The positive difference between the purchase price of a stock and its sale price
Stock Splits
An action by a company the gives stockholders tow or more shares of stock for each one they own
Buying Stock on Margin
Purchasing stocks by borrowing some of the purchase cost from the brokerage firm
Junk Bonds
High-risk, high-interest bonds
Mutual Fund
An organization that buys stocks and bonds and other investments, then sells shares in those securities to the public
Exchange-Traded Funds
Collections of stocks, bonds, and other investments that are traded on exchanges but are traded ore like individual stocks than like mutual funds
Dow Jones Industrial Average (the Dow)
The average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market overtime
Program Trading
Giving instructions to computers to automatically sell if the price of a stock dips to s certain point to avoid potential losses
Marketing
Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
Customer Relationship Management (CRM)
The process of learning as much as possible about customers and doing everything you can to satisfy them - or even exceed their expectations - with goods and services
Marketing Concept
A three-part business philosophy: (1) a customer orientation, (2) a service orientation, (3) and a profit orientation
Marketing Mix
Ingredients that go into a marketing program: product, price, place, and promotion
Marketing Research
Analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions
Secondary Data
Information that has already been compiled by others and published in jounals and books or made available
Primary Data
Data that you gather yourself
Focus Group
Small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues
Environment Scanning
Process of identifying the factors that can affect marketing success
Consumer Market
All the individuals or households that want goods and services for personal consumption use
Business-to-Business
All the individuals and organization that want goods and services to use in producing other goods and services to sell, rent, or supply goods to others
Market Segmentation
The process of dividing the total market into groups whose members have similar charateristics
Target Marketing
Marketing directed toward those groups an organization decides it can serve profitably
Geographic Segmentation
Dividing a market by cities, countries, states, or region
Demographic Segementation
Dividing the market by age, income, and education level
Psychographic Segmentation
Dividing the market using groups’ values, attitudes, and interest
Benefit Segmentation
Dividing the market by determining which benefits of the product to talk about
Volume (or usage) Segmentation
Dividing the market by usage (volume of use)
Niche Marketing
The process of finding small but profitable market segments and designing or finding products for them
One-to-One Marketing
Developing a unique mix of goods and services for each endividual customer
Mass Marketing
Developing products and promotions to please large groups of people
Relationship Marketing
Marketing strategy with the goal of keeping individual customers over time y offering them products that exactly meet their requirements
Executer
Assembles/values your estate
Will
Document, names, guardian for children…etc
401K
Deposit pretax dollars (savings plan)
Roth IRA
no up-front deductions
Tax-Deferred Contributions
Retirement account, no current taxes
Individual Retirement Account (IRA)
Spouse, save income for retirement
Social Security
Disability Insurance Program, Old Age, Survivors
Umbrella Policy
Buy all insurance from one company
Disability Insurance
Pays part of long-term sickness or accident
Annuity
Contract, regular payments for life/fixed period
Variable Life Insurance
Invests cash value of policy in stocks
Whole Life Insurance
Pure Insurance and Savings
Term Insurance
Pure insurance protection a given number of years
Controlling Assets (6)
- Take inventory of financial assets
- Keep track of expenses
- Prepare budget
- Pay off debts
- Start savings plan
- Borrow only to buy assets that increase in value or generate income
