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Bachelor Exam > Introduction to BA > Flashcards

Introduction to BA Flashcards

1
Q

What is a domestic business environment?

A

= environment in which firm conducts its operations and gets its revenues (e.g. customers, suppliers, competitors, etc)

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2
Q

What are the 6 dimensions of the external environment of a business?

A
  1. Economic environment (conditions in current economic system)
  2. Political-Legal environment (relationship between business & government)
  3. Sociocultural environment (customs, values, demographics)
  4. Technological environment (equipment, human knowledge, telecommunications)
  5. Domestic business environment
  6. Global business environment
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3
Q

What is a global business environment?

A

= international forces that affect a business (e.g. trade agreements, international economic conditions, political unrest, etc)

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4
Q

What are the traditional 4 factors of production and what is the 5th one that many economists include nowadays?

A

5 –> Information Resources

Labor, Capital, Entrepreneurs & Physical Resources

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5
Q

What is the key difference between a planned economy, a market economy and a mixed market economy?

A

planned –> fully controlled by governments

market –> regulated through supply & demand, exchange between buyer & seller, relies on capitalism and free enterprise

mixed market –> features characteristics of planned and market economy (most countries)

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6
Q

What does Communism refer to?

A

political system in which the governments owns and operates all factors of production –> government would assign people to jobs and would own all business decisions (North Korea, Vietnam, Laos, Cuba)

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7
Q

What does Privatization mean?

A

converting government enterprises into privately owned enterprises

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8
Q

What does Socialism refer to?

A

planned economic system in which government owns and operates only selected major industries (e.g. banking, transportation, oil, etc)

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9
Q

What are the law of demand and the law of supply?

A

Law of demand –> Buyers will buy more if price is low and buy less if price is high

Law of supply –> Sellers will sell more if price is high and sell less if price is low

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10
Q

What is the Equilibrium?

A

Profit-Maximizing Quantity, where supply & demand curve meet

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11
Q

What do the expressions “Surplus” and “Shortage” refer to?

A

Surplus = quantity supplied exceeds quantity demanded

Shortage = quantity demanded exceeds quantity supplid

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12
Q

What are the four elements of a private enterprise system?

A
  • Profits
  • Competition
  • Freedom of Choice (being able to choose where to buy, who to work for,…)
  • Private Property Rights (ownership rights of resources)
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13
Q

What are the 4 degrees of competition?

A
  • Perfect Competition (many competitors, easy entry, identical goods, no level of control, e.g. local farmer)
  • Monopolistic Competition (many, but fewer competitors, quite easy entry, similar goods, some control, e.g. stationary store)
  • Oligopoly (few competitors, difficult entry, similar to different goods, some control, e.g. steel industry)
  • Monopoly (no competitors, regulated by government, no competitors, considerable control, e.g. public utility)
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14
Q

What is a business cycle and how does it measure growth?

A

= pattern of short-term ups and downs in an economy

–> measured through aggregate output (total quantity of goods and services produced by an economic system during a given period)

–> increase of aggregate output = growth

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15
Q

What is the difference between GDP and GNP?

Bonus: What is real GDP?

A

GDP –> output needs to be produced domestically

GNP –> output of factories outside the country that belong to a domestic country are included as well

real GDP = adjusted to currency values and price changes (inflation)

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16
Q

What is the difference between fiscal and monetary policies?

A

Fiscal = manage the collection and spending of revenues through tax rates for example

Monetary = controlling the size of the nation’s money supply (through Federal Reserve System)

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17
Q

What does Consumerism refer to?

A

= social activism dedicated to protecting the rights of consumers in their dealings with businesses

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18
Q

What is the difference between Obstructionist -, Defensive-, Accommodative- and Proactive Stance?

A

Obstructionist Stance = approach to social responsibility that involves doing as little as possible (may even involve denying or covering up violations)

Defensive Stance = company meets only minimum legal requirements in SR commitment

Accomodative Stance = exceeds minimum legal requirements

Proactive Stance = actively seeks opportunities to contribute to well-being

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19
Q

How can Entrepreneurship be defined?

A

process of seeking business opportunities under conditions of risk

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20
Q

What is a Venture Capital Company?

A

Group of small investors who invest money in companies with rapid growth potential

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21
Q

What are some key differences between a sole proprietorship, a general partnership and a corporation?

A

Sole Proprietorship –> + freedom + easy to form + low start-up costs + tax benefits
- unlimited liability - managerial & financial limits - hard to expand

Partnership –> owned by more than 1 person
1. general partnership: unlimited liability & ends with death/decision of any partner
2. limited partnership: limited partners can only lose what they invested & have no active role…LP needs at least one general partner
3. master limited partnership: firm sells shares on public market, but master partner retains at least 50%

Corporations –> limited liability, legal life independent of founders, easy to raise money, heavily regulated, double taxation
–> master

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22
Q

What is the difference between a strategic alliance and a joint venture?

A

Strategic Alliance –> multiple organizations collaborate on a project for mutual gain

Joint Venture –> when partner share ownership of what is essentially a new enterprise

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23
Q

What do the terms Balance of Trade, Trade Deficit and Trade Surplus mean?

A

Balance of Trade = exports - imports

Trade Deficit = exports < imports

Trade Surplus = exports > imports

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24
Q

What do the terms Outsourcing and Offshoring mean?

A

Outsourcing = delegating certain business activities to an external provider

Offshoring = outsourcing to a foreign country

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25
Q

What are Hofstede’s 5 Dimensions?

Hint: 5 PUGST

A

Power Orientation (Respect vs Tolerance)
Uncertainty Orientation (Acceptance vs Avoidance)
Goal Orientation (Aggressive vs Passive )
Social Orientation (Individualism vs Collectivism)
Time Orientation (Long-term vs Short-term)

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26
Q

What is the difference between quotas, embargos and tariffs?

A

Quota = restriction on the number of products of a certain type that can be imported into a country

Embargo = government order banning exportation/importation of a certain product or all products from a particular country

Tariff = tax on certain imported products

27
Q

What are the five most fundamental management skills?

A
  • Technical Skills
  • Human Relation Skills
  • Conceptual Skills
  • Decision-Making Skills
  • Time-Management Skills
28
Q

What are the 3 steps that need to be taken for a strategy formulation?

A
  1. Set strategic goals
  2. Analyze the organization & its environment
  3. Match the organization & its environment
29
Q

What does Contingency Planning refer to?

A

Identify aspects of a business or its environment that might change/differ from expectations and plan ahead what to do in case that happens

30
Q

What are the 3 options of delegation?

A
  1. Assigning responsibility (duty to perform an assigned task)
  2. Granting authority (power to make decisions)
  3. Create accountability (obligation to successfully complete a task)
31
Q

What is a learning organization?

A

organization that works to integrate continuous improvement, transforms itself to respond to changes in demand & needs and upgrades employee talent, skill & knowledge

32
Q

What does Intrapreneuring mean?

A

process of creating & maintaining the innovation & flexibility of a small business with the confines of a big business

Intrapreneuring requires 3 roles:
- Inventor (invents and oversees)
- Product Champion (helps to overcome organizational restistance - e.g. Philip)
- Sponsor (top level manager who approves & supports the project - e.g. Uli)

33
Q

What are the two most prominent characteristics that set apart services from physical goods?

A

Unstorability –> if service isn’t used when available, its wasted

Intangibility –> services often can’t be touched, tasted, smelled or seen

34
Q

What does the critical path in the PERT chart refer to?

A

the most time-consuming set of activities

35
Q

What do the terms “Lean Production System” and “Just-in-Time Production” refer to?

A

Lean Production system = designed for smooth production flows that avoid inefficiencies and eliminate unnecessary inventories

JIT-Production = type of lean production system that brings together all materials at the precise time they are required at each production stage

36
Q

What are the 5 most commonly used tools for Total Quality Management?

A

(1) Value added analysis –> evaluates all work activities & flows to determine the value they add to reveal unnecessary activities

(2) Quality Improvement Teams –> collaborative group of employees from various work areas who meet to analyze and solve production problems

(3) Getting closer to the Customer –> taking steps to know what their customers want in the products they consume

(4) The ISO Series –> label mark of quality achievement

(5) Business Process Reengineering –> rethinking each business process step from scratch

37
Q

What are the “Big 5” Personality traits?

Hint: ACEEO

A
  1. Agreeableness
  2. Consciousness
  3. Emotionality
  4. Extraversion
  5. Openness
38
Q

What are the 4 Myers-Briggs personality dimensions?

A
  • Extraversion (energy from being around others) vs Introversion (energy from being alone)
  • Sensing (prefers concrete things) vs Intuition (prefers abstract concepts)
  • Thinking (decisions based on logic & reason) vs Feeling (decisions based on emotions)
  • Judging (enjoys being finished) vs Perceiving (enjoys the process)
39
Q

What is the difference between Cognition, Affect and Intention?

A

–> They are all components of Attitudes <–

Cognition = knowledge a person presumes to have about sth
Affect = person’s feeling towards sth
Intention = part of attitude that guides behavior

40
Q

What is a psychological contract?

A

overall set of expectations held by employees and the organization regarding what employees will contribute and what organization will provide in return

41
Q

What are differences between “Overseer”, “Coach” and “Mentor”?

A

Overseer –> controls situation, directs work

Coach –> trains employees, helps team to get resources

Mentor –> helps to learn ropes, resolves conflicts

42
Q

What is strategic leadership?

A

a leader’s ability to understand complexities of both the organization and its environment and lead through change in the organization to improve its competitiveness

43
Q

What is the difference between a salary and a wage?

A

Wage is a compensation in the form of money paid for time worked

Salary is money paid for discharging the responsibilities of a job

44
Q

What is the difference between objective measures and judgemental measures in performance appraisal?

A

objective measure –> looks at numbers

judgemental measure –> compares employees directly with each other and orders them from best to worst

45
Q

What does the opportunity bias in performance appraisal refer to?

A

If some persons have a better chance to perform than others

46
Q

What does the “recency error” refer to?

A

= tendency to base judgements on the employee’s most recent performance because it is most recently recalled

47
Q

What is a contingent worker?

A

A worker that works on something other than on a full-time basis

48
Q

What does COLA stand for and what does it mean?

A

Cost Of Living Adjustments –> tie wage increases to Consumer Price Index

49
Q

What do the terms “picketing”, “boycott” and “work slowdown” mean when thinking about union tactics?

A

Picketing = workers march at entrance of organization with signs explaining their reason for striking

Boycott = when union members agree to not buy products of a targeted employer

49
Q

What do the terms “picketing”, “boycott” and “work slowdown” mean when thinking about union tactics?

A

Picketing = workers march at entrance of organization with signs explaining their reason for striking

Boycott = when union members agree to not buy products of a targeted employer

Work slowdown = instead of striking, workers perform their job in a much slower pace

50
Q

What do the terms “Lockout” and “Strikebreaker” mean when thinking about union tactics?

A

Lockout = management tactic whereby workers are denied access to their workplace (only legal if management has a legitimate business need)

Strikebreaker = temporary/permanent replacements for striking employees made by management

51
Q

What are the 4 stages of the Product Life Cycle and what do they imply?

A
  1. Introduction (product reaches marketplace; about making potential customers aware of product; usually making losses through R&D investments)
  2. Growth (sales start to climb; product starts to earn profits; competitors might already start introducing their version of this new product)
  3. Maturity (longest stage, product reaches its peak in sales and stagnates; increased competition that lower profits through higher marketing costs)
  4. Decline (profits and sales continue to fall as new product in introduction stage takes away sales; firms usually reduce promotional support)
52
Q

What are 3 ways to extend the product life cycle?

A
  1. Product Extension = existing product marketed in new markets (internationally) instead of just domestically
  2. Product Adaption = modifying product for greater appeal in different countries
  3. Reintroduction = reviving old products for new markets
53
Q

What is the difference between price skimming and penetration pricing?

A

price skimming = setting an initial higher price to cover development costs and generate a larger profit on each item sold –> works only if customers are convinced that its truly different/better from existing products and no major competitors on the monitor

penetration pricing = setting an initial lower price to create customer interest and stimulate trial purchases –> best when introducing a product that expects to have competitors quickly

54
Q

What does price lining refer to?

A

setting a limited number of prices for certain categories of products (e.g. suits for 150€, 300€, 700€) –> allows store to have a product for different customer segments

55
Q

What is the difference between a pull strategy and a push strategy when it comes to promotions?

A

pull = creates consumer demand, appeals directly to consumers who will demand the product from retailers

push = pushes wholesalers & retailers to stock & display more; firm markets products to wholesalers & retailers who then persuade customers to buy

56
Q

What are the different aims of financial and managerial accounting?

A

financial –> prepared for external users of information (e.g. income statement, balance sheet)

managerial –> prepared for internal users of information (e.g. certain costs that are relevant for managers)

57
Q

What are the “Big 4” public accounting firms?

A

Deloitte
EY
PwC
KPMG

58
Q

Name some relevant facts about the Balance Sheet!

A
  • shows firm’s financial position at one point in time
  • gives detailed information about assets, liabilities & equity
59
Q

Name some relevant facts about the Income Statement!

A
  • aka profit & loss statement
  • its outline of revenues & expenses result in a figure showing the firm’s annual profit or loss
  • shows financial results that occurred during a period of time
60
Q

Name some relevant facts about the Cashflow Statement!

A
  • summarizes yearly cash receipts and cash payments
  • shows a firm’s operating, financing and investing activities
61
Q

What is the difference between bull markets and bear markets?

A

Bull markets –> rising stock prices, generally lasting 12 months or longer

Bear markets –> falling stock prices, usually 20 percent off peak prices

62
Q

What are “Angel Investors” and what does “Venture Capital” mean?

A

Angel Investors –> outside investors who provide capital for firms in return of shares of ownership

Venture Capital –> private funds from wealthy individuals seeking investment opportunities in new growth companies

63
Q

What are the 2 most popular risk rating agencies?

A

Moody’s & Standard & Poor’s

Bachelor Exam (7 decks)

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