Midterm 3 Flashcards
What is a sole proprietor?
it is an easy way to start a business, easy and adaptable with full control
What are the challenges to come with sole proprietorship?
Risk personal exposure, credibility, and raising capital
Who is responsible for debts in a sole proprietorship?
owners of sole proprietors have unlimited liability and risk; they are legally responsible
What type of business allows owners to combine talents and resources to gain access to more opportunities?
Partnerships
What is a state-charted legal entity that carries liability separate from owners?
Corporations
What is the main difference between a corporation and a partnership?
A partnership has unlimited liability, limited life, single taxation
A corporation has limited liability, unlimited life, double taxation
When in a partnership, what gives all partners authority and risks dragging other partners into bad decisions?
Mutual Agency
What type of partnership has unlimited liability, mutual agency, and share risk/reward?
General Partnerships
What type of partnership has no mutual agency, limited liability, and does not share risk/reward?
Limited Partnerships
What combines the advantages of a corporation and partnership?
Limited Liability Company (LLC)
What does LLC offer and avoid?
Offers: limited liability, flexibility, pass though taxation
Avoids: double taxation, unlimited liability, corporate structure
What are corporations legally required to do?
Create wealth for owners
What are three types of corporations?
Domestic, Foreign, Alien
Which corporations strive for a sustainable future objective?
Benefit (B) Corps
People, Planet, and Profit refers to?
Triple Bottom Line
What type of stock gives voting rights and residual claim on assets?
Common Stock
What type of stock gives no voting power but has first claim on assets?
Preferred Stock
What type of firm is made up of the combination of two firms?
Merger
What is it called when a firm buys another firm?
Acquisition
What looks like a corporation but is taxed like a sole proprietorship?
S Corporation
Who creates a new business in the face of risk and uncertainty to achieve profit and growth?
Entreprenuers
What tool exploits change as an opportunity?
Innovation
___________ is a part of the entrepreneurial process
Failure
Who stimulates innovation and creativity within a large established organization?
Intrapreneurs
What type of analysis determine how attractive an industry is for new businesses?
Opportunity Analysis
What type of analysis answers to question of whether a business idea should move forward?
Feasibility Analysis
What type of analysis determines the degree to which a product/service appeals to consumers?
Product/Service Analysis
What type of analysis looks at capital requirements, estimated earnings, and return on investments?
Financial Analysis
What systematically evaluates the chances for a business’s success and serves as a “road map” for a business?
Business Plan
What is the personal investment owners put in a firm?
Equity Capital
What do investors assume when investing in a new company?
The risk of losing money (Risk Capital)
What is often the most common first source of money for starting businesses?
Personal Savings
Which type of investors are best when a company has outgrown the capacity of family and friends but comes at the exchange for stocks?
Angel Investors
What is the first time a firm sells stock to the public?
Initial public offering (IPO)
Who creates goals, maintains the status quo and directs employees?
Managers
Who creates a vision, changes agents, take risks, and coaches employees?
Leaders
What are the 4 functions of management?
Planning, Leading, Organizing, and Controlling
Which function sets goals and standards, develops strategies, and determines resources?
Planning
Which function guides and motivates employees, gives assignments, routines, policies, and feeback?
Leading
Which function prepares a structure of authority, trains and recruits employees, and established procedures to establish goals?
Organizing
Which function measures results, rewards performance, and takes corrective action?
Controlling
What is the outline of a firms fundamental purpose?
Mission Statement
What gives a firm a sense of purpose and a set of values?
Vision
What type of analysis looks at internal strengths and weaknesses?
SWOT anaylsis
What type of analysis looks at external opportunities and threats?
SWOT Analysis
Which form of planning involves setting broad long-term goals?
Strategic Planning
Which form of planning develops short-term objectives and answers what is to be done, who does it, and how it is done?
Tactical Planning
Which form of planning sets standards and schedules necessary to implement firm’s objectives?
Operational Planning
Which form of planning creates back up plans for when goals and objectives aren’t achieved?
Contingency Planning
What is the free movement of people, goods, services, and capital across international borders?
Globalization
Which organization polices the world trading system?
World Trade Organization
What maintains order in the global money system?
International Monetary Fund
Buying from another country is an example of…
Importing
Selling to another country is an example of…
Exporting
What is the idealized movement of goods and services without economic or political barriers?
Free Trade
What process involves a firm obtainning goods and services from an outside or foreign supplier?
Outsourcing
What is the comparison of the value of exports to the value imports?
Balance of Trade
When the value of exports is greater than the value of imports…
Trade Surplus (good)
When the value of exports is less than the value of imports…
Trade Deficit (bad)
What forces can affect trade?
Sociocultural, economic, legal, environmental
Are there global regulations on trade?
No, each country has its own laws and regulations
What provides rights to manufacture a product to a foreign company for a fee?
Licensing
What sells rights for idea/name and to sell product in a given area?
Franchising
What is it called when a foreign company produces private label goods to which a domestic company attaches trademark?
Contact Manufacturing (outsourcing)
What is a partnership in which 2 or more firms join to undertake a major project?
Joint Venture
What is a partnership that helps each other build a competitive advantage?
Strategic Alliance
What is it called when permanent property is bought in a foreign nation?
Foreign Direct Investment
What is the tax on imported goods?
Tariffs
What is one way governments can increase their revenue and protect domestic producers?
Tariffs
What is a government payment to domestic producers?
Subsidies
What is the direct restriction on quantity of imported goods?
Import quota
What is the interference of a foreign market by selling goods below fair market price?
Dumping
What is a regional group of countries with common external tariffs and coordinated laws?
Common Market
What are the 3 levels of ethical standards?
Legal, Organizational Polices/Procedures, Moral Stance
Where does ethics start?
From the top
The rights to safety, be informed, choose, be heard are …
Rights of Consumers
What are some roots of unethical behavior?
personal ethics code, culture, ignorance, unrealistic goals, unethical leadership
What established new enhanced standards for US company boards, management, and accounting firms?
Sarbanes-Oxley Act 2002
What established comprehensive regulation of financial markets, tighter regulation of credit rating agencies, and consumer protection reform?
Dodd-Frank Act 2010
What are the accepted principles of right or wrong in governing the conduct of business people?
Business Ethics
What governs product liability?
Tort Laws
What governs contracts and breaches of contracts?
Contract Laws
What provides protection of ideas?
Intellectual Property Laws
What governs competitive behavior?
Antitrust Laws
What governs the issuing and selling of securities?
Securities Laws
Embezzlement, information manipulation, anticompetitive behavior, environmental degradation are examples of …
Ethical issues that prioritize the bottom line
Which philosophy dictates the responsibility to profit lawfully?
Fredman Doctrine
Which philosophy dictates that responsibility falls on those that are affected by company decisions?
Stakeholder Theory
What is an externality?
When other people pay bills for firm’s impact on society
This ethic code prevents unlawful behavior through increasing control and penalizing…
Compliance-Based
This ethic code prevents unlawful behavior through guiding values, environment, and shared accountability…
Integrity-Based
What requires private property, freedom of choice, right to keep profits, and fair competition?
Private Enterprise
How does the government intervene to ensure a private enterprise?
Through laws and industry regulations
What is established by judges when setting disputes?
Common Law
What is enacted by federal and state legislature?
Statuary Law
What are regulations created by federal and state administrative agencies?
Administrative Law
Which branch of government enforces laws?
Judiciary
What law involves disputes between government and individuals and can result in fines or imprisonment?
Criminal Law
What law involves disputes between two individuals and results in fines?
Civil Law
Are the owners of a corporation affected when said corporation is taken to court?
No because corporations are their own single entity separate from owners
Assault, slander, libel, fraud and product liability are examples of
Torts
False investments and hurting someone through deception and manipulation are examples of
Fraud
Which dispute resolutions involve binding or non-binding results?
Arbitration
Which dispute resolutions involves only non-binding results?
Mediation
What type of property includes real estate and permanently attached property?
Real Property
What type of property includes tangle and intangible items?
Personal Property
What type of property includes items made by a person’s creative activity?
Intellectual Property
What are the exclusive rights to an invention in exchange for public disclosure?
Patents
How long do patents last?
20 years
What are the exclusive rights to symbols, name, sounds, and brand?
Trademark
What are the exclusive rights to documents?
Copyright
What is a legally enforceable agreement between 2 or more parties?
Contract
Legal purpose, consideration, and voluntary agreement make up…
Elements of a Contract
Minors, intoxicated, coerced, mentally unstable, and insane lack…
Contractual Capacity
What law gives debtor a fresh start by relieving debts?
Bankruptcy
What seeks to harmonize commercial transactions across states?
Uniform Commercial Code (UCC)
What describes the rationale for how an organization creates, delivers, and captures value?
Business Model
Which segment includes needs, solutions, customer satisfaction, and value?
Value Proposition
Which segment includes who and why questions?
Consumer Segment
Which segment includes the movement of product from company to consumer?
Channel
Which segment includes how to get, grow, and keep customers?
Customer Relationships
Why is it most important to maintain current customers?
Current customers are the best source of revenue, referrals, and new ideas
Which segment includes strategies to make money from customers?
Revenue
Which segment includes most important assets required to make a business work?
Key Resources
Which segment includes most important supplies and partners to make a business work?
Key Partnerships
Which segment includes production, problem solving, and supply chain management?
Key Activities
Which segment includes the cost to operate a business?
Cost Structure
What is a tool for communication and growth?
Business Model Canvas
