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SOM 122 > MIDTERM > Flashcards

MIDTERM Flashcards

1
Q

Businesses

A

Organizations that provide goods or services that are then sold to earn profits.

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2
Q

Profit

A

the difference between a business’s revenues and its expenses

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3
Q

External Environment

A

everything outside an organizations boundaries that may affect it

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4
Q

Domestic Business Environment

A

the environment in which a firm conducts its operations and derives its revenues

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5
Q

Global Business Environment

A

The international forces that affect a business

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6
Q

Technological Environment

A

all the ways by which firms create value for their constituents

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7
Q

Political-Legal Environment

A

the relationship between business and government

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8
Q

Sociocultural Environment

A

the customs, mores, values, and demographic characteristics of the society in which an organization functions

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9
Q

Economic Environment

A

Relevant conditions that exist in the economic system in which a company operates

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10
Q

Economic System

A

a nation’s system for allocating its resources among its citizens

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11
Q

Factors of Production

A

resources used in the production of goods and services- labor, capital, entrepreneurs, physical resources, and information resources

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12
Q

Labor (Human Resources)

A

physical and mental capabilities of people as they contribute to economic production

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13
Q

Capital

A

funds needed to create and operate a business enterprise

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14
Q

Entrepreneur

A

individual who accepts the risks and opportunities involved in creating and operating a new business venture

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15
Q

Physical Resources

A

tangible items that organizations use in the conduct of their businesses

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16
Q

Information Resources

A

data and other information used by businesses

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17
Q

Planned Economy

A

economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions

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18
Q

Market Economy

A

Economy in which individuals control production and allocation decisions through supply and demand

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19
Q

Communism

A

Political system in which the government owns and operates all factors of production

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20
Q

Market

A

mechanism for exchange between buyers and sellers of a particular good or service

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21
Q

Capitalism

A

system that sanctions the private ownership the factors of production and encourages entrepreneurship by offering profits as an incentive

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22
Q

Mixed Market Economy

A

Economic system featuring the characteristics of both planned and market economies

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23
Q

Privatization

A

process of converting government enterprises into privately owned companies

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24
Q

Socialism

A

planned economic system in which the government owns and operates only selected major sources of production

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25
Q

Demand

A

the willingness and ability of buyers to purchase a good or survice

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26
Q

Supply

A

the willingness and ability of producers to offer a good or service for sale

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27
Q

Law of Demand

A

buyers will purchase (demand) more of a product as its price drops and less of a product as its price increases

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28
Q

Law of Supply

A

producers will offer (supply) more of a product for sale as its price rises and less of a product as its price drops

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29
Q

Demand and Supply Schedule

A

assessment of the relationships among different levels of demand and supply at different price levels

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30
Q

Demand Curve

A

graph showing how many units of a product will be demanded (bought) at different prices

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31
Q

Supply Curve

A

graph showing how many units of a product will be supplied at different prices

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32
Q

Market Price

A

profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal

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33
Q

Shortage

A

situation in which quantity demanded exceeds the quantity supplied `

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34
Q

Private enterprise

A

economic system that allows individuals to pursue their own interest without undue governmental restriction; private property rights, freedom of choice, profits, competition

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35
Q

Competition

A

when businesses compete for the same resources or customers

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36
Q

Perfect competition

A

market or industry characterized by numerous small firms producing an identical product; small firms in great quantity.

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37
Q

Monopolistic Competition

A

market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors

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38
Q

Oligopoly

A

market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products

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39
Q

Monopoly

A

market or industry in which there is only one producer that can therefore set the prices of its products

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40
Q

Natural Monopoly

A

industry in which one company can most efficiently supply all needed goods and services

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41
Q

Economic Indicators

A

statistics that help assess the performance of an economy

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42
Q

Business Cycle

A

short-term pattern of economic expansions and contractions

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43
Q

Aggregate Output

A

the total quantity of goods and services produced by an economic system during a given period

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44
Q

Standard of Living

A

the total quantity and quality of goods and services people can purchase with the currency used in their economic system.

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45
Q

GDP (Gross Domestic Product)

A

total value of all goods and services produced within a given period by a national economy through domestic factors of production

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46
Q

GNP (Gross National Product)

A

Total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located

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47
Q

GDP per Capita

A

GDP per individual person;gross domestic product divided by total population

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48
Q

Real GDP

A

GDP adjusted to account for changes in currency values and price changes

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49
Q

Nominal GDP

A

GDP measured in current dollars or with all components valued at current prices

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50
Q

Purchasing Power Parity (PPP)

A

the principle that exchange rates are set so that the prices of similar products in different countries are about the same

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51
Q

Productivity

A

a measure of economic growth that compares how much a system produces with the resources needed to produce it

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52
Q

Balance of Trade

A

the economic value of all the products that a country exports minus the economic value of all the products it imports

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53
Q

National Debt

A

the amount of money the government owes its creditors

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54
Q

Stability

A

condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate

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55
Q

Inflation

A

occurs when widespread price increases occur throughout an economic system

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56
Q

Consumer Price Index

A

a measure of the prices of typical products purchased by consumers living in urban areas

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57
Q

Unemployment

A

the level of joblessness amount people actively seeking work in an economic system

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58
Q

Recession

A

a period during which aggregate output, as measured by GDP, declines

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59
Q

Depression

A

a prolonged and deep recession

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60
Q

Fiscal Policies

A

policies used by a government regarding how it collects and spends revenue

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61
Q

Monetary Policies

A

policies used by a government to control the size of its money supply

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62
Q

Stabilization Policy

A

government economic poly intended to smooth out fluctuations in output and unemployment and to stabilize prices

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63
Q

Business Ethics

A

ethical or unethical behaviors by employees in the context of their jobs

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64
Q

Managerial Ethics

A

Standards of behavior that guide individual managers in their work

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65
Q

Social Responsibility

A

the attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities

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66
Q

Organizational Stakeholders

A

those groups individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance

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67
Q

Stakeholder Responsibility (5 groups)

A 
(SLICE)
Suppliers
Local communities
Investors
Customers
Employees
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68
Q

Consumerism

A

form of social activism dedicated to protecting the rights of consumers in their dealings with business

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69
Q

Collusion

A

illegal agreement between two or more companies to commit a wrongful act

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70
Q

Whistle-blower

A

employee who detects and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them

71
Q

Insider Trading

A

illegal practice of using special knowledge about a firm for profit or gain

72
Q

Obstructionist Stance (social responsibility)

A

approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations

73
Q

Defensive Stance (social responsibility)

A

approach to social responsibility that a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment

74
Q

Accommodative Stance (social responsibility)

A

approach to social responsibility by which a company, if asked to do so, exceeds minimum legal commitment to groups and individuals in its social environment

75
Q

Proactive Stance (social responsibility)

A

approach to social responsibility by which a company actively seeks opportunities to contribute to the well being of groups and individuals in its social environment

76
Q

Regulation

A

the establishment of laws and rules that dictate what organizations can and cannot do

77
Q

Direct Regulation

A

government creates agencies to monitor and control certain areas of business activity

78
Q

Indirect Regulation

A

Government can influence how organizations spend their social responsibility dollars by providing greater or lesser tax incentives.

79
Q

Lobbying

A

the use of persons or groups to formally represent an organization or group of organizations before political bodies

80
Q

Political Action Committees (PAC)

A

special organizations created to solicit money and then distribute it to political candidates

81
Q

Legal Compliance

A

the extent to which the organization conforms to local, state, federal, and international laws

82
Q

Ethical Compliance

A

the extent to which the members of the organization follow basic ethical and legal standards of behavior

83
Q

Philanthropic Giving

A

the awarding of funds or gifts to charities or other worthy causes

84
Q

Corporate Social Audit

A

systematic analysis of a firm’s success in using funds earmarked for meeting its social responsibility goals

85
Q

Small Business Administration (SBA)

A

government agency charged with assisting small businesses

86
Q

Small Business

A

independently owned business that has relatively little influence in its market

87
Q

Entrepreneur

A

businessperson who accepts both the risks and opportunities involved in creating and operating a new business venture

88
Q

Entrepreneurship

A

the process of seeking businesses opportunities under conditions of risk

89
Q

Importance of Small Business

A

creates jobs, introduces new, major innovations, and most products made by big business are sold to consumers by the small businesses

90
Q

Areas of Small Businesses (7)

A

Services, Retailing, Construction, Wholesaling, Finance and Insurance, Manufacturing, and Transportation

91
Q

Established Market

A

one in which many firms compete according to relatively defined criteria

92
Q

Niche

A

segment of a market that is not currently being exploited

93
Q

First-Mover Advantage

A

any advantage that comes to a firm because it exploits an opportunity before any other firm does

94
Q

Business Plan

A

document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how that strategy will be implemented

95
Q

Franchise

A

arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)

96
Q

Venture Capital Company

A

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

97
Q

Small Business Investment Company (SBIC)

A

government regulated investment company that borrows money from the SBA to invest in or lend to a small business

98
Q

Small Business Development Center (SBDC)

A

SBA program designed to consolidate information from various disciplines and make it available to small businesses

99
Q

Reasons For Business Failure (4)

A

Managerial incompetence or inexperience
Neglect
Weak control system
Insufficient Capital

100
Q

Reasons for Business Success (4)

A

Hard work, drive, and dedication
Market demand for the products or services
Managerial Competence
Luck

101
Q

Sole Proprietorship

A

business owned and usually operated by one person who is responsible for all of its debts

102
Q

Advantages v. Disadvantages of Sole Proprietorships

A

Advantages
freedom
easy to form
tax benefits

Disadvantages
unlimited liability
depends on resources of one person
hard to borrow money

103
Q

Unlimited Liability

A

legal principle holding owners responsible for paying off all its debts of a business

104
Q

General Partnership

A

business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts

105
Q

Advantages v. Disadvantages of Partnerships

A

Advantages
make it easy to borrow money
can invite new partners to join by investing
can be organized by meeting only a few legal requirements

Disadvantages
unlimited liability
potential lack of continuity
difficulty with transferring ownership

106
Q

Limited Partnership

A

type of partnership consisting of limited partners and a general (or managing) partner

107
Q

Limited Partner

A

Partner who does not share in a first management and is liable for its debts only to the limits of said partner’s investment

108
Q

General Partner

A

partner who actively manages a firm and who has unlimited liability for its debts

109
Q

Cooperatives

A

form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits

110
Q

Master Limited Partnership

A

form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits

111
Q

Corporation

A

business that is legally considered an entity separate from its owners and is liable for its own debts; owners liability extends to the limits of their investments

112
Q

Limited Liability

A

legal principle holding investors liable for a firm’s debts only to the limits of their personal investments in it

113
Q

Tender Offer

A

offer to buy shares made by a prospective buyer directly to a target corporation’s shareholders, who then make individual decisions about whether to sell

114
Q

Double Taxation

A

situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes

115
Q

Advantages v. Disadvantages of Corporations

A

Advantages
limited liability
continuity
can raise money through sales of stocks

Disadvantages
tender offer- company can be taken over against managements will
start-up cost
double taxation

116
Q

Private (Closely Held) Corporation

A

corporation whose stock is help by only a few people and is not available for sale to the general public

117
Q

Public (Publicly Held) Corporation

A

corporation whose stock is widely held and available for sale to the general public

118
Q

S Corporation

A

hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes

119
Q

Limited Liability Corporation (LLC)

A

hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability

120
Q

Professional Corporation

A

form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability

121
Q

Multinational corporation

A

form of corporation spanning national boundaries

122
Q

Corporate Governance

A

roles of shareholders, directors, and other managers in corporate decision making and accountability

123
Q

Stockholder

A

owner of shares of stock in a corporation

124
Q

Board of Directors

A

governing boy of a a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets

125
Q

Officers

A

top management team of a corporation

126
Q

Strategic alliance

A

strategy in which two or more organizations collaborate on a project for mutual gain

127
Q

Joint Venture

A

Strategic alliance in which the collaboration involves joint ownership of the new venture

128
Q

Employee Stock Ownership Plan (ESOP)

A

arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control its voting rights

129
Q

Institutional Investor

A

large investor that purchases large blocks of corporate stocks

130
Q

Merger

A

the union of two corporations to form a new corporation

131
Q

Acquisition

A

the purchase of one company by another

132
Q

Divestiture

A

strategy whereby a firm sells one or more of its business units

133
Q

Spin-off

A

strategy of setting up one or more corporate units as new, independent corporations

134
Q

Globalization

A

process by which the world economy is becoming a single interdependent system

135
Q

Import

A

product made or grown abroad but sold domestically

136
Q

Export

A

product mad or grown domestically but shipped and sold abroad

137
Q

Association of Southeast Asian Nations (ASEAN)

A

organization for economic, political, social, and cultural cooperation among Southeast Asian nations

138
Q

General Agreement on Tariffs and Trade (GATT)

A

international trade agreement to encourage the multilateral reduction or elimination of trade barriers

139
Q

World Trade Organization (WTO)

A

organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices

140
Q

Balance of Trade

A

economic value of all products a country exports minus the economic value of all products it imports

141
Q

Trade Deficit

A

situation in which a country’s imports exceed it’s exports, creating a negative balance of trade

142
Q

Trade Surplus

A

situation in which a country’s exports exceed it’s imports, creating a positive balance of trade

143
Q

Balance of Payments

A

flow of all money into or out of a country

144
Q

Exchange Rate

A

rate at which the currency of one nation can be exchanged for the currency of another nation

145
Q

Euro

A

a common currency shared among most members of the EU (excluding Denmark, Sweden, and the United Kingdom)

146
Q

Absolute Advantage

A

the ability to produce something ore efficiently than any other country can

147
Q

Comparative Advantage

A

the ability to produce some products more efficiently than others

148
Q

National Competitive Advantage

A

international competitive advantage stemming from a contribution of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries

149
Q

Outsourcing

A

the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services

150
Q

Offshoring

A

the practice of outsourcing to different countries

151
Q

Exporter

A

firm that distributes and sells products to one or more foreign countries

152
Q

Importer

A

firm that buys products in foreign markets and then imports them for resale in its home country

153
Q

International Firm

A

firm that conducts a significant portion of its business in foreign countries

154
Q

Multinational Firm

A

firm that designs, produces, and markets products in many nations

155
Q

Independent Agent

A

foreign individual or organization that agrees to represent an exporter’s interests

156
Q

Licensing Agreement

A

arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country

157
Q

Branch Office

A

foreign office set up by an international and multinational firm

158
Q

Strategic Alliance

A

arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner’s country

159
Q

Foreign Direct Investment (FDI)

A

arrangement in which a firm buys or establishes tangible assets in another country

160
Q

Social Orientation

A

a person’s beliefs about the relative importance of the individual versus groups to which that person belongs

161
Q

Power Orientation

A

the beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations

162
Q

Uncertainty Orientation

A

the feeling individuals have regarding uncertain and ambiguous situations

163
Q

Goal Orientation

A

the manner in which people are motivated to work toward different kinds of goals

164
Q

Time Orientation

A

the extent to which members of a culture adopt a long-term versus short-term outlook on work, life and other elements of society

165
Q

Quota

A

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

166
Q

Embargo

A

government order banning exportation or importation of a particular product or all products from a particular country

167
Q

Tariff

A

tax levied on imported products

168
Q

Subsidy

A

government payment to help a domestic business compete with foreign firms

169
Q

Protectionism

A

practice of protecting domestic business against foreign competition

170
Q

Local Content Law

A

law requiring that products sold in a particular country be at least partly made there

171
Q

Business Practice Law

A

law or regulation governing business practices in given countries

172
Q

Cartel

A

association of producers whose purpose is to control supply and prices

173
Q

Dumping

A

practice of selling a product for less than the cost of production

174
Q

B Corporations

A

Organization that seeks profits but performance is not only measured by profits and growth, but by impact on society
Ex. Red Cross, American Cancer Society

SOM 122 (1 decks)

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