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PCC – Introduction to Business > Midterm > Flashcards

Midterm Flashcards

1
Q

Business

A

Any activity that seeks to provide goods and services to others while operating at a profit

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2
Q

Profit

A

The amount of money a business earns above and beyond what it spends for salaries and other expenses

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3
Q

Entrepreneur

A

A person who risks time and money to start and manage a business

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4
Q

Revenue

A

The total amount of money a business takes in during a given period by selling goods and services

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5
Q

Loss

A

When a business’s expenses are more than its revenues

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6
Q

Standard of Living

A

The amount of goods and services people can buy with the money they have

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7
Q

Quality of Life

A

The 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

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8
Q

Factors of Production

A

The resources used to create wealth:

  1. Land
  2. Labor
  3. Capital
  4. Entrepreneurship
  5. Knowledge
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9
Q

Economics

A

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

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10
Q

Microeconomics

A

The part of economics study that looks at the behavior of people and organizations in particular markets

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11
Q

Macroeconomics

A

The part of economics study that looks at the operation of a nation’s economy as a whole

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12
Q

Adam Smith

A

Believed freedom was vital to the survival of any economy, especially the freedom to own land or property and to keep the profits from working the land or running a business.

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13
Q

Invisible Hand

A

the process that turns self-directed gain into social and economic benefits for all

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14
Q

Four Basic Rights of Capitalism

A
  1. The right to own private property
  2. The right to own a business and keep all that business’s profits
  3. The right to freedom of competition
  4. The right to freedom of choice
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15
Q

Supply

A

The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.

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16
Q

Demand

A

The quantity of products that people are willing to buy at different prices at a specific time

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17
Q

4 Degrees of Competition

A
  1. Perfect Competition
  2. Monopolistic Competition
  3. Oligopoly
  4. Monopoly
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18
Q

Perfect Competition

A

When there are many sellers in a market and none is large enough to dictate the price of a product

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19
Q

Monopolistic Competition

A

When a large number of sellers produce very similar products that buyers nevertheless perceive as different

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20
Q

Oligopoly

A

When just a few sellers dominate the market

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21
Q

Monopoly

A

When only one seller controls the total supply of a product or service, and sets the price

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22
Q

Communism

A

An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

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23
Q

Mixed Economies

A

Economic system in which some allocation of resources is made by the market and some by the government

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24
Q

Exporting

A

Selling products to another country

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25
Q

Importing

A

Buying products from another country

26
Q

Free Trade

A

The movement of goods and services among nations without political or economic barriers

27
Q

Comparative Advantage Theory

A

States that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently

28
Q

Absolute Advantage

A

The advantage that exits when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries

29
Q

Balance of Trade

A

The total value of a nation’s exports compared to its imports measured over a particular period

30
Q

Balance of Payments

A

The difference between money coming into a country (from exports) and money leaving a country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment

31
Q

Sole Proprietorship

A

A business that is owned, and usually managed, by one person

32
Q

Partnership

A

a legal form of business with 2 or more owners

33
Q

Corporation

A

A legal entity with authority to act and have liability apart from its owners

34
Q

Limited Liability Company

A

A company similar to an S Corp but without the special eligibility requirements.

  1. Choice of taxation
  2. Flexible ownership rules – can be a person, partnership or corporation
  3. Flexible distribution of profits and losses
  4. Operating flexibility – not required to keep minutes, file written resolutions or hold annual meetings
  5. No stock
  6. Can’t deduct the cost of fringe benefits for members owning 2% or more
  7. Members must pay self-employment taxes on their profits as opposed to just owners’ salaries as in s corps
35
Q

Franchise

A

The right to use a specific business’s name and sell its products or services in a given territory

36
Q

People take the entrepreneurial challenge because…

A
  1. Opportunity—Many people, including those new to this country, may not have the skills for today’s complex organizations, but they do have the initiative and drive to work the long hours demanded by entrepreneurship.
  2. Profit
  3. Independence—not having to work for someone else
  4. Challenge—Entrepreneurs take moderate, calculated risks; they don’t just gamble. They seek achievement more than power.
37
Q

Micropreneur

A

Entrepreneur willing to accept the risk of starting and managing the type of business that remains small, let’s them do the kind of work they want to do, and offers them a balanced lifestyle

38
Q

Intrapreneurs

A

Creative people who work as entrepreneurs within corporations

39
Q

Learning about small business operations

A
  1. Learn from others
  2. Get some experience (rule of thumb: 3 years in comparable business first)
  3. Take over a successful firm
40
Q

Business Plan

A

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).

  • Cover letter
  • Section 1: Executive Summary
  • Section 2: Company Background
  • Section 3: Management Team
  • Section 4: Financial Plan
  • Section 5: Capital Required
  • Section 6: Marketing Plan
  • Section 7: Location Analysis
  • Section 8: Manufacturing Plan
  • Section 9: Appendix
41
Q

Small Business Administration

A

A U.S. government agency that advises and assists small businesses by providing

  • management training
  • financial advice
  • loans

The SBA may provide the following types of financial assistance:

  • Guaranteed loans
  • Microloans
  • Export express
  • Community Adjustment and Investment Program (CAIP)—loans to businesses to create new, sustainable jobs or to preserve existing jobs in eligible communities that have lost jobs due to the adoption of NAFTA
  • Pollution control loans
  • 504 certified development company (CDC)—loans for rural or urban areas needing revitalization. Max guaranteed loan = $1.5 million
42
Q

Functions of Management

A
  • Planning
  • Organizing
  • Leading
  • Controlling
43
Q

Vision

A

An encompassing explanation of why the organization exists and where its trying to head

44
Q

Mission Statement

A

An outline of the fundamental purposes of an organization

45
Q

SWOT Analysis

A

A planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats

46
Q

Levels of Management

A

Top Management (President, Vice President)
Middle Management (Plant managers, Division heads)
Supervisory (First-Line) Management (Supervisors, Department heads)
Nonsupervisory (Employees)

47
Q

Leadership Styles

A
  • Autocratic
  • Participative (Democratic)
  • Free-Rein
48
Q

Autocratic Leadership

A

Leadership Style that involves making managerial decisions without consulting others

49
Q

Participative (Democratic) Leadership

A

Leadership style that consists of managers and employees working together to make decisions

50
Q

Free-Rein Leadership

A

Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives

51
Q

Empowering

A

giving employees the authority to make a decision without consulting the manager and the responsibility to respond quickly to customer requests

52
Q

Intrinsic Reward

A

The personal satisfaction you feel when you perform well and complete goals

53
Q

Extrinsic Reward

A

something given to you by someone else as recognition for good work such as:

  • pay increases
  • praise
  • promotions
54
Q

Frederick Taylor

A

The father of scientific management

55
Q

Scientific Management

A

Studying workers to find the most efficient ways of doing things and then teaching people those techniques

56
Q

Hawthorne Effect

A

The tendency for people to behave differently when they know they are being studied

57
Q

Maslow’s Hierarchy of Needs

A

Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs

58
Q

Job Enrichment

A

A motivational strategy that emphasizes motivating the worker through the job itself. Work is assigned so that individuals can complete an identifiable task from beginning to end and are held responsible for successful achievement. Grew out of Herzberg and Maslow’s theories. Stands in contrast to Job Simplification.

5 characteristics of work are important in motivation and performance:

  1. Skill variety
  2. Task identity
  3. Task significance
  4. Autonomy
  5. Feedback
59
Q

Theory X

A

A theory by management theorist Douglas McGregor that assumes:

  • The average person dislikes work
  • Because of this dislike, workers must be forced, controlled, directed or threatened with punishment
  • The average worker prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security
  • Primary motivators are fear and money
60
Q

Theory Y

A

A theory by management theorist Douglas McGregor that assumes:

  • Most people like to work
  • Most people naturally work toward goals to which they are committed
  • The depths of a person’s commitment to goals depends on the perceived rewards for achieving them
  • Under certain conditions, most people not only accept but also seek responsibility
  • People are capable of using a relatively high degree of imagination, creativity and cleverness to solve problems
61
Q

Human Resource Management

A

The process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals

62
Q

Performance Appraisal

A

An evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination

PCC – Introduction to Business (2 decks)

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