Review sheet

Question 1

3 Types of Growth by Mergers

Answer 1

Horizontal, vertical and conglomerate

Question 2

Horizontal merger

Answer 2

Business consolidation that occurs when two or more companies in the same industry combine to for a common goal to create a larger entity (phone lines)

Question 3

Vertical merge

Answer 3

Combination btw two company’s that operate at different stages of the supply chain for a common product (ex Walt Disney and Pixar)

Question 4

Conglomerate merger

Answer 4

Combines companies from different industries … (Amazon and Whole Foods)

Question 5

Hostile takeover

Answer 5

Entity takes control of a company without the knowledge and against the wishes of the company management

Question 6

Joint venture

Answer 6

Agreement btw two or more groups to form a business entity to achieve a specific goal or to operate for specific period

Question 7

Syndicate

Answer 7

Organized to perform a specific task that requires a large amount of capital and is dissolved as soon as its purpose is accomplished. Commonly used to underwrite large insurance policies, Loans and investments.

Question 8

Corporate Structure

Answer 8

Board of Directors and Corporate Officers

Question 9

Sole Proprietorship

Answer 9

Personally responsible for all debts of their business

Question 10

Partnership

Answer 10

Two or more parties to work together to achieve mutual goals

Question 11

Corporation

Answer 11

A legal entity created by individuals, stockholders or shareholders with the purpose of operating for profit. Are allowed to be sued, enter contracts, own assets, borrow money and much more

Question 12

Organizational relationships

Answer 12

Formal connections btw people on different departments, teams, divisions of an organization

Question 13

Business ethics

Answer 13

Application of ethical principles and values to conduct of a business and its employees

Question 14

Code of ethics

Answer 14

Set principles and guidelines that help people understand what is right or wrong and how to apply that understanding to their actions

Question 15

Market intermediary

Answer 15

A company, organization, or individual that helps move products from producers to consumers

Question 16

Microeconomics

Answer 16

Branch of economics that study how individual and business make decisions about allocating resources and they interact with each other.

Question 17

Macroeconomics

Answer 17

Study of how an economy behaves as a whole including its structure, performance and decision making. National regional and global.

Question 18

Unlimited liability

Answer 18

The legal obligation of business owners and partners to be fully responsible for a company’s debts and taxes

Question 19

Limited partnership

Answer 19

Business structure that allows multiple owners with some partners having limited and others having unlimited

Question 20

Limited partners

Answer 20

Having limited liability usually only equal to their investment and typically have little to no involvement in management

Question 21

General partners

Answer 21

Have unlimited liability and manage the business