test 1 Flashcards
five factors of production
land, labor, capital, entrepreneurship, knowledge
five elements of business environment
economic and legal environment, technological environment, competitive environment, social environment, global business environment
forms of business ownership
sole propriertorship, corporations, partnerships
disadvantages of sole proprietorships
unlimited responsibility, limited resources, management difficulties, time commitment, limited life span/growth
master limited partnership
partnership that looks like a corporation and taxed like a partnership avoiding corporate income tax
LLP(limited liability partnership)
a partnership that limits partners risk of losing personal assets to their acts
disadvanatge of partnerships
unlimited liability, division of profits, disagreements among partnerships
alien corps
business in US but chartered inn another country
domestic corporation
business in the state they are chartered
foreign corporation
business in one state chartered in another
closed corporations
stock held by a few people
open corporation
sell stocks to general public
Quasi- public corporations
chartered by government as approved monopoly performing services to public
professional corporations
owned by those offering professional services
corporations get limited liability and are their own legal entity
true
S corporation
unique government creation that looks like a corporation but is taxed like sole proprietorship, have shareholders, directors, employees, plus benefit of limited liability. Profits are taxed only as personal income of the shareholders. Loses can be deducted from tax forms. No more then 100 shareholders, derive no more than 25 of income from passive source(rent)
LLC
choice pf taxation, limited liability. no stocks
merger
two firms form one company
vertical merger
joining of two companies in different stages of related businesses
horizontal merger
joining of two firms in same industry
conglomerate merger
joining of firms in completely unrelated industries
leveraged buyout
attempt by employees, management, private investors to buyout stockholders
free trade
movement of goods/services among nations without political/economic barriers
comparative advantage theory
a country should sell to other countries those products it produces most effectively and efficiently, and buy from other countries those products it can’t produce as efficiently
small business exports
account for 1/3 of all US exports
balance of trade
total value of nations exports compared to its imports measured over particular time period
trade surplus
exports>imports
trade deficit
exports<imports
balance of payments
difference between money coming into a country and money leaving the country
dumping
selling products in a foreign country at lower prices than those charged in the producing country
licensing
a firm deciding to compete in a global market by licensing the right to manufacture its products and use its trademark to a foreign company for a royalty
advantages of licensing
licensor spends little or no money to produce and market their products
indirect exporting
occurs when export trading companies assist by helping with negotiation and establishing trading relationship
franchising
a contractual agreement where someone with a good idea for business sells the others the right to use the business name and sell a product r service in a given territory
contract manufacturing
a foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark.
joint venture
a partnership in which two or more companies join to undertake a major project
benefits of international joint ventures
shared technology/risk, shred marketing/managing expertise, entry into markets where foreign companies aren’t allowed unless goods are produced locally
strategic alliance
long term partnership between two or more companies established to help each company build competitive market advantages
foreign direct investment
buying of permanent property and businesses in foreign nations. The most common FDI is a foreign subsidiary; a company owned in a foreign country by a parent company.
multinational corporation
manufactures and markets producst in different countries and multintional stock ownership
trade protectionism
the use of government regulations to limit the import of goods and services
protective tariffs
raise retail price of imports to make domestic goods competitively priced
revenue tariffs
designed by raise money for governments
import quotas
limits number of products in certain categories a nation can import
embargo
ban on import or export of certain product
world trade organization
mediates trade disputes among 164 nations
franchisor
company developing a product concept and sells others the right to make and sell the products
common market
regional group of countries with a common external tariff, no internal tariffs and coordinated laws to facilitate exchange
outsourcing
the process whereby one firm contracts with other companies often in other countries to do some or all functions
acquisition
one company’s purchase of the property and obligations of another company
limited liability
the responsibility of a business owner(s) fpr losses only up to the amount they invest
conventional corporation
a state chartered legal entity with authority to act and have liability seperate from its owners
cooperative(co-op)
a business owned and controlled by the people who use it with similar needs who pool their resources for mutual gains
corporation
a legal entity with authority to act and have liability seperate from its owners
franchisee
person who buys a frnachise
general partner
an owner who has unlimited liability and is active in managing the firm
general partnership
a partnership in which all owners share in operating the business and in assuming liability for business debts
incubators
centers that offer new businesses low cost offices with basic business services
limited partner
an owner who invest money in the business but does not have any management responsibility or liability for losses beyond the investment
unlimited liability
responsibility of business owners for all the debts of their business possibly including personal assets
business plan
a detailed written statement that describes the nature of the business: the target market, the advantages the business will have in relation to the competition, and the resources and qualifications of the owner
enterprise zones
specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support
intrapreneurs
creative people who work as entreprenuers within corporations
Entrepreneural team
a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product
market
cpeople with unsatisfied needs and wnats who have both the resources and willingness to buy
microprenuers
entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do and offers a balanced lifestyle
small business
a business that is independently owned and operated. Is not dominate in its field of operation and meets certain standards of size in terms of employees or annual receipts
SBA(small business administration)
a US government agency that advises and assists small business by providing management training and financial advice/loans
service corps of retired executives (SCORE)
an SBA office with volunteers from industry, trade associates, and education who counsel small business at no cost
