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BUS-G 202 > Topic 1 > Flashcards

Topic 1 Flashcards

1
Q

Competition in the marketplace forces managers to think in terms of what?

A

Outcomes (profits, sales, market share, etc.)

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2
Q

What factors are more important to non-market players?

A

Oversights, quality assurance, and social welfare all gain importance

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3
Q

What does the PEST Framework stand for?

A

Political, Economic, Social, and Technological

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4
Q

What is Corporate Social Strategy?

A

The opportunities and risks that companies face and how they operate in an ever-changing social environment

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5
Q

What were BP’s two strategic acquisitions?

A

ARCO (an oil and gas company) for $26.5B and Solarex for $45M

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6
Q

Greenpeace gave who the Greenwash of the Year Award?

A

BP (British Petroleum)

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7
Q

What did BP do to rebrand itself?

A

Create a new logo and advertising campaign which represented rebirth and the Helios logo (sun God)

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8
Q

What did NGOs find when looking at BP?

A

While BP spent much of its time advertising its involvement in the solar energy market, its oil industry is 588 times larger than its solar industry

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9
Q

Why did Greanpeace accuse BP of pretending to be green?

A

BP spent $45M to acquire Solarex, but spent $26B to acquire ARCO and $207M to implement Helios re-branding

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10
Q

What was BP’s Corporate Social Strategy?

A

Selective expression of its positive effects

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11
Q

What do NGOs do when market inefficiencies exist?

A

Take political or direct action (e.g. when companies lack property rights, abuse market power, cause pollution or externalities, etc)

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12
Q

Public policy changes can do what?

A

Both cause inefficiencies and correct existing inefficiencies

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13
Q

What occurs at a socially efficient production level (Qe)?

A

Production and sale of a product that consumers value more than the costs of production

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14
Q

When consumers value a product more than the costs of production, what occurs?

A

Socially efficient production levels (Qe)

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15
Q

What two factors capture all the metrics needed to gauge social efficiency?

A

Demand and supply

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16
Q

Demand represents what?

A

Value to customers (Consumer valuation)

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17
Q

What is consumer surplus?

A

The difference between what customers are willing to pay and the price they have to pay

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18
Q

Supply represents what?

A

The cost to producers (Cost of production)

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19
Q

What is producer surplus?

A

The difference between the price sellers receive and the minimum supply price needed to cover costs

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20
Q

Social efficiency occurs when?

A

At market equilibrium (When all costs and value are accounted for in demand and supply curves)

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21
Q

Taxes imposed on sellers cause what?

A

An inward shift of the supply curve (decreased supply) while raising costs of production

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22
Q

What are the general results of taxation?

A

Government collects revenue, prices are increased to buyers, prices are decreased to sellers, and lower quantities are both bought and sold

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23
Q

Taxes do what to surpluses?

A

Consumer and producer surpluses decrease

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24
Q

Productive regulation on sellers causes what?

A

An inward shift of the supply curve (decreased supply)

25
Q

Subsidies given to sellers cause what?

A

An outward shift of the supply curve (increased supply) and effectively lower the costs of production

26
Q

Renewable Portfolio Standard (RPS)

A

A regulation that requires the increased production of energy from renewable energy sources such as wind, solar energy, etc.

27
Q

Taxes are efficiently enhancing in markets that are what?

A

Over-producing relative to Qe

28
Q

What are the general results of subsidies?

A

Decreased prices to buyers, increased prices to sellers, and increased quantity bought and sold

29
Q

What do subsidies do to surpluses?

A

Consumer and producer surpluses increase

30
Q

Subsidies are efficiently enhancing in markets that are what?

A

Under-producing relative to Qe

31
Q

What are the general results of productive regulation?

A

Increased prices to buyers, decreased prices to sellers, and reduced quantity bought and sold

32
Q

What does productive regulation do to surpluses?

A

Consumer and producer surpluses decrease

33
Q

Productive regulations are efficiently enhancing in markets that are what?

A

Over-producing (at a level above Qe)

34
Q

Voters are assumed to be what?

A

Rationally ignorant because it’s costly for you to become informed and it isn’t likely that an individual vote will make a difference

35
Q

Politicians (elected officials) are assumed to be what?

A

Vote-maximizers because, regardless of their ultimate motivation, the ability to achieve goals depends upon re-election

36
Q

Bureaucrats (civil servants) are assumed to be what?

A

Budget-maximizers; because they seek promotions, higher pay, prestige, and job security, which all become possible with a bigger budget

37
Q

Politicians support projects that have what?

A

Clearly defined current events and future costs that are difficult to identify

38
Q

What is a local example of the shortsightedness effect?

A

Lucas Oil Stadium (Indianapolis, IN) was (a) built using increased taxes on gambling, while there’s no gambling around the city, and (b) estimated to cost $2M+ less in operation costs annually

39
Q

Why do politicians maximize influence on current voters if it’s inefficient?

A

Essentially, politicians want to please the current general public at expense of future generations, because future generations wont affect re-election

40
Q

Why don’t politicians attempt to keep costs lower?

A

The public sector has no profit motive, bureaucrats are rarely in a position to personally gain from cutting costs, and they’re spending other people’s money

41
Q

What is lobbying?

A

The devotion of resources to influence public policy formation in order to bring more income to your interests

42
Q

What is the special interest effect?

A

Small group of people receive benefits at the expense of a large group

43
Q

What does a majoritarian political action qualify as?

A

Widely dispersed benefits and widely dispersed costs

44
Q

What does an entrepreneurial political action qualify as?

A

Widely dispersed benefits and concentrated costs

45
Q

What does a client political action qualify as?

A

Concentrated benefits and widely dispersed costs

46
Q

What does an interest group political action qualify as?

A

Concentrated benefits and concentrated costs

47
Q

Majoritarian politics represent what?

A

No special interest group action on either side (e.g. Social security)

48
Q

Client politics represent what?

A

One special interest group is active in favor of an issue (e.g. USDA Foreign Advertising Funds)

49
Q

Interest group politics represent what?

A

Active special interest groups are on both sides of the issue (e.g. Legalization of marijuana)

50
Q

Entrepreneurial politics represent what?

A

One special interest group is active against an issue (e.g. Nuclear waste dumps)

51
Q

Where did Ventria attempt to move in 2004?

A

Ventria partnered with Northwest Missouri State University and tried to begin production in the state

52
Q

Who threatened to stop buy Missouri rice if Ventria was granted access to the state?

A

Anheuser-Busch, which is based in St. Louis, MO

53
Q

Where did Ventria finally end up?

A

Ventria eventually moved to Kansas, and proposed 3,200 acre production in Geary County

54
Q

What helped stop Ventria from producing in rice states?

A

Activists’ arguments from the heart and traditional rice’s arguments from the state economy

55
Q

By locating in a non-rice state, Ventria did what?

A

Ventria gained political leverage by removing the threat to the state economy, promising to inject jobs, and removing the worry of contamination

56
Q

Who were Ventria’s allies?

A

Ventria investors and employees, the bio technology and pharmaceutical industries, UC Davis, Infant Formula Industry, Military, Activist groups (Unicef, Redcross, WHO), and the California Rice Commision

57
Q

Who were the neutral parties in the Ventria case?

A

The federal government (FDA, USDA, EPA) and the state government

58
Q

Who were Ventria’s adversaries?

A

Coalition of activists (Friends of the Earth, Consumer Food Safety Groups, Nutritional Groups), Traditional Rice Producers (Millers and farmers), Japan Rice Retailer Association, and the California Secretary of Agriculture

59
Q

Ventria’s case qualifies as what type of politics?

A

Interest group politics

BUS-G 202 (2 decks)

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