Week 2

Question 1

external environment

Answer 1

factors beyond an organization’s boundaries that cannot be controlled (ex: competition)

Question 2

organizational boundaries

Answer 2

separates the organization from its environment

Question 3

examples of organizational environments

Answer 3

political-legal, economic, socio-cultural, technological, business, global, emerging challenges/opportunities

Question 4

the conditions of the economic system in which an organization operates

Answer 4

economic growth, economic stability, full employment

Question 5

stages of a business cycle

Answer 5

peak, recession, trough and recovery

Question 6

aggregate output

Answer 6

measure of economic growth; total quantity of goods and services produced by an economic system during a given period

Question 7

standard of living

Answer 7

total quantity and quality of goods and services that a country’s citizens can purchase with their currency

Question 8

productivity

Answer 8

measure of growth that compares the output of an economic system with the resources that are needed to produce the output; standard of living improves through increases of this

Question 9

balance of trade

Answer 9

value of all exported products minus imported products; expressed by exports - imports

Question 10

national debt

Answer 10

amount of money that a government owes its creditors; increases/decreases depending on the budget deficit/surplus

Question 11

economic stability

Answer 11

condition when the amount of money available and the quantity of goods and services produced are growing at about the same rate; examples of threats are inflation, deflation and unemployment

Question 12

inflation

Answer 12

occurs when there are widespread price increases in an economic system

Question 13

CPI

Answer 13

tool used to measure inflation

Question 14

deflation

Answer 14

a period of generally falling prices

Question 15

unemployment and the types

Answer 15

level of joblessness among people actively seeking work in an economic system; types include frictional, seasonal, cyclical, structural

Question 16

stabilization policies

Answer 16

a way to manage the Canadian economy; includes fiscal policies which handle taxes and spending, and monetary policies which handle money supply (ex: interest rates)

Question 17

technology

Answer 17

all the ways a company creates value for its customers; knowledge, work methods, physical equipment, etc.

Question 18

research and development

Answer 18

provides new ideas for products, services and processes; types are basic and applied

Question 19

political-legal environment

Answer 19

reflects the relationship between business and government (ex: regulations); pro- or anti-business sentiment, political stability, international relations

Question 20

sociocultural environment

Answer 20

customs, values, attitudes, and demographic characteristics of the society in which an organization functions; customer preferences and tastes which vary across and within national boundaries

Question 21

globalization

Answer 21

integration of markets globally; world is becoming a single interdependent system

Question 22

imports

Answer 22

products produced in Canada that are manufactured in other countries

Question 23

exports

Answer 23

products made in Canada that are purchased by consumers in other countries

Question 24

what are the major world marketplaces?

Answer 24

North America (Canada’s largest trading partner is the US, trade with Mexico is increasing)

Europe (traditional view of West vs. East, emerging view of North vs. South)

Pacific/Asia (Japan, China, India)

Question 25

barriers to international trade

Answer 25

social and cultural differences, economic differences, legal and political differences

Question 26

examples of social and cultural differences

Answer 26

language, population demographics, religious differences, social beliefs, shopping habits

Question 27

examples of economic differences

Answer 27

role of government in economy

planned vs. market economics (capitalist, socialist, community)

Question 28

examples of legal/political differences

Answer 28

quotas (limitations on importation of a product class, embargo-forbidding export/import from a nation such as US vs. Cuba)

tariffs (tax on imported goods, raises government revenues as well)

subsidies (government financial assistance for domestic firms)

protectionism (protects local business at the expense of free market competition)

local-content laws (requires that at least part of the product be made in the foreign country/area)

questionable business practices (bribes seen as “gratuities” to officials in some nations, dumping or selling goods abroad for less than a firm charges at home is illegal in most nations, cartels or associations of producers created to control supply and demand)