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Business

Activity that seeks to provide good while operating a profit

1

Goods

Tangible products; ex. Items

2

Services

Intangible products; ex. Healthcare

3

Entrepreneur

A person who risks time and money to start a business

4

Profit

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

5

Revenue

The total amount of money a business takes in

6

Loss

When expenses are more than received

7

Quality of Life

General well-being of society in terms of its political freedom

8

Standard of living

Amount of goods you can buy with the money you have

9

Stakeholders

All the people who stand to gain or lose by the activities of a business

10

Outsourcing

Contracting with other companies to do functions of the firm

11

Insourcing

Foreign companies bringing forth tasks to the U.S

Sig- helps create jobs

12

Non-Profit Organization

Goals do not include making a personal profit

13

Factors of Production

The resources used to create wealth;
1. Land 2.labor 3.capital 4.entrepeneurship and 5.knowledge

14

Productivity

The amount of output you generate given the amount of input

15

E-commerce

Buying and selling goods over the Internet.

16

Database

An electric storage file for information

17

Identity Theft

Obtaining someone's information for illegal purposes

18

Empowerment

Giving frontline workers responsibility

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Demography

Statical study of the human population

20

Climate change

Movement if temperature

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Greening

A trend toward saving energy

22

Economics

The study of how society chooses to employ resources to produce goods and distribute them amongst individuals

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Macroeconomics

Looks at the operation of a nations economy as a whole

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Microeconomics

Looks at the behavior of people and organizations in particular markets

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Resource Development

Study of how to increase resources and to create the conditions that will make better use of those resources

26

Invisible hand

The process that turns self directed gain into social and economic benefits for all ((dubbed by Adam Smith))

27

Capitalism

An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit

28

Supply

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

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Market price

Determined by supply and demand

30

Perfect competition

The degree of competition in which there are many sellers in a market and none is large enough to dictate the price of the product

Ex: agriculture

31

Monopolistic competition

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

Ex: hotdogs

32

Oligopoly

A degree of competition in which just a few sellers dominate the market

Ex: airlines

33

Monopoly

Only one seller controls the total supply of a product or service and sets the price

34

Socialism

An economic system based on the premise that some, if not most, basic business should be owned by the government so that profits can be more evenly distributed among the people

35

Brain drain

The loss of the best and brightest people to other coubtries

36

Communism

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

37

Free market economics

The market largely determines what goods and services get produced, who gets them, and how the economy grows

38

Command economies

Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow

39

Gross domestic product (GDP)

The total value of final goods and services produced in a country in a given year

40

Unemployment rate

The number of civilians at least 16 years of ages who are unemployed but attempted to find a job within the past 4 weeks

41

Inflation

A general rise in goods and services over time

42

Frictional unemployment

Those who have quit work and have yet to find a new job

43

Structural unemployment

Caused by businesses restructuring themselves

44

Cyclical unemployment

Due to the recession or business cycle

45

Seasonal unemployment

Demand varies over the uears

46

Disinflation

Price increases slowly

47

Deflation

Prices are declining

48

Stagflation

When the economy is slowing but the prices are still going up

49

Consumer price index (CPI)

Monthly statistics that measure the pace of inflation and deflation

50

Producer price index (PPI)

Measures prices at a wholesale level

51

Business cycle

The periodic rises and falls that occur in economics over time

52

Recession

Two or more consecutive quarters of decline in the GDP

53

Depression

A severe recession, usually accompanied by deflation

54

Fiscal policy

The federal governments efforts to keep the economy stable by increasing or decreasing taxes or government spending

55

National Debt

The sum of government deficits over time

56

Keynesian Economic Theory

The theory that a government policy of increasing spending and cutting taxes could stimulate the economy in a recession

57

Monetary Policy

The management of the money supply and interest rates by the Federal Reserve

58

Importing

Buying products from another country

59

Exporting

Selling products to another country

60

Free trade

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

61

Comparative Advantage Theory

A country should sell to other countries those products that it produces the best and to buy from other countries products they aren't as goods in producing

62

Absolute advantage

The advantage that exists when a country has a monopoly on producing a product more than others

63

Balance of trade

The total value of a nations exports compared to its imports over a particular period

64

Trade surplus

A favorable balance of trade; when exports exceeds imports

65

Trade deficit

An unfavorable balance of trade; imports exceed exports

66

Balance of payments

The difference between money coming into the country and money leaving the country.

Remember: money flows from other things too such as tourism, foreign aid, foreign investments, etc

67

Dumping

Selling products in a foreign country at lower prices that the producing country

68

Licensing

A firm allows a foreign company to produce its product for a royalty fee

69

Contract manufacturing

Private label goods a company attached its name to. A type of outsourcing

70

Joint venture

2 or more companies undertake a project

71

Strategic alliance

A long term partnership between 2 or more companies to have competitive market advantages

72

Foreign direct investments (FDI)

The buying if permanent property and businesses in foreign nations

73

Foreign subsidiary

Company owned by another company. Aka the parent company

74

Multinational corporation

A company that manufactures in many different countries

75

Sovereign wealth funds

Funds controlled by government holding large stakes

76

Exchange rate

The value of one nation's currency relative to another nation's currency

77

Devaluation

Lowering the value of a nations currency relative to other currencies

78

Countertrading

Forms of bartering goods or services

Ex. Pepsi trades drinks for Russian vodka

79

Trade protectionism

Government regulations that limit imports

80

Tariffs

Tax imposed on imports

81

Import quota

A limit on the number of products in certain categories that a nation can import

82

Embargo

A complete ban on the import or export of a certain product

83

General Agreement on Tariffs and Trade (GATT)

In 1948, an international forum for negotiating mutual reductions in trade restrictions

84

World trade organization (WTO)

replaced the GATT and was assigned to mediate trade disputes

85

Common market

A regional group of countries that have a common external tariff

86

North American free trade agreement (NAFTA)

Created a free trade area among the United States, Canada, and Mexico

87

Ethics

Standards of moral behavior accepted by society as right vs wrong

88

Compliance-based ethics codes-

ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers

89

Integrity-based ethics codes

Ethical standards that define the organization's guiding values. Stresses shared accountability between employees

90

Whistleblowers

Insiders who report illegal or unethical behavior

91

Corporate social responsibility (CSR)

A business's concern for the welfare of society

92

Corporate philanthropy

The dimension of social responsibility that includes charitable donations

93

Corporate social initiatives

Enhanced forms of corporate philanthropy directly related to the company's competencies

94

Corporate responsibility

The dimension of social responsibility that refers to the position a firm takes on in social and political issues

95

Insider trading

An unethical activity in which insiders use private company information to further their own fortunes or fortunes of family and friends

96

Social audit

A systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs

97

Sole proprietorship

A business that is owned and usually managed by one person

98

Partnership

A legal form of business with 2 or more owners

99

Corporation

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

100

Unlimited liability

The responsibility of business owners for all of the debts from its owners

101

General partnership

All owners share divided debt and responsibility

102

Limited partner

An owners who invests money in the business but does not have any management responsibility for losses beyond the investment

103

Limited liability

The responsibility of a business's owners for losses only up to the amount they invest

Ex: shareholders

104

Master limited partnership (MLP)

A partnership that acts like a corporation (is traded on a stock exchange) but is taxed like a partnership, this avoiding corporate income tax

105

Limited liability partnership (LLP)

A partnership that limits partners risk of losing their personal assets to only their own acts and omissions

106

Conventional "c" corporation

A state chartered legal entity with authority to act and have liability separate grind its owners

107

S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorship and partnerships

108

Limited liability company

A company similar to a s corporation but without the requirements

109

Merger

Result of 2 firms forming one company

110

Acquisition

One company's purchase of the property and obligations of another company

111

Vertical merger

The joining of 2 companies involved in different stages of related businesses

Ex. Soft drink company buys an artificial sweetener company

112

Horizontal merger

The joining of 2 firms in the same industry

Ex. Soft drink company buys a mineral water company

113

Conglomerate merger

The joining of firms unrelated but offers benefits

Ex.soft drink company buys a snack food company

114

Cooperative

A business owned and controlled by the people who use it; producers, consumers, or workers with similar needs who pool their resources for mutual gain

115

Entrepreneurship

Accepting the risk of starting and running a business

116

Entrepeneurial 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.

117

Microoreneurs

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 them a balanced lifestyle

118

Affiliate marketing

An Internet based marketing strategy in which a business rewards Individuals or other businesses for each visitor or customer the affiliate sends to its website

Ex. Bloggers receive free clothes of clothing websites to get their brand out.

119

Enterprise zones

Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support

120

Business plan

A detailed written statement that describes the nature of the business, the advantages, the resources, and the qualifications.

121

Venture capitalists

Individuals of companies that invest in new businesses in exchange for partial ownership of this businesses

122

Small business administration (SBA)

A US government agency that advises and assists small businesses by providing management training and financial advice and loans

123

Management

The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources

124

Planning

A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives

125

Organizing

A management function that includes designing the structure of the organization and creating a system in each everyone and thing works together

126

Leading

Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve goals

127

Controlling

A management function that involves establishing clear standards to determine whether or not there is progression.

128

Vision

An encompassing explanation of why the organization exists and where it's trying to head

129

Mission statement

An outline of the fundamental purposes of an organization

130

Goals

The broad, long term accomplishments an organization wishes to attain

131

Objective

Specific short term statements detailing how to achieve the organization goals

132

SWOT ANALYSIS

S-trengths W-eaknesses O-ppurtunities T-hreats

A planning tool used to analyze an organizations

133

SWOT STRENGTHS TO VIEW

strengths- competencies
An acknowledged leader
Functional areas
Proven management
Cost advantages
Effective advertisinng

134

SWOT WEAKNESSES

weaknesses- no strategic direction
Obsolete facilities
Subpar profitability
Lack of managerial depth and talent
Weak market image
Too narrow a product line

135

SWOT POTENTIAL OPPUTINITIES

Ability to serve additional customer groups
Expand product lines
Ability to transfer skills to new products
Falling trade barriers in attractive foreign markets
Complacency among rival firms
Ability to grow due to increasing in market demand

136

SWOT EXTERNAL THREATS

Entry of lower cost foreign competitors
Rising sales on substitute product
Slower market growth
Costly requirements
Vulnerability to recession
Changing buyer needsj

137

Strategic planning

The process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals

138

Tactical planning

The process of developing short term statements about was is to be done

139

Operational planning

The process of setting work standards and schedules necessary to implement the company's tactical objectives

140

Contingency planning

The process of preparing alternative courses of action that may be used if the primary plans don't achieve meeting objectives

141

Decision making

Choosing among two or more alternatives

142

Problem solving

The process of solving the everyday problems that occur. Problem solving is less formal than decision making

143

Brainstorming

Coming up with as many solutions as possible in a short period of time

144

PMI

Plus and minus chart

145

Organizational chart

A visual device that shows relationships among people and divides the organization's work; it shows who reports to whom

146

Top management

Highest level of management consisting of the president and other key company executives who develop strategic plans

147

Middle management

The level of management that includes general managers, division managers, and branch and plant managers who are responsible for tactical planning

148

Supervisory management

Managers who are directly responsible for supervising workers and evaluating their daily performance

149

Technical skills

Skills that involve the ability to perform tasks in a specific discipline or department

150

Human relations skills

Skills that involve communication and motivation

151

Conceptual skills

Skills that involve the ability to picture the organization as a whole

152

Staffing

A management function that includes hiring, motivating, and retaining the best people

153

Transparency

The presentation of a company's facts and figured in a way that is clear for the stakeholders

154

Autocratic leadership

Making managerial decisions without consulting others

155

Participative (democratic) leadership

Consists of managers and employees working together to make decisions

156

Free reign leadership

Managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives

157

Enabling

Giving workers the education and tools they need to make decisions

158

Knowledge management

Finding the right information, keeping the information in an accessible place, and making information know to everyone

159

External customers

Dealers who buy products to sell to others, and ultimate customers, who buy products for their own personal use

160

Internal customers

Individuals and units within the firm that receive services from other units

161

economies of scale

the situation which companies can reduce their production costs if they purchase raw materials in bulk; the average cost of goods goes down as production levels increase

162

Fayol's Principles of Organization

Division of Labor
Hierarchy of Authority- (know who you report to)
Unity of Command- (1 and only 1 boss)
Subordination of individual interest to general interest- (goals as a TEAM)
Authority- (managers can give orders) ** whenever authority is exercised, responsibility arises.
Degree of Centralization- Specific and fixed responsibility to certain people in top management
Clear communication
Order
Equity- treat employees with respect

163

Max Weber's Principles

employees need to do what they are told

addition to Fayol:
-job descriptions
-written rules
-consistent procedures
-staffing and promotion based on QUALITY

164

hierarchy

one personal at the top with a rank from top to bottom of managers who are responsible to a person

165

chain of command

the line of authority that moves from the top of hierarchy to bottom

166

bureaucracy

an organization with many layers of managers who set rules and regulations and oversee all decisions

167

centralized authority

an organization structure in which decision-making authority is maintained at the top level of management

168

decentralized authority

an organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarter management could be

169

span of control

the optimal number of subordinates a manager supervises or should supervise

170

tall organization structure

an organizational structure in which there are various levels of managers

171

flat organization structure

an organizational structure that has few levels of management

172

departmentalization

the dividing of organizational functions into separate units

173

line organization

an organization that has direct 2-way lines of responsibility, with all people reporting to only one supervisor.

*** hard to use in large businesses

174

line personnel

employees who are part of the chain of command that is responsible for achieving organizational goals

175

staff personnel

employees who advise and assist line personnel

176

matrix organization

specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure

177

cross-functional self-managed teams

groups of employees who work together on a long-term basis.

178

networking

using communications technology and other means to link organizations and allow them to work together

179

real time

the present moment

180

virtual corporation

a temporary networked organization made up of replaceable firms that join and leave as needed

181

benchmarking

comparing an organization's practices,processes, and products against the world's best

182

core competencies

those functions that the organization can do as well as or as better than any other organization in the world

183

digital natives

young people who grew up on the internet

184

restructuring

redesigning an organization to be more effective

185

inverted organization

an organization that has contacted people at the top and the chief executive officer at the bottom

186

organizational (corporate) culture

widely shared values within an organization that achieves common goals and provide unity

187

formal organization

the structure that details lines of responsibility, authority, and position.

188

informal organization

the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority