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Flashcards in Chapter 2 Deck (59)
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1
Q

External environment

A

Everything outside an organization that might affect it

2
Q

Organizational boundary

A

Separates the organization from its environment

3
Q

Economic environment

A

Conditions of the economic system in which an organization operates

4
Q

Recent economic environment characteristics

A

Low growth, fairly low unemployment rates, and low inflation

5
Q

Aggregate output

A

Total quantity of goods and services produced by an economic system during a given period (basically increase in aggregate output is economic growth)

6
Q

What happens when output grows more quickly than the population

A

output per capita increases and quantity/quality of goods and services are more of what people want

7
Q

Standard of living

A

Total quantity and quality of goods and services they can purchase with the currency used in their economic system

8
Q

Business cycle

A

Pattern of short term highs and lows in an economy

9
Q

Four stages of the business cycle

A

Peak, recession, trough, recovery

10
Q

Recession

A

Two consecutive quarters of negative economic growth

11
Q

Depression

A

6-8 consecutive quarters of negative economic growth

12
Q

Gross domestic product (GDP)

A

Total value of all goods and services produced within a given period by an economy through domestic factors of production (everything made within the country)

13
Q

Canada’s GDP in 2017

A

$2.1 trillion

14
Q

Gross national product (GNP)

A

Total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located (everything made through domestic companies including those made abroad)

15
Q

GDP per capita

A

GDP per person (GDP of the country divided by the population)

16
Q

Real GDP

A

GDP adjusted for inflation

17
Q

Nominal GDP

A

GDP measured in current dollars

18
Q

Purchasing power parity

A

Exchange rates are set so that the prices of similar products in different countries are about the same. This can give us a good idea of the standard of living in different countries

19
Q

Productivity

A

Compares how much a system produces with the resources needed to produce it

20
Q

Canada’s productivity ranking

A

16th, at 48.9%

21
Q

Balance of trade

A

Value of all the products that a country exports minus its imported products

22
Q

National debt

A

Money the government owes its creditors

23
Q

Budget deficit

A

When the government is spending more money than is coming in through taxes

24
Q

Economic stability

A

Money available and quantity of goods and services are growing at the same rate

25
Q

Three factors that threaten stability

A

Inflation, unemployment, deflation

26
Q

Inflation

A

Overall and ongoing price rise in an economy

27
Q

Consumer price index (CPI)

A

Changes in the cost of a basket of goods and services that a typical family of four buys

28
Q

Deflation

A

Period of generally falling prices

29
Q

Unemployment

A

Level of people without jobs who are actively searching for work

30
Q

Frictional unemployment

A

Moving between jobs

31
Q

Seasonal unemployment

A

Out of work due to seasonal nature of their job

32
Q

Structural unemployment

A

People lack the skills necessary to perform at a job

33
Q

Cyclical unemployment

A

Out of work due to the business cycle

34
Q

Fiscal policy

A

Government collects and spends revenue

35
Q

Monetary policy

A

Government controls nation’s money supply

36
Q

Research and development (R&D)

A

New ideas for products, services, and processes (basic : general improve in knowledge, applied : focusing on a specific technological innovation)

37
Q

Technology transfer

A

Process of putting new technology in the market from the lab and capitalizing on it

38
Q

Politcal-legal environment

A

Relationship between business and government

39
Q

Socio-cultural environment

A

Customs, values, attitudes, and demographic characteristics of the society in which a company operates

40
Q

Five forces

A

Rivalry among competitors, threat of potential entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes

41
Q

Rivalry among competitors

A

Intense price competition, elaborate advertising campaigns, and an increased emphasis on customer service

42
Q

Threat of potential entrants

A

Can cause big changes depending on if the industry is easy or difficult

43
Q

Power of suppliers

A

Influenced by the number of substitute products available

44
Q

Power of consumers

A

Buyers have a great deal of bargaining power when there are few buyers and many suppliers

45
Q

Threat of substitutes

A

If many substitute products are available, the industry is more competitive

46
Q

Core competencies

A

Skills and resources used to compete best and create the most value for business owners

47
Q

Outsourcing

A

Paying suppliers to perform certain business processes or to provide needed materials

48
Q

Process

A

Activity that adds value to an input, transforming it into an output for a customer

49
Q

Business process management

A

Moving from organizing around departments and toward organizing around process-oriented team structures

50
Q

Acquisition

A

One business buys another business out

51
Q

Merger

A

One business consolidates with another

52
Q

Horizontal merger

A

When companies in the same industry merge

53
Q

Conglomerate merger

A

When companies from different industries merge

54
Q

Poison pill

A

Defense tactic adopted to make a business less attractive to a hostile suitor in a takeover attempt

55
Q

Divestiture

A

When a company decides to sell part of its existing business operations to another corporation

56
Q

Spinoff

A

When a company sets up a new unit as a new independent company because it might be more valuable that way

57
Q

Strategic alliance

A

2+ enterprises cooperating in the research, development, manufacture, or marketing of a product

58
Q

Subsidiary corporation

A

Owned by another corporation

59
Q

Parent corporation

A

Owns subsidiary corporation