Chapter 3 Flashcards
(26 cards)
refers to the impersonal laws of supply and demand that dictate what firms can and cannot do
market
which includes both the prevailing philosophy and objectives of the various levels of government, as well as their ongoing laws and regulations.
politico-legal environment
is distinct from other economic systems because of its emphasis on rewarding entrepreneurs for profitably combining resources in ways that create valued goods and services
capitalism
is characterized by its emphasis on: detailed contracts, public financial reports, management independence and rights, stringent anti-trust legislation, rewarding a labor force that is mobile and has transferable skills, short-term maximization of financial performance, and the use of stock options to motivate managers
documentational capitalism
is characterized by its emphasis on: relational contracts, the long-term reputation and financial performance of organizations, employee rights, satisfying the needs of many different stakeholder groups, and investment in developing the skills of employees.
relational capitalism
refers to understanding how goods and services are produced, distributed, and consumed
economics
which refers to the management of property and wealth in such a way that the short-term monetary value for owners is maximized
acquisitive economics
which refers to managing property and wealth to maximize monetary value for owners while simultaneously reducing negative socio-ecological externalities for key stakeholders
hybrid economics
which refers to managing property and wealth to increase the long-term overall well-being for owners, members, and other stakeholders
sustenance economics
that is, opportunities to get paid by an organization in return for doing work that produces goods and services
jobs
refers to the growth in the total goods and services created after taking into account the number of hours worked.
net productivity
which is enough money to pay for the basic amenities of life, including adequate housing, food, clothing, education, and health care
living wage
which measures the total financial value of all the goods and services produced within a country
gross domestic product (GDP)
are contracts that are based on the performance of an asset, but do not include the asset itself
derivatives
The word profit is used here in its most general sense, namely to indicate that there is a “proper fit” (pro-fit)
between value creation and value capture
a measure of quality of life based on the following elements
genuine progress indicator
refers to the difference between a firm’s financial expenses and its financial revenues
conventional profit
refers to the difference between a firm’s financial expenses and its financial revenues after taking into account its socio-ecological externalities.
genuine profit
refers to the idea that goods and services can flow across national and international boundaries without financial barriers (i.e., tariffs, quotas, or subsidies).
free trade
which refers to changes in economics, technology, politics, and culture that result in increasing interdependence and integration among organizations and people around the world
globalization
which tries to ensure that workers in low-income countries are paid a fair price for the products they produce
fair trade
which are taxes on goods or services entering a country
tariffs
place restrictions on the quantity of specific goods or services that can be imported (or exported)
quotas
are direct or indirect payments to domestic businesses that help them compete with foreign companies.
subsidies
