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Intro to Business > Chapter1/2/3 > Flashcards

Chapter1/2/3 Flashcards

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0
Q

Global business environment

A

International forces that affect a business

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1
Q

Domestic Business Environment:

A

Environment in which a firm conducts its operations and derives its revenues.

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2
Q

Technological business environment

A

All the ways by which firms create value for their constituents

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3
Q

Political-Legal Business Environment:

A

Relationship between business and govt.

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4
Q

Sociocultural business environment:

A

The customers,mores, values, and demographic characteristics of the society in which an organization functions.

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5
Q

Economic Business Environment

A

Relevant conditions that exist in the economic system in which a company operates.

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6
Q

List the Factors of production: (resources used in the production of goods and services)

A
  • Labor
  • capital
  • entrepreneurs
  • physical resources
  • information resources.
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7
Q

Types of economic systems:

A 
Planned Economy
Communism
Market Economy
Capitalism
Mixed Market
Socialism
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8
Q

Planned economy:

A

Economy that relies on a centralized government to control all/most factors of production and make all decisions.

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9
Q

Market economy:

A

Economy in which individuals control production and allocation decisions through supply and demand.

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10
Q

Communism:

A

Political system in which the govt owns and operates all factors of production.

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11
Q

Capitalism:

A

System that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive.

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12
Q

Mixed Market Economy:

A

Characteristics of both planned and market economies.

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13
Q

Privatization:

A

Process of converting govt. enterprises into privately owned companies.

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14
Q

Socialism:

A

Planned economic system in which the government owns and operates only in selected major sources of production.

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15
Q

Market Price (equilibrium)

A

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

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16
Q

Private enterprise:

A

Economic system that allows people to pursue their own interests without government restrictions

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17
Q

Perfect competition:

A

Market or industry characterized by numerous small firms producing an identical product.

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18
Q

Monopolistic competition:

A

Merely or industry characterized by numerous buyer and sellers trying to differentiate their products from those competitors.

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19
Q

Oligopoly:

A

Market or industry characterized by a handful of sellers with the power to influence the prices of their products.

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20
Q

Monopoly:

A

One producer who can set prices at will.

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21
Q

Natural Monopoly:

A

Industry in which one company can most efficiently supply all needed good or services.

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22
Q

Aggragate output:.

A

Total quantity of good/services produced by an economic system during a given period.

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23
Q

Standard of Living:

A

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

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24
Gross Domestic Product:
Total value of goods/services produced within *that* country. Domestic.
25
Gross National Product:
Total value of all goods/services produced in a country by regardless of where the factors of production are located.
26
GDP Per Capita:
GDP divided by total production.
27
Real GDP
GDP adjusted to account for changes in currency values and price changes.
28
Nominal GDP:
GDP measured in current dollars or with all components valued at current prices.
29
Purchasing Power Parity:
Principle that exchange rates are set that so the prices of similar products in different countries are about the same.
30
Consumer Price Index (CPI)
Measure of the prices of typical products purchased by consumers living in urban areas.,
31
Fiscal policies:
Policies used by government regarding how it collects and spends its revenue.
32
Monetary policies:
Policies used by a government to control the size of the money supply..
33
Stabilization policy
Government economic policy intended to smooth out fluctuations in output and unemployment to stabilize prices.
34
Managerial ethics:
Standards of behavior that guide individual managers in their work.
35
Four ethical norms:
1. Utility: does a particular act optimize the benefits to those who are affected by it? 2. Rights: does it respect the rights of all individuals involved? 3. Justice: is it consistent with what's fair? 4. Caring: is it consistent with people's responsibilities to each other?
36
Social responsibility:
Attempt of a business to balance its commitments to groups and people in its environment. (Customers, businesses, employees, investors, etc.)
37
Organizational Stakeholders:
Groups of people that are directly affected by the practices of an organization.
38
Stakeholder model of responsibility:
1: customers 2: employees 3: investors 4: suppliers 5: local communities.
39
Ethics reform needs to start,
At the "top" level with executives
40
Approaches to social responsibility:
- Obstructionist stance - defensive stance - accommodative stance - proactive stance
41
Obstructionist stance:
Approach to social responsibility that involved doing as little as possible and may involve attempts to deny or cover up violations.
42
Defensive stance:
Approach to social responsibility by which a company meets only minimal legal requirements in its commitments to groups in its social environment.
43
Accommodative stance:
Approach to social responsibility by which a company, if asked to, exceeds legal minimums it its commitment to groups in the social environment.
44
Proactive Stance:
Approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups in its social environment.
45
Regulation:
Establishment of laws and rules that dictate what organizations can and cannot do.
46
Political Action Committees (PAC)s
Special organizations created to solicit money and then distribute it to political candidates.
47
Legal compliance:
Extent to which the organization conforms to local, state, federal and international laws.
48
Ethical compliance:
Extends to which the members of an organization follow basic ethical and legal standards.
49
Small Business administration:
Government agency charged with assisting small business.
50
Small business
Independently owned business that has little influence in its market
51
55.8% of all businesses are
Services
52
Entrepreneur:
Businessperson who accepts both the risks and opportunities involved in creating and operating a new business venture.
53
Established market:
Market in which many firms compete according to relatively well-defined criteria.
54
First-mover advantage:
Any advantage that comes to a firm because it exploits an opportunity before any other firm does.
55
Franchise:
Arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)
56
Venture capital company:
Group of small investors who invest money in companies with rapid growth potential.
57
Small Business Investment Company (SBIC):
Government regulated investment company that borrows money from the SBA to invest in or lend to a small business.
58
Reasons for business failure:
- Managerial incompetence / inexperience - neglect - weak control systems - insufficient capital (ain't got cash)
59
Reasons for business success:
- hardwork, drive, and dedication. - Market demand for the products or services being provided. - managerial competence - luck
60
Sole proprietorship:
Business owned and usually operated by one person who is responsible for all of its debts.
61
Advantages of sole proprietorships:
- "own boss" - easy to form - low cost - tax benefits
62
Disadvantages of sole proprietorships:
- Unlimited liability: legal principle holding owners responsible for paying off all debts of a business. - lack of continuity (company dissolves when owner dies) - demands upon one person for many responsibilities.
63
General partnership:
Business with two or more owners who share in both the operation of the firm and the financial responsibility for debts.
64
Advantages of partnership:
-ability to grow by adding new talent and money. | -usually have partnership agreement Rules when going into business together
65
Disadvantages to partnerships:
- unlimited liability - lack of continuity if owner of one side of company dies - difficulty of transferring ownership.
66
Limited partnership:
Type of partner ship consisting of limited partners and a general partner.
67
Limited partner:
Partner who does not share in a firms management and is liable for its debts only to the limited of said partners investment.
68
General partner:,
Partner who activity manages a firm and who has unlimited liability for its debts.
69
Master Limited Partnership:
Form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits.
70
Cooperatives:
Form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits.
71
Corporation:
Business that is legally considered an entity separate from its owners and is liable for its own debts; Liability extends to the limits of their investments.
72
Limited liability:
Legal principle holding investors liable for a firms debts only to the limits of their personal investments in it.
73
Advantages of incorporation:
- limited liability. - continuity. Independent of founders/owners - sell stock for money
74
Disadvantages of incorporation:
- tender offer possibility | - double taxation
75
Tender offer:
Offer to buy shares made by a prospective buyer directly to a target corporations shareholders who then make individual decisions whether to sell.
76
Double Taxation:
Situation in which taxes may be payable both by a corporation on its profited and by shareholders on dividend incomes.
77
S corporation:
Hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for taxes purposes.
78
Limited liability corporation (LLC):
Hybrid of a publicly held corporation and a partnership in which owners are taxes as partners but enjoy the benefits of limited liability.
79
Professional corporation:
Form of ownership allowing professionals to take advantage of corporate business liability and unlimited professional liability.
80
Corporate governance:,
Roles of share holders, directors, and other managers in corporate decision making and accountability.
81
Stockholder (shareholder)
Owner of shares of stock in a corporation.
82
Board of directors:
Governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets.
83
Officers:
Top management team of a corporation
84
Chief executive officer (ceo)
Top manager who is responsible for the overall performance of a corporation.
85
Strategic alliance:
Strategy in which two or more organizations collaborate on a project for mutual gain.
86
Joint venture:
Strategic alliance in which the collaboration involves join ownership of the new venture.
87
Employee stock ownership plan:
Arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control of its voting rights.
88
Institutional investor:
Large investor, such as a mutual fund or pension fund, that purchases large blocks of corporate stock.
89
Divestiture:,
Strategy whereby a firm sells one or more of its business units. Selling of "unimportant" or unwanted part of a business.
90
Spin off:
Strategy of setting up one or more corporate units as new independent corporations.

Intro to Business (4 decks)

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