MIDTERM Flashcards
(174 cards)
1
Q
Businesses
A
Organizations that provide goods or services that are then sold to earn profits.
2
Q
Profit
A
the difference between a business’s revenues and its expenses
3
Q
External Environment
A
everything outside an organizations boundaries that may affect it
4
Q
Domestic Business Environment
A
the environment in which a firm conducts its operations and derives its revenues
5
Q
Global Business Environment
A
The international forces that affect a business
6
Q
Technological Environment
A
all the ways by which firms create value for their constituents
7
Q
Political-Legal Environment
A
the relationship between business and government
8
Q
Sociocultural Environment
A
the customs, mores, values, and demographic characteristics of the society in which an organization functions
9
Q
Economic Environment
A
Relevant conditions that exist in the economic system in which a company operates
10
Q
Economic System
A
a nation’s system for allocating its resources among its citizens
11
Q
Factors of Production
A
resources used in the production of goods and services- labor, capital, entrepreneurs, physical resources, and information resources
12
Q
Labor (Human Resources)
A
physical and mental capabilities of people as they contribute to economic production
13
Q
Capital
A
funds needed to create and operate a business enterprise
14
Q
Entrepreneur
A
individual who accepts the risks and opportunities involved in creating and operating a new business venture
15
Q
Physical Resources
A
tangible items that organizations use in the conduct of their businesses
16
Q
Information Resources
A
data and other information used by businesses
17
Q
Planned Economy
A
economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions
18
Q
Market Economy
A
Economy in which individuals control production and allocation decisions through supply and demand
19
Q
Communism
A
Political system in which the government owns and operates all factors of production
20
Q
Market
A
mechanism for exchange between buyers and sellers of a particular good or service
21
Q
Capitalism
A
system that sanctions the private ownership the factors of production and encourages entrepreneurship by offering profits as an incentive
22
Q
Mixed Market Economy
A
Economic system featuring the characteristics of both planned and market economies
23
Q
Privatization
A
process of converting government enterprises into privately owned companies
24
Q
Socialism
A
planned economic system in which the government owns and operates only selected major sources of production
25
Demand
the willingness and ability of buyers to purchase a good or survice
26
Supply
the willingness and ability of producers to offer a good or service for sale
27
Law of Demand
buyers will purchase (demand) more of a product as its price drops and less of a product as its price increases
28
Law of Supply
producers will offer (supply) more of a product for sale as its price rises and less of a product as its price drops
29
Demand and Supply Schedule
assessment of the relationships among different levels of demand and supply at different price levels
30
Demand Curve
graph showing how many units of a product will be demanded (bought) at different prices
31
Supply Curve
graph showing how many units of a product will be supplied at different prices
32
Market Price
profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal
33
Shortage
situation in which quantity demanded exceeds the quantity supplied `
34
Private enterprise
economic system that allows individuals to pursue their own interest without undue governmental restriction; private property rights, freedom of choice, profits, competition
35
Competition
when businesses compete for the same resources or customers
36
Perfect competition
market or industry characterized by numerous small firms producing an identical product; small firms in great quantity.
37
Monopolistic Competition
market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their products from those of competitors
38
Oligopoly
market or industry characterized by a handful of (generally large) sellers with the power to influence the prices of their products
39
Monopoly
market or industry in which there is only one producer that can therefore set the prices of its products
40
Natural Monopoly
industry in which one company can most efficiently supply all needed goods and services
41
Economic Indicators
statistics that help assess the performance of an economy
42
Business Cycle
short-term pattern of economic expansions and contractions
43
Aggregate Output
the total quantity of goods and services produced by an economic system during a given period
44
Standard of Living
the total quantity and quality of goods and services people can purchase with the currency used in their economic system.
45
GDP (Gross Domestic Product)
total value of all goods and services produced within a given period by a national economy through domestic factors of production
46
GNP (Gross National Product)
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
47
GDP per Capita
GDP per individual person;gross domestic product divided by total population
48
Real GDP
GDP adjusted to account for changes in currency values and price changes
49
Nominal GDP
GDP measured in current dollars or with all components valued at current prices
50
Purchasing Power Parity (PPP)
the principle that exchange rates are set so that the prices of similar products in different countries are about the same
51
Productivity
a measure of economic growth that compares how much a system produces with the resources needed to produce it
52
Balance of Trade
the economic value of all the products that a country exports minus the economic value of all the products it imports
53
National Debt
the amount of money the government owes its creditors
54
Stability
condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate
55
Inflation
occurs when widespread price increases occur throughout an economic system
56
Consumer Price Index
a measure of the prices of typical products purchased by consumers living in urban areas
57
Unemployment
the level of joblessness amount people actively seeking work in an economic system
58
Recession
a period during which aggregate output, as measured by GDP, declines
59
Depression
a prolonged and deep recession
60
Fiscal Policies
policies used by a government regarding how it collects and spends revenue
61
Monetary Policies
policies used by a government to control the size of its money supply
62
Stabilization Policy
government economic poly intended to smooth out fluctuations in output and unemployment and to stabilize prices
63
Business Ethics
ethical or unethical behaviors by employees in the context of their jobs
64
Managerial Ethics
Standards of behavior that guide individual managers in their work
65
Social Responsibility
the attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities
66
Organizational Stakeholders
those groups individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance
67
Stakeholder Responsibility (5 groups)
```
(SLICE)
Suppliers
Local communities
Investors
Customers
Employees
```
68
Consumerism
form of social activism dedicated to protecting the rights of consumers in their dealings with business
69
Collusion
illegal agreement between two or more companies to commit a wrongful act
70
Whistle-blower
employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible actions by publicizing them
71
Insider Trading
illegal practice of using special knowledge about a firm for profit or gain
72
Obstructionist Stance (social responsibility)
approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations
73
Defensive Stance (social responsibility)
approach to social responsibility that a company meets only minimum legal requirements in its commitments to groups and individuals in its social environment
74
Accommodative Stance (social responsibility)
approach to social responsibility by which a company, if asked to do so, exceeds minimum legal commitment to groups and individuals in its social environment
75
Proactive Stance (social responsibility)
approach to social responsibility by which a company actively seeks opportunities to contribute to the well being of groups and individuals in its social environment
76
Regulation
the establishment of laws and rules that dictate what organizations can and cannot do
77
Direct Regulation
government creates agencies to monitor and control certain areas of business activity
78
Indirect Regulation
Government can influence how organizations spend their social responsibility dollars by providing greater or lesser tax incentives.
79
Lobbying
the use of persons or groups to formally represent an organization or group of organizations before political bodies
80
Political Action Committees (PAC)
special organizations created to solicit money and then distribute it to political candidates
81
Legal Compliance
the extent to which the organization conforms to local, state, federal, and international laws
82
Ethical Compliance
the extent to which the members of the organization follow basic ethical and legal standards of behavior
83
Philanthropic Giving
the awarding of funds or gifts to charities or other worthy causes
84
Corporate Social Audit
systematic analysis of a firm's success in using funds earmarked for meeting its social responsibility goals
85
Small Business Administration (SBA)
government agency charged with assisting small businesses
86
Small Business
independently owned business that has relatively little influence in its market
87
Entrepreneur
businessperson who accepts both the risks and opportunities involved in creating and operating a new business venture
88
Entrepreneurship
the process of seeking businesses opportunities under conditions of risk
89
Importance of Small Business
creates jobs, introduces new, major innovations, and most products made by big business are sold to consumers by the small businesses
90
Areas of Small Businesses (7)
Services, Retailing, Construction, Wholesaling, Finance and Insurance, Manufacturing, and Transportation
91
Established Market
one in which many firms compete according to relatively defined criteria
92
Niche
segment of a market that is not currently being exploited
93
First-Mover Advantage
any advantage that comes to a firm because it exploits an opportunity before any other firm does
94
Business Plan
document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how that strategy will be implemented
95
Franchise
arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser)
96
Venture Capital Company
group of small investors who invest money in companies with rapid growth potential
97
Small Business Investment Company (SBIC)
government regulated investment company that borrows money from the SBA to invest in or lend to a small business
98
Small Business Development Center (SBDC)
SBA program designed to consolidate information from various disciplines and make it available to small businesses
99
Reasons For Business Failure (4)
Managerial incompetence or inexperience
Neglect
Weak control system
Insufficient Capital
100
Reasons for Business Success (4)
Hard work, drive, and dedication
Market demand for the products or services
Managerial Competence
Luck
101
Sole Proprietorship
business owned and usually operated by one person who is responsible for all of its debts
102
Advantages v. Disadvantages of Sole Proprietorships
Advantages
freedom
easy to form
tax benefits
Disadvantages
unlimited liability
depends on resources of one person
hard to borrow money
103
Unlimited Liability
legal principle holding owners responsible for paying off all its debts of a business
104
General Partnership
business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts
105
Advantages v. Disadvantages of Partnerships
Advantages
make it easy to borrow money
can invite new partners to join by investing
can be organized by meeting only a few legal requirements
Disadvantages
unlimited liability
potential lack of continuity
difficulty with transferring ownership
106
Limited Partnership
type of partnership consisting of limited partners and a general (or managing) partner
107
Limited Partner
Partner who does not share in a first management and is liable for its debts only to the limits of said partner's investment
108
General Partner
partner who actively manages a firm and who has unlimited liability for its debts
109
Cooperatives
form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits
110
Master Limited Partnership
form of ownership that sells shares to investors who receive profits and that pays taxes on income from profits
111
Corporation
business that is legally considered an entity separate from its owners and is liable for its own debts; owners liability extends to the limits of their investments
112
Limited Liability
legal principle holding investors liable for a firm's debts only to the limits of their personal investments in it
113
Tender Offer
offer to buy shares made by a prospective buyer directly to a target corporation's shareholders, who then make individual decisions about whether to sell
114
Double Taxation
situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes
115
Advantages v. Disadvantages of Corporations
Advantages
limited liability
continuity
can raise money through sales of stocks
Disadvantages
tender offer- company can be taken over against managements will
start-up cost
double taxation
116
Private (Closely Held) Corporation
corporation whose stock is help by only a few people and is not available for sale to the general public
117
Public (Publicly Held) Corporation
corporation whose stock is widely held and available for sale to the general public
118
S Corporation
hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes
119
Limited Liability Corporation (LLC)
hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability
120
Professional Corporation
form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability
121
Multinational corporation
form of corporation spanning national boundaries
122
Corporate Governance
roles of shareholders, directors, and other managers in corporate decision making and accountability
123
Stockholder
owner of shares of stock in a corporation
124
Board of Directors
governing boy of a a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets
125
Officers
top management team of a corporation
126
Strategic alliance
strategy in which two or more organizations collaborate on a project for mutual gain
127
Joint Venture
Strategic alliance in which the collaboration involves joint ownership of the new venture
128
Employee Stock Ownership Plan (ESOP)
arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control its voting rights
129
Institutional Investor
large investor that purchases large blocks of corporate stocks
130
Merger
the union of two corporations to form a new corporation
131
Acquisition
the purchase of one company by another
132
Divestiture
strategy whereby a firm sells one or more of its business units
133
Spin-off
strategy of setting up one or more corporate units as new, independent corporations
134
Globalization
process by which the world economy is becoming a single interdependent system
135
Import
product made or grown abroad but sold domestically
136
Export
product mad or grown domestically but shipped and sold abroad
137
Association of Southeast Asian Nations (ASEAN)
organization for economic, political, social, and cultural cooperation among Southeast Asian nations
138
General Agreement on Tariffs and Trade (GATT)
international trade agreement to encourage the multilateral reduction or elimination of trade barriers
139
World Trade Organization (WTO)
organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices
140
Balance of Trade
economic value of all products a country exports minus the economic value of all products it imports
141
Trade Deficit
situation in which a country's imports exceed it's exports, creating a negative balance of trade
142
Trade Surplus
situation in which a country's exports exceed it's imports, creating a positive balance of trade
143
Balance of Payments
flow of all money into or out of a country
144
Exchange Rate
rate at which the currency of one nation can be exchanged for the currency of another nation
145
Euro
a common currency shared among most members of the EU (excluding Denmark, Sweden, and the United Kingdom)
146
Absolute Advantage
the ability to produce something ore efficiently than any other country can
147
Comparative Advantage
the ability to produce some products more efficiently than others
148
National Competitive Advantage
international competitive advantage stemming from a contribution of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries
149
Outsourcing
the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services
150
Offshoring
the practice of outsourcing to different countries
151
Exporter
firm that distributes and sells products to one or more foreign countries
152
Importer
firm that buys products in foreign markets and then imports them for resale in its home country
153
International Firm
firm that conducts a significant portion of its business in foreign countries
154
Multinational Firm
firm that designs, produces, and markets products in many nations
155
Independent Agent
foreign individual or organization that agrees to represent an exporter's interests
156
Licensing Agreement
arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country
157
Branch Office
foreign office set up by an international and multinational firm
158
Strategic Alliance
arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner's country
159
Foreign Direct Investment (FDI)
arrangement in which a firm buys or establishes tangible assets in another country
160
Social Orientation
a person's beliefs about the relative importance of the individual versus groups to which that person belongs
161
Power Orientation
the beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations
162
Uncertainty Orientation
the feeling individuals have regarding uncertain and ambiguous situations
163
Goal Orientation
the manner in which people are motivated to work toward different kinds of goals
164
Time Orientation
the extent to which members of a culture adopt a long-term versus short-term outlook on work, life and other elements of society
165
Quota
restriction on the number of products a certain type that can be imported into a country
166
Embargo
government order banning exportation or importation of a particular product or all products from a particular country
167
Tariff
tax levied on imported products
168
Subsidy
government payment to help a domestic business compete with foreign firms
169
Protectionism
practice of protecting domestic business against foreign competition
170
Local Content Law
law requiring that products sold in a particular country be at least partly made there
171
Business Practice Law
law or regulation governing business practices in given countries
172
Cartel
association of producers whose purpose is to control supply and prices
173
Dumping
practice of selling a product for less than the cost of production
174
B Corporations
Organization that seeks profits but performance is not only measured by profits and growth, but by impact on society
Ex. Red Cross, American Cancer Society
