BUS 101 10-pg handout Flashcards

Terms Definitions
Business
organization that provides goods or services to earn profits
profit
difference between a business's revenues and its expenses
external environment
everytihng outside an organizations boundaries that might affect it
economic system
a nation's system for allocating its resources among its citizens
factors of production
resources used in the production of goods and services - labor, capital, entrepreneurs, physical resources, and information resources
labor (human resources)
physical and mental capabilities of people as they contribute to economic production
capital
funds needed to create and operate a business enterprise
entrepreneur
indvidual who accepts the risks and oppurtunities involved in creating and operating a new business venture
planned economy
economy that relies on a centralized government to control all of most factors of production and to make all or most production and allocation decisions
communism
political system in which the government owns and operates all factors of production
market economy
economy in which individuals control production and allocation decisions through supply and demand
market
mechanism for exchange between buyers and sellers of a particular good or service
capitalism
system that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive
privatization
process of converting government enterprises into privately owned companies
socialism
planned economic system in which the goovernment owns and operates only selcted major sources of production
demand
willingness and ability of buyers to purchace a good or service
supply
the willingness and ability of producers to offer a good or service for sale
private enterprise
economic system that allows individuals to pursue their own interests without undue governmental restriction
competition
vying among businesses for the same resources or customers
perfect competition - give example
market or industry characterized by numerous small firms producing an identical product ex (gas stations)
monopolistic competition - give example
market or industry characterized by numerous buyers and relatiely numerous sellers trying to differentiate their products from those of competitors (auto industry)
monopoly - give example
market or industry in which there is only one producer that can therefore set the prices of its products (freshman housing)
natural monopoly
industry in which one company can most efficiently supply all needed goods or services
standard of living
the total quantity and quality of goods and services people can purchace with the currency used in their economic system - varies in the world
gross domestic product (GDP)
total value of all goods and services produced within a given period by a national economy through domestic factors of production (no under the table)
gross national product (GNP)
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
real GDP
gross domestic product (GDP) adjusted to account for changes in curency values and prices changes
purchasing power parity
the principle that exchange rates are set so that the prices fo similar products in different countries are about the same
inflation
occurs when widespread price increases occur throughout an economic system
unemployment
the level of joblessness among people actively seeking wok in an economic system
recession
a period furing which aggregate output, as measured by GDP, declines
depression
a prolonged and deep recession
ethics
beliefs about what is right or wrong and good or bad in actions that affect others
ethical behavior
behavior conforming to generally accepted social norms concerning beneficial and harmful actions
unethical behavior
behavior that does not conform to generally accepted socail norms concerning beneficial and harmful actions
business ethics
ethical or unethical behaviors by employees in the context of their jobs
managerial ethics
standards of behavior that guide indiviual managers in their work
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 communiites
organizational stakeholders
those groups, individuals, and organizations that are directly affected by the practices of an organization and who therfore have a stake in its performance
whistle-blower
employee who detects and tries to put an end to a company's unethical, illegal, or socially irresponsible actions by publicizing them
insider trading
illegal practice of using special knowledge about a firm for profit or gain
small business administration (SBA)
government agency charged with assisting small businesses
small business
independently owned business that has relatively little influence in its market
business plan
document in which an entrepreneur summarizes her or his business strategy for a proposed new venture and how that strategy will be implemented
franchise - example
arrangement in which a buyer purchases the right to sell the good or service of the seller
venture capital company
group of small investors who invest money in companies with rapid growth potential
sole proprietorship
business owned and usually operated by one person who is responsible for all of its debts
unlimited liability
legal principle holding owners responsible for paying off all debts of a business
general partnership
business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts
limited partnership
type of partnership consisting of limited partners and a general (or active) partner
general (or active) partner
partner who actively manages a firm and who has unlimited liability for its debts
corporation
business that is legally considered an entity separate from its owners and is liable for its own debts; owners' liabilities extend to the limits of their investments
limited liability
legal principle holding investors liable for a firm's debts only to the limits of their personal investments in it
closely held (or private) corporation
corporation whose stock is held by only a few people and is not available for sale to the general public
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
limmited liability corpoeration (LLC)
hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoythe benefits of limited liability
multinational (or transnational) corporation
form of corporation spanning national boundaries
stockholder (or shareholder)
owner of shares of stock in a coporation
corporate governance
roles of shareholders, directors, and other managers in corporate decision making and accountability
board of directors
governing body of a corporation that reports to its shareholders and delegates poer to run its day-to-day operations while remaining responsible for sustaining is assets
officers
top management team of a corporation
chief executive officer (CEO)
top manager who is responsible for the overall performance of a corporation
strategic alliance
strategy in which two or more organizations collaborate on a project for mutual gain
joint venture
strategic alliance in which the collaboration inolves joint ownership of the new venture
merger
the union of two corporations to form a new corporation
acquisition
the purchase of one company by another
divestiture
strategy whereby a firm sells one or more of its business units
import
product made or grown abroad but sold domestically
export
product made or grown domestically but shipped and sold abroad
globalization
process by which the world economy is becoming a single interdependent system
North American Free Trade Agreement (NAFTA)
agreement to gradually eliminate tariffs and other trade barriers among the US, Canada, and Mexico
European Union (EU)
organization for economic, social, and securtiy cooperation among Eurpean nations (stronger then NAFTA)
World Trade Organization (WTO)
organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices
outsourcing
the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services
management
process of planning, organizing, leading, and controlling and organization's resources to achieve its goals
planning
management process of determining what an organization needs to do and how best to get it done
organizing
management process of determining how best to arrange an organization's resources and activities into a coherent structure
leading
management process of guiding and motivating employees to meet an organization's objectives
controlling
management process of monitoring an organization's performance to ensure that it is meeting its goals
top manager
manager reponsible for a firm's overall performance and effectiveness
middle manager
manager reposnsible for implementing the strategies and working toward the goals set by top managers
first-line manager
manager responsible for supervising the work of employees
decision-making skills
skills in defining problems and selecting the best courses of action
goal
objective that a business hopes and plans to achieve
strategy
broad set of organizational plans for implementing the decisions made for achieving organizational goals
mission statement
organization's statement of how it will achieve its purpose in the environment in which it conducts its business
long-term goal
goal set for an extended time, typically five years or more into the future
short-term goal
goal set for the very near future
corporate strategy
strategy for determining a firm's overall attitude toward growth and the way it will manage its businesses or product lines
business (or competitive) strategy
strategy, at the business-unit or product-line livel, focusing on improving a firm's competitive position
functional strategy
strategy by which managers in specific areas decide how best to achieve corporate goals through productivity
swot analysis
identification and analysis of organizational strenghths and weaknesses and environmental opportunities and threats as part of strategy formulation
environmental analysis
process of scanning the business environment for threats and opportunities
crisis managemnet
organization's methods for dealing with emergencies
organizational structure
specification of the jobs to be done within an organization and the ways in which they relate to one another
organization chart
diagram depicting a company's structure and showing employees where they fit into its operations
chain of command
reporting realtionships within a company
span of control
number of people supervised by one manager
delegation
process through which a manager allocates work to subordinates
flat organizational structure
characteristic of descentralized companies with relatively few layers of management
tall organizational structure
characteristics of centralized companies with multiple layers of management
centralized organization
organization in which most decision-making authority is delegated to level sof management at points below the top
decentralized organization
organization in which a great deal of decision-making authority is delegated to levels of management at points below the top
authority
power to make the decisions necessary to complete a task
accountability
obligation employees have to their manager for the successful completion of an assigned task
committee and team authority
authority granted to committees or teams involved in a firm's daily operations
service operations (service production)
activities producing intangible and tangible products, such as entertainment, transportation, and education
goods operations (goods production)
activities producing tangible products, such as radios, newspapers, buses, and textbooks
operations (productions)
activities involved in making products - goods and services - for customers
quality
the combination of "characteristics of a product or service that bear on its ability to satisfy stated or implied needs"
quality control
the action of ensuring that operations produce products that meet specific quality standards
supply chain (value chain)
flow of information, materials, and services that starts with raw-materials suppliers and continues adding value through other stages in the network of firms until the product reaches the end customer
supply chain management (SCM)
principle of looking at the supply chain as a whole to improve the overall flow through the system
leadership
the processes and behaviors used by someone, such as a manager, to motivate, inspire, and influence the behaviors of others
decision making
choosing one alternative from among several options
human resource management (HRM)
set of organizational activities directed at attracting, developing, and maintaining an effective workforce
benefits
compensation other than wages and salaries
sexual harassment
unwelcome sexual advances in the workplace
quid pro quo harassment
form of sexual harassment in which sexual favors are requested in return for job-related benefits
hostile work environment
form of sexual harassment deriving from off-color jokes, lewd comments, and so forth
contingent worker
employee hired on something other than a full-time basis to supplement an organization's permanent workforce
labor union
group of individuals working together to achieve shared job-related goals, such as higher pay, shorter working hours, more job security, greater benefits, or better working conditions
labor relations
process of dealing with employees who are represented by a union
marketing
the activity, set of institiutions, and processes for creating, communicating, delivering, and enhancing offerings that have value for customers, clients, partners, and society at large
consumer goods
physical products purchased by consumers for personal use
industrial goods
physical products purchased by companies to produce other products
services
products having nonphysical features, such as information, expertise, or an activity that can be purchased
substitute product
product that is dissimilar from those of competitors but that can fulfill the same need
marketing plan
detailed strategy for focusing marketing efforts on consumers' needs and wants
marketing mix
the combination of product, pricing, promotion, and place
product
good, service, or idea that is marketed to fill consumers' needs and wants
distribution (place)
part of the marketing mix concerned with getting products from producers to consumers
promotion
aspect of the marketing mix concerned with the most effective techniques for communicating information about products
target market
group of people that have similar whants and needs and can be expected to show interest in the same products
market segmentation
process of dividing a market into categories of customer types or "segments"
convenience good/convenience service
inexpensive good or service purchased and consumed rapidly and regularly
specialty good/specialty service
expensive, rarely purchased good or service
branding
process of using symbols to communicate the qualities of a product made by a particular producer
brand awareness
extent to which a brand name comes to mind when a consumer considers a particular product category
pricing
process of determining what a company will receive in exchange for its products
market share
a company's percentage of the total industry sales for a specific product type
wholesaler
intermediary who sells products to other businesses for resale to that consumer
retailer
intermediary who sells products directly to consumers
telemarketing
form of nonstore retailing in which the telephone is used to sell directly to consumers
physical distribution
activities needed to move a product effeciently from manufacturer to consumer
advertising
promotional tool consisting of paid, nonpersonal communication used by an identified sponsor to inform an audience about a product
point of sale (POS) display
sales-promotion technique in which product displays are located in certain areas to stimulate purrchase or to provide information on a product
information technology (IT)
the various appliances and devices for creating, storing, exchanging, and using information in diverse modes, including visual images, voice, multimedia, and business data
management information system (MIS)
computer system that supports managers by providing information- reports, schedules, plans, and budgets - that can be used for making decisions
intellectual property
something produced by the intellect or mind that has comercial value
accounting
comprehensive system for collecting, analyzing, and communicating financial information
audit
systematic examination of a company's accounting system to determine whether its financial reports reliably represent its operations
Sarbanes-Oxley Act of 2002
enactment of federal regulations to restore public trust in accounting practices by imposing new requirements on financial activities in publicly traded corporations
accounting equation
Assets = Liabilities + Owners' Equity; used by accountants to balance data for the firm's financial transactions at various points of the year
asset
any economic resource expected to benefit a firm or an individual who owns it
liability
debt owed by a firm to an outside organization or individual
owners' equity
amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities
financial statement
any of several types of reports summarizing a compnay's financial status to stakeholders and to aid in managerial decision making
balance sheet
financial statement that supplies detailed information about a firm's assets, liablities, and owners' equity
liquidity
ease with which an asset can be converted into cash
income statement (profit-and-loss statement)
financial statement listing a firm's annual revenues and expenses so that a bottom line shows annual profit or loss
revenues
funds that flow into a business from the sale of goods or services
debt
a company's total liabilities
earnings per share
profitabliity ratio measureing the net profit that the company earns for each share of outstanding stock
prime rate
interest rate available to a bank's most creditworthy customers
federal reserve system (FED)
central bank of the US which acts as the government's bank, serves member commercial banks, and controls the nation's money supply
world bank UN
agency that provides a limited scope of financail services, such as funding improvements in underdeveloped countries
internation monetary fund (IMF)
Un agency consisting of about 150 nations that have combined resources to promote stable exchanges, provide temporary short-term loans, and serve other purposes
stock
a portion of ownership of a corporation
common stock
the most basic form of ownership, including voting rights on major issues, in a company
dividend
payment to shareholders, on a pershare basis, out of the company's earnings
insider trading
illegal practice of using special knowledge about a firm for profit or gain
securities
stocks, bonds, and mutual funds representing secured, or asset-based, claims by investors against issuers
securities markets
markets in which stocks and bonds are sold
stock exchange
an organization of individuals to provide in institutional auction setting in which stocks can be bought and sold
interest
fee paid to a lender for the use of borrowed funds; like a rental fee
venture capital
private funds by wealthy individuals seeking investment opportunities in new growth companies
corporate bond
a formal pledge obligating the issuer (the company) to pay interest periodically and repay the principal at maturity
bankruptcy
court-granted permission for a compnay to not pay some or all debts
laws
codified rules of behavior enforced by a society
common law
body of decision handed down by courts ruling on individual cases
regulatory (administrative law)
law made by the authority of admisnistrative agencies
statutory law
created by constitution(s) or by federal, state, or local legislative acts
deregulation
elimination of rules that restrict business activity
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