Business Ownership

Goods and services production

The means through which goods and services are produced.

Opportunity cost

The value of the next-best alternative that you did not choose.

Command economy

Personal economic freedom is most limited in a command economy.

Consumer

An example of a consumer is someone who purchases goods for personal use.

Economic recovery characteristics

Includes increased consumer spending, low unemployment rates, and rising production.

Inflation benefits

Inflation can be good when it leads to increased consumer spending.

Federal Funds Rate

The interest rate financial institutions are charged to borrow funds from Federal Reserve Banks.

Bondholders

People who buy bonds.

National debt

The amount a country owes to other countries.

Infrastructure

Refers to a country's physical and organizational structures and facilities.

Trade barriers

Tend to discourage international trade.

Joint venture

An agreement between two or more companies to share a business project.

Diversity and inclusion

Removing workplace barriers for women and accommodating employees who are physically challenged.

Antitrust laws

Government attempts to prevent monopolies.

U.S. government

The single largest employer in the U.S. economy.

Contracts

Facts about contracts include that they are legally binding agreements.

Sole proprietorship

The easiest form of business to start.

Business direction

Comes from its mission or vision statement.

Joint venture

A unique business organized by two or more other businesses for a specific project.

Matrix organizational structure

A structure where employees report to multiple managers.

Entrepreneurs

Examples of entrepreneurs include inventors and business founders.

Characteristics of successful entrepreneurs

Include risk-taking, resilience, and creativity.

Business plan components

Include the business idea, ownership structure, and long-term goals.

Small business characteristics

Include being independently owned and operated, not dominant in the market.

Respectful leadership

Carol’s employees accomplish tasks because they respect and trust her.

Inter-office communication

Alex writing a memo to Bethany is an example of inter-office communication.

Chief Operating Officer

An example of a high-level management position.

Ethical behavior

Conduct that conforms to accepted standards of right and wrong.

Human resource goals

Include recruiting, training, and employee development.

Job analysis

A specific study of a job to identify detailed duties and skill requirements.

Civil Rights Act of 1964

Legislation that outlaws discrimination based on race, color, religion, sex, or national origin.

Manager and employee goals

Managers and employees may have different goals.

Performance evaluations

Purpose is to assess employee performance and provide feedback.

Human resources

The personnel of a business, including employees and workforce.

Leadership equality

Good leaders may treat individuals differently based on their unique needs.

Employee engagement

It's important to involve employees in decision-making to increase buy-in and satisfaction.

Reasons for small business failure

Include lack of capital, poor management, and market competition.

Business funding sources

Most money needed to start small businesses comes from personal savings.

Policy vs. procedure

A policy is a guideline while a procedure is a specific method to achieve that guideline.

Unity of command

The principle that each employee should report to one supervisor.

Monopoly

Exists when a single company dominates a market.

OSHA

Occupational Safety and Health Administration, which ensures safe working conditions.

World Trade Organization

Created in 1995 to regulate international trade.

Free trade zone

An area where goods can be imported and exported without tariffs.

Domestic business

Business transactions conducted within a country.

Corporate bond

A bond issued by a corporation to borrow money from investors.

Command economy vs. market economy

A command economy is controlled by the government; a market economy is driven by supply and demand.

GDP

Gross Domestic Product; measures the economic performance of a country.

Basic economic problem

Scarcity; limited resources to satisfy unlimited wants.

Right of private property

Legal right to own and use property as one sees fit.

Business cycle phases

Includes expansion, peak, recession, and recovery.

Manufacturing relocation pros and cons

Advantages include lower costs; disadvantages include job loss in the home country.

Types of taxes

Include income tax, sales tax, and property tax.

Bond definition

A bond is a loan made to an entity; sold to raise capital.

Entrepreneurial business closure reasons

Include lack of market demand, financial issues, and competition.

Managerial functions

Include planning, organizing, leading, and controlling.

Absolute advantage

The ability of a party to produce more of a good or service than competitors.

Bond

A fixed income instrument representing a loan made by an investor to a borrower.

Comparative advantage

The ability of a party to produce a good at a lower opportunity cost than another.

Contract

A legally enforceable agreement between two or more parties.

Controlling

The management process of monitoring performance and making adjustments.

Copyright

The legal right to control the use and distribution of creative works.

Depression

A prolonged period of economic downturn.

Embargo

A government order that restricts trade with specific countries.

Goods producing businesses

Businesses focused on manufacturing products.

Human resources

The personnel involved in the management of a company.

Implementing

The process of putting plans into action.

Intermediary

A middleman that facilitates transactions between buyers and sellers.

Intrastate commerce

Trade conducted within a single state.

Natural resources

Raw materials that are found in nature and used for production.

Organizing

The process of arranging resources to achieve efficient results.

Patent

A legal right granted for an invention, giving the inventor exclusive rights.

Planning

The process of setting goals and determining how to achieve them.

Policies

Guidelines designed to influence decisions and actions.

Procedures

The specific methods employed to express policies in action.

Producers

Individuals or businesses that create goods or services.

Productivity

The efficiency of production measured as the output per unit of input.

Prosperity

A state of flourishing or thriving, especially in financial or economic terms.

Quota

A government-imposed trade restriction limiting the number or monetary value of goods.

Recession

A period of economic decline typically defined as two consecutive quarters of negative growth.

Scarcity

The state of being in short supply; a situation in which demand exceeds supply.

Services

Tasks performed for others as an economic activity, often intangible.

Service producing businesses

Businesses that focus on providing services instead of goods.

Staffing

The process of recruiting, hiring, and training employees.

Tariff

A tax imposed on imported goods and services.