Business Exam 1

business

org that strives for profit by providing goods and services to others

standard of living

measure of goods and services people can buy

quality of life

level of human happiness

risk

potential to lose time and money, not accomplish goals

cost

expenses to create and sell

factors of production

inputs required for businesses to produce goods or services

commodities (factor of production)

inputs in natural state (lumber, corn)

capital (factor of production)

tools, equipment, used to produce and get to customer

knowledge (factor of production)

combined skills of workforce

entrepreneurship (factor of production)

creating a business for profit

entrepreneurs (factor of production)

people who create businesses

economic forces

fluctuations in level of activity make cycles that affect businesses

political and legal forces

amount of government activity, laws, political stability

demographic forces

age, race, location

social forces

how a pop feels (ethics, lifestyles)

technology

science skills to solve production problems

technological forces

related to tech that affect businesses

productivity

amount of goods one worker can produce

economics

how a society uses scarce resources to produce goods

economic system

combination of policies, laws made to establish systems that determine what goods are produced

capitalism

competition and private ownership of resources

communism

government owns almost all resources and controls all markets

socialism

basics industries owned by government or private sector under government control, smaller businesses private owned

macroeconomics

study of economy as a whole

economic growth (3 economic goals)

increase in nations output of goods and services

gross domestic product

total market value of goods in a year

full employment (3 economic goals)

jobs for all who want to work and can

frictional unemployment

short term, between jobs

structural unemployment

skills not needed, technology advances

cyclical unemployment

business cycle downturn

seasonal

specific times of year

price stability (3 economic goals)

prices steady

purchasing power

value of what money can buy

monetary policy

controls amount of money circulating

contractionary policy

restricts money supply, slows growth

fiscal policy

government programs of taxation and spending

federal budget deficit

government spending exceeds tax revenues, debt

microeconomics

study of the economies of households, businesses, industries

market structure

number of competitors

global vision

recognizing international business opportunities, threats, distribution networks

balance of trade

difference between value of exports and value of imports

trade surplus

exports more than imports

absolute advantage

sell a product at a lower cost or only country that can provide a product

principle of comparative advantage

specialize in products most cheaply and trade for foreign goods they specialize in

free trade

trade w/o government regulation

protectionism

nation protects home industries from outside competition by tariffs, quotas

import quotas

limit of quantity of good imported

embargo

ban on import/export product

buy-national regulations

government rules that give special privileges to domestic manufacturers

dumping

charging a lower price for a product in foreign markets

preferential tariffs

gives advantages to one or more nations over others

free trade zone

few rules restrict trade among partners, nations outside zone must pay tariffs set by trade partners

world trade organization

exists to reduce trade barriers, open markets b/w wto members

contract manufacturing

foreign firm manufactures private label goods under a domestic firms brand

countertrade

form of barter where part of or all of payment for goods is in the form of other goods

multinational corporations

national headquarters, nestle, apple

efficiency

using the least amount of resources to get work done

effectivness

ability to produce a desired result

strategic planning

long range broad goals, top level

tactical planning

short term plans

operational planning

specific standards used in specific functional areas

contingency planning

alternative courses of action for crisis

leading

guiding and motivating others toward achievement of goals

power

influence others to behave a certain way

legitimate power

power from a position

coercive power

threatening negative outcomes

referent power

charisma and respect

autocratic leadership

little, no input from subordinates

participative leadership

discussion w subordinates

4 key management functions

controlling, leadership, organizing, planning

democratic leadership

solicit input then members vote

consensual leadership

leaders encourage discussion and require parties involved to agree

consultative leadership

leaders confer with subordinates but retain the final decision

laissez faire leadership

control given to subordinates

empowerment

giving employees increased autonomy to make own decisions

situational leadership

leaders selected based on subordinates

organizing

coordinating resources to carry out plans

controlling

assessing progress toward accomplishing goals

informational role

information gatherers, distributors, spokesperson

interpersonal role

motivator, representative

decisional role

decision maker, resources allocator, resolves conflict

technical skills

specialized areas of knowledge and expertise, supervisory managers

human relations skills

using human resources to complete org goals, all managers

conceptual skills

understanding org as a whole, assessing environments

division of labor

dividing work into separate jobs for workers, allows for defined tasks

specialization

degree to which tasks are divided into smaller jobs, better efficiency

departmentalization

grouping of people into units

functional departmentalization

based on primary functions, finance, marketingp

product departmentalization

based on goods or services produced, cardiology, pediatrics

process departmentalization

production process, lumber cutting, shipping

customer departmentalization

primary type of customer served, wholesale, retail purchasers

geographic departmentalization

geographic segmentation, US, Canada

matrix organization

2 forms of departmentalization

span of control

number of employees manager supervises

centralization

degree to which authority is concentrated one area, top management

decentralization

pushing authority down the hierarchy

marketing

finding out needs and wants and providing goods that meet expectations'

marketing concept

use of data to focus on needs of customers to develop strategies that satisfy needs

customer value

ratio of benefits for the customer to the sacrifice necessary to obtain those benefits

relationship marketing

making long term partnerships w customers