RSM100 Quiz

greatest forces in business

globalization and technology

business

profit-seeking activities and enterprises that provide tangible goods or services necessary to an economic system

profits

rewards for businesspeople who take risks by offering goods and services to customers

not-for-profit organizations

organizations whose primary aims are public service, not returning a profit to owners

factors of produciton

natural resources, capital, human resources, and entrepreneurship

natural resources

land, oil, mineral deposits

capital

tools, factories

human resources

knowledge, skills

entrepreneurship

risk-takers that seek profitable opportunity, create jobs and sell products

capitalism

private enterprise system --> system that rewards firms for their ability to identify and serve consumer needs/demands

rights in capitalism

private property, freedom of choice, profits, and competition

competition

battle among businesses for consumer acceptance

competitive differentiation

unique combination of organizational abilities, products, and approaches that sets one company apart from its competitors

colonial era

agricultural, trading

industrial revolution era

independent skilled workers --> mass-producing factory system, fostered innovation

production era

specialized work, assembly lines, international processes

marketing era

selling = marketing, catering to consumers' wants and needs

consumer orientation

business philosophy that focuses on consumers' unmet wants and needs

branding and brands

creating identities for goods/services/companies in consumers' minds via terms/symbols/logos/designs

relationship era

building long-term consumer relationships with loyalty

relationship management

building and maintaining ongoing mutually-beneficial ties with consumers and parties

microeconomics

study of small economic units (consumers, families, businesses)

demand

willingness of buyers to purchase goods/services at different prices

supply

willingness of sellers to provide goods/services at different prices

economics

social science that analyzes choice by people and the government allocating scarce resources

business cycle

natural fluctuations within an economy

gdp

per capita output of a country

frictional unemployment

temporary, people looking for a job

seasonal unemployment

not working during some months, not looking for a job

structural unemployment

not working due to a lack of demand (skills, knowledge), may be retraining

cyclical unemployment

not working due to economic slowdown/business cycle fluctations

monetary policy

implemented by the Bank of Canada, government actions to increase/decrease the money supply, change bank requirements and interest rates to influence willingness of bankers to make loans (expansionary/restrictive)

quantitative easing

purchase of bonds by a central bank to increase liquidity

fiscal policy

implemented by the government, spending and taxation decisions designed to control inflation, reduce the unemployment rate, increase welfare, and boost economic growth

pure competition

many competitors selling identical products with easy entry for new firms and no price control

monopolistic competition

few to many competitors with product differentiation, somewhat difficult for firms to enter and some price control

oligopoly

few competitors with similar or differentiated products, difficult to enter market with some price control

monopoly

no competitors, no similarity of goods, entrance of new firms is regulated (strict), total price control

capitalism economy

private ownership and management, rights to profits go to entrepreneurs and investors, workers choose their jobs and unions and receive considerable incentives

communism

government ownership and management, no profits, workers exchange protection vs. unemployment

socialism

basic industries are government owned and managed, some are private, only private sector generates profits, workers choose their jobs and unions (government influences job choices) and receive limited incentives

mixed economy

private ownership and management, public enterprises, rights to profits go to entrepreneurs and investors with high taxes, workers choose their jobs and unions and receive considerable incentives

small business

independent business with fewer than 100 employees and revenues less than $2 million that is not dominant in its market

home-based businesses

firms that operate out of the business owner's residence, control over business and personal time with reduced overhead costs

small business failures

lack of willingness to take a risk, mismanagement/management inexperience (overconfidence, lacking skills), inadequate financing, government regulations

business plan

formal document that details a company's goals, methods, and standards

executive summary

briefly answers who, what, where, when, why, and how

introduction

general statement of the concept, purpose, and objectives of the business

financial and marketing sections

describe target market, marketing plan, and detailed financial forecasts of the need for dunds and when the firm will break even

resumes of principals

especially in plans written to obtain financing, lists resumes of principal contributors

company's mission and vision of its founders

outline of why the company is unique, the customers, the competition, financial evaluation of industry/market conditions, assessment of the risks

franchising

a contractual business arrangement between a manufacturer/other supplier and a dealer specifying how the dealer will market the supplier's product/service

franchising agreement

contract between franchisee and franchisor

franchisee

individual/business firm purchasing a franchise

franchisor

firm whose products are sold to customers by the franchisee

sole proprietorships

sole proprietor's status as an individual is not legally separate from their status as a business owner

partnerships

association of two or more persons who operate a business as co-owners by voluntary legal agreement

corporations

legal organizations that have assets and liabilities separate from assets/liabilities of their owners

not-for-proft corporations

organizations whose goals do not include pursuing a profit

public ownership

a government unit/agency owns and operate an organization

collective (co-operative) ownership

owners work together to operate all or part of the activities in their firm/industries

corporate charter

corporations have legal rights of a real person (at federal or provincial level)

supervisory management

supervisors and department heads: coordinate daily operations, supervise employees, evaluate staff performance

middle management

branch managers, plant managers, division heads/directors: manage operations, serve as liaison between top management and other levels

top management

CEO, COO, CFO: manage overall operations, make major decisions, introduce major changes

board of directors

usually shareholders: sets overall policy, authorizes major transactions, hires CEO

shareholders

buys shares in corporation, elects board of directors

closed/closely-held corporation

firms where shares are generally unavailable to outsiders and the shareholders control and manage all of the company's activities

open corporation

sells shares to the general public, diversified ownership, role is dependent on class of shares owned

preferred shares

give owners the right to receive dividends or assets before owners of common shares, paid at a stated rate

common shares

give owners voting rights, but only residual claims to the firm's assets and income distribution

certified benefit corporations

for-profit corporate entities that include a positive impact on society/the environment as part of its defined goals

preferred shares can be...

convertible (into common shares), redeemable (shareholder can force the company to buy the shares back), participating (receive a portion of remaining dividends), cumulative (paid when not declared), callable (company can buy shares back)

merger

two or more firms combine to form one company

vertical merger

combines firms operating at different levels in the production and marketing process

horizontal merger

joins firms in the same industry for the purpose of diversification, increased customer base, cutting costs, or expanding product lines

conglomerate merger

combines unrelated firms to diversify, increase sales, spend cash surplus to avoid takeover attempts

acquisition

one firm purchases another, taking on its property, assets, and debt

joint ventures

partnership between companies formed for a specific undertaking

classic entrepreneur

person who identifies a business opportunity and allocates resources to gain access to that market

serial entrepreneur

a person who starts one business, runs it, and then starts and runs more businesses one after another

social entrepreneur

person who recognizes societal problems and uses business principles to develop innovative solutions

lifestyle entrepreneur

person who starts a business to gain flexbility in work hours/control their own life

characteristics of entrepreneurs

vision, high energy level, need to achieve, self-confidence and optimism, tolerance for failure, creativity, tolerance for ambiguity, and internal locus of control

venture vapitalists

business organizations/groups of individuals that invest in early stage, high-potential-growth companies

angel investors

wealthy individuals who invest directly in new ventures in exchange for an equity stake

intrapreneurship

process of promoting innovation within the structure of an existing organization

skunkworks

project initiated by an employee who conceives an idea, convinces top management of its potential, and then recruits human and other resources from within the company to turn the idea into a commercial project

management

process of achieving organizational goals through people and other resources

technical managerial skills

understand and use techniques, knowledge, tools, and equipment (important for supervisory management)

human managerial skills

interpersonal skills that help managers work effectively with other people (communication, motivation, collaboration, and leadership)

conceptual managerial skills

see organization as a single unit an dunderstand how each part interacts within an organization (important for top-level managers)

planning

process of anticipating future events and conditions and deciding on the courses of action for achieving organizational goals

organizing

process of blending human and material resources through a formal structure of tasks and authority by arranging work, dividing tasks among employees, and coordinating them to ensure plans are carried out and goals are met

directing

guiding and motivating employees to accomplish organizational goals

controlling

the function of assessing an organization's performance against its goals

vision

ability to perceive marketplace needs and what an organization must do to satisfy them

ethical standards

set by top management, influence a firm's long-term relationships with its customers, suppliers, and the general public

strategic planning

top management: process of deciding on an organization's primary objectives and then taking action and setting aside resources to achieve them

tactical planning

middle management: implementing the activities specified by strategical plans