Intro To Business 101- Exam 1 (1-5)

business

for-profit and nonprofit organizations that provide goods and services to others

goods

tangible products like tomatoes, shoes, and iPhones

services

intangible products like health care, maid services, and education

revenue

income from sale of goods and services, or any use of capital or assets, associated with the operations of an organization before any costs or expenses are deducted

profit

amount of money a business earns in revenue in excess of its expenses

loss

occurs when expenses are greater than revenue

for-profit businesses

seek to earn profit for their owners while providing goods and services. Example: Mobile, IKEA, Apple…

nonprofit businesses

seek to maximize a primary objective rather than profit while providing goods and services

entreprenuer

a person willing to risk time and money to start and manage a business

big ideas

1. scan the environment

2. SWOT analysis

3. define your mission and vision

4. owners, employees, and customers make a business

5. without profit, a business fails

6. trade offs are everywhere

7. incentives matter

8. people make decisions at the margin

9. trade can make everyone better off

10. framing decisions matters

SWOT analysis

(internal) strengths, weaknesses, (external), opportunities, threats

core competency

unique ability that a business acquires from its founders that cannot be easily imitated (example: cheerful baristas at Starbucks)

mission statement

formal summary of the aims and values of a company, organization, or individual as to what they do right now

vision statement

a company road map, indicating both what the company wants to become and guiding transformational initiatives by setting a defined direction for the company’s growth

stakeholder

a person who stands to gain or lose by the decisions made by a business

trade-off

giving up something in order to get the other

scarce

too few goods and resources to satisfy the wants of all individuals

factors of production

land, labor, capital, and entrepreneurial ability

opportunity cost

the next best thing to your choice

positive incentives

increase the benefit of making a decision, making the choice more likely (BOGO)

negative incentive

punishment increases the cost of making a decision, making the choice less likely (warning signs on cigarettes)

marginal

to do a little more or a little less of something

positive sum game

trading a good or service to create new wealth for both

zero sum game

in order for one person to win, one must lose

framing

selecting how the choice is presented to the customer or decision maker

data

facts and statistics collected together for reference or analysis

information

facts provided or learned about something or someone

information technology

systems, processes, and tools that enable organizations to collect, store, retrieve, analyze, and share data and the information obtained from it

cookie

a file that a website you visit sends to your browser

big data

used to describe these sets of data and their analysis, not only because of the amount of data they contain, but also because of how quick they can be gathered using different technologies from a variety of sources

cloud

a form of data storage and computed that is accessed remotely via the internet

business analytics

involves building analysis models and simulations to create scenarios, understand realities and predict future states

data breach

when a company has their data exposed to those who are not authorized to view it

hacker

a person who accesses the data of an organization through unauthorized entry into its computer network

identity theft

when someone wrongfully obtains and uses another persons personal data is some ways that involves fraud or deception typically for economic gain

e-commerce

selling products electronically online

telecommute

employees that work from home by accessing the internet

automation

the use of machinery to do a job instead of human labor, and advances in technology have made it possible for machines to perform jobs that once required people

online courses

relies entirely on online delivery without any requirement for the instructor or the student to be on campus

personal brand

a person who showcases his/her professional skills when looking for a job

Internet of things

connections of a variety of devices including electronics, appliances, cameras and others to the internet

voice over internet protocol (VoIP)

technology to place telephone calls using the internet instead of traditional telephone networks

offshoring

located facilities in other countries

organizational culture

system of shared assumptions, values, and beliefs which governs how people behave in organizations. These shared values have a strong influence on the people in the organization. and dictated how they dress, act, and preform their jobs

corporate strategy

the direction an organization takes with the objective of achieving business success in the long term

concentration

focus on a single business and compete in a single strategy

vertical integration

expanding forward and selling their products themselves in retail stores and/or backward by manufacturing their own products

related diversification

occurs when organizations expand into business related to their core business

unrelated diversification

occurs when firms acquire or merge firms unrelated to their core competency

low cost strategy

focus on reducing costs and carrying that value over to customer

differentiation strategy

focus more on innovation and quality than on costs

organizational structure

defines how activities such as task allocation and supervision are directed toward the achievement of organizational claims

span of control

number of subordinates that a manager or supervisors can directly control

what’s a managers job

planning, organizing, leading, and controlling

interpersonal roles

involve people and other duties that are ceremonial or symbolic in nature

informational roles

involve collecting, receiving, and disseminitaing information

change management

guide organizational leaders to initiative and implement important changes in their organization

transformational leaders

characterized by inspiration and charisma (MLK jr)

transactional leaders

managers who ensure tasks are completed (hitler)

demand curve

a graph showing how the demand for a commodity or a service varies with changes in its price

complementary goods

a good whose use is related to the use of an associated or paired good

substitute good

goods which as a result of changed conditions may replace each other in use or comsumption

normal good

good for which demand increases as a consumers income rises, but at a rate slower than the rates of increase in income

inferior good

a good that decreases in demand when consumer income rises (or rises in demand when consumer income decreases) unlike normal goods, for which the opposite is observed

tastes and preferences

the subjective tastes as measured by utility of various bundles of goods

quantity demanded

the total amount of goods or services demanded at any given point in time

ceteris paribus

all things being equal

law of demand

observation that demand for a product varies inversely with its price; lower prices simulate demand and higher prices dampen it

supply curve

depict how a business responds to changing market prices of a good or service

quantity supplied

how much a business produces to meet the demand of the consumers

law of supply

as the price of a good or service rises, the quantity supplied by producers increases, assuming all other factors remain constant

market equilibrium

situation in which the supply of an item is exactly equal to the demand

competitive market economies

primarily made up of privately owned, for-profit businesses and organizations that provide good and services to others

mixed economy

an economic system in which both he private enterprise and degree of state monopoly co-exist. All modern economies are mixed where the means of production are shared between the private and public sectors (dual economy)

centrally planned economies

national financial system where the country’s government operates, owns, and manages production facilities

GDP

the sum of the market value of all final goods and services produced within a country in a given period of time

Real GDP

informs the reader that the market value of the economic product calculations are adjusted for changes in the price level

nominal GDP

equals the market value of the final goods and services produced at current year prices

economic contraction

the negative moment from peak to trough

economic expansion

the positive movement from trough to peak

consumption

made up of all the final goods and services that are ultimately bought and used by households, except for newly constructed buildings

unemployment rate

a key indicator of economic performance and it is one of the most widely reported government statistics (= those who have been looking for a job/labor force)

frictional unemployment

occurs because it takes time for workers to search for jobs that best suite their taste and job skills

structural unemployment

number of jobs available in a labor market is insufficient to provide jobs for all of those who want a job

cyclical unemployment

unemployment that occurs because of declines in the economy GDP during economic contractions and recessions

appreciates

when its price increases in terms of another currency

depreciate

when its price decreases in terms of another currency

fiscal policy

governments plans for taxing and spending

monetary policy

actions of a central bank to effect interest rates and supply of money

ethics

basic concepts and fundamental principles of decent human conduct.

ethical dilemmas

a complex situation that often involves an apparent mental conflict between moral imperatives in which to obey one would result in transgressing another

three question test

1. is it legal

2. would I like to be treated this way

3. would I want to hide this from others

code of ethics

an important means of minimizing the uncertainty regarding the decisions that employees may encounter when faced with ethical dilemmas in the workplace

corporate social responsibility

company sense of responsibility towards the community and environment in which it operates

Stockholders

An individual, group, or organization that holds one or more shares in a company, and in whose name the share certificate is issued. Also called shareholder.