Intro to business test 1

types of competiton

pure, monopolistic, oligopoly, monopoly

pure competition defined

when price is determined only by supply and demand (many sellers)

monopolistic

when there are many forms, so marketing gives price power (many sellers + branding)

oligopoly

there are few companies that control the market (few sellers)

monopoly

one company that controls the market (one seller)

what happens during an economic expansion

people spend more, businesses produce more, there are more jobs, standard of living rises

what happens from too much expansion

inflation

what happens during an economic contraction

spending decreases, business slow down production, layoffs occur, can lead to a recession

recession

high unemployment + low spending

a depression is

an extreme recession

gross domestoc product

total goods/services produced in 1 country in 1 year

Budget deficit

goveernmnet spends more than it receives in taxes

trade balance

exports -imports

CPI

measures price changes (inflation)

unemployment rate

% of peiople wanting work but unemployed

AI is

something that performs tasks requiring human intelligence

Big Data is

huge amounts of info AI learns from

block chain

secure digital record keeping

robotics

machines performing work efficiently

drones

unmanned aircrafts

communism is when

the government/some people own everything. little economy

socialism is

when governments own major industries and there is still some private ownership

capitalism is

individuals own most businesses and competition of those businesses determines prices

what kind of economic system does USA used

mixed economy, which is mostly capitalism, but the government still regulates businesses.

a business is

something that provides products to earn profit

profit is

revenue-cost

products can be

tangible and intangible or physical and services

primary stakeholder

necessary part of business (customer, employee, supplier, investor)

secondary stakeholder

indirect part of business (media, trade associates, interest groups)

demand is

how much consumers want to buy

supply is

how much businesses need/want to sell

equilibrium price is

when supply amount = demand amount

types of resources

natural, human, financial, intangible

an entrepreneur is

someone who risks time, money, effort to create an innovative product or business for profit

a high standard of living is

more wealth, better education, better healthcare, lower poverty

a low standard of living is

poverty, less education, higher unemployment

business ethics is

principles and standards that determine acceptable conduct in business

what are key ideas of business ethics

organizational culture influences ethical behavior, trust is the foundation of business relationships, ethical standards come from: organization, stakeholder, competitors, government, interest groups, public, personal values

leaders should do what according to good business ethics

show commitment to ethics, support ethics programs, communicate expectations and educate employees, train employees for ethical crisis

social responsibility is

a businesses obligation to maximize positive impacts and minimize negative impacts on society

difference between ethic and social responsibility

ethical decisions deals with individual decisions and right v wrong, while social responsibility deals with organizations impact on society and positive v negative

business law is

laws and regulations governing business conduct

why is business law important

it prevents conflict, protects businesses, ensures legal compliance

whats the Sarbane-Oaxley Act

criminalized securities fraud, increased penalties for corp fraud, and was passed in 2000 after accounting scadal

Dodd-Frank Act

Reformed financial industry protected consumers, and was passed after 2008 recession

why do the roles of ethics matter

society judges business behavior, ethical reputation affects success, ethical conduct builds trust

ethical misconduct pattern

ethical concern —> legal dispute —> business consequence

what are ethical grey areas

where no law exists, no company policy exists, no clear ethical standard exists

ethical issue is

situation requiring someone ot choose between right and wrong actions

ethical issues are cause by

aggressive financial goals, organizational culture, personal values

types of ethical issues

bribery, misuse of company time, misuse of company resources, conflict of interest, abusive behavior

bribery is

giving or receiving gifts for influential decisions

misuse of company time

being at work and being on social media

abusive behavior

harassment, threats, verbal abuse, bullying, intimidation

misuse of company resources

personal copies, personal emails, false expense reports

conflict of interest

when personal interests interfere with business opportunities (insider trading, bribery)

what is insider trading

buying/selling stock by using confidential info

plagerism is

using another person’s work without giving credit

what must employees do

follow laws, be transparent, use company resources fairly

business communication must

avoid false ads, be truthful, label products honestly

business relationships must do what

keep company secrets, meet responsibilities, avoid unethical pressure, avoid plagiarism

3 factors that influence ethics

individual values, managers and coworkers, opportunity for misconduct

code of ethics

formal rules explaining expected employee behavior

why is a code of ethics important

helps ID ethical risks, promotes honesty and integrity, helps with grey areas, explains reporting procedures, creates consistent standards, improves ethical decision making

whistleblowing is

reporting an employer’s illegal or unethical actions (often reported to government, media, regulatory agencies) Dodd-Frank act protects and rewards whistleblowing

what is corporate citizenship

how well a business fulfills its: legal responsibilities, ethical responsibilities, economic responsibilities, voluntary responsibilities

ESG framework is

environmental: pollution, recycling, alternative energy

Social: equal pay, LGBTQ policies, community relations

Governance: compliance, executive pay, board oversight

why social responsibility is good

benefits society, improves company performance, businesses have resources to help, supports education and sustainability, reduces government regulations, helps long term survival

why social responsibility is bad

distracts from making profit, gives businesses too much power, government should solve social cues, nonprofits are better suited

stakeholders responsibility

honest account, protects investments, provides accurate info

employees needs

safe workplace, fair pay, equal opportunity, respect, communication

consumer rights

safety, info, choice, to be heard

consumerism is

actions taken by individuals or groups to protect consumer rights (boycotts, PSA, lobbying)

sustainability is

meeting todays needs while protects the environment for future generations

Focus Areas of sustainability are

pollution, recycling, alt energy, green power, community involvment, charitable donations

what is greenwashing

making a company appear more environmentally friendly than it really is

ethical concerns of unemployment issue

factory closures, community impact, hiring standards, lack of training opportunities

how do some companies work to reduce unemployment

through hiring and training

international business is

trading goods/services across national borders

why do companies internationally expand

increase profits, reach new customers, lower production costs, lower production costs, stay competitive

why countries trade:

absolute advantage and corporate advantage, lower costs, economies of scale, expand markets, keep up with customers, keep up with competitors.

how can one enter international markets

importing, exporting, counter trade, export agent, trading company

importing is

buying goods from another country

exporting

selling goods to another country

countertrade

trading products instead of money (bartering)

export agent

middleman handling international transactions

trading company

buying products in one country and selling them to another

Licensing

company allows other company to use brand, patent, TM, production process, in exchange for fees/royalties (best for when political conditions make investing risky)

franchising

specialized form of licensing where franchisor provides the business name, logo, products, operating methods, and ads, while the franchisee pays fees, and follows company standards

contract manufacturing

a foreign company manufactures the product, but the product still carries original company name

outsourcing

hiring another company in another country to perform work (done to reduce labor or production costs)

offshoring

company moves its own operations to another country and the company controls the work

difference between offshoring and outsourcing

outsourcing is using another company in another country to do the work, offshoring it your own company doing to work in another country

joint venture

2 companies partner for one project or limited time

when is joint venture mostly used

when investment laws prevent foreign ownership, or when a company lacks resources or expertise

strategic allowance

longterm partnership to gain competitive advantage

where is strategic allowance most common

automobile industry, tech industry

direct investment

company owns facilities in another country

pros and cons of direct investment

pros: greater control, higher profit

cons: higher risk, higher cost

multinational corp

operates in many countries, not tied to one nation

critiques of multinational corp: exploits workers, hurts environment, increases wealth inequally