Intro To Business Management

Contemporary Business Chapters 1-3

Business

all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.

Goods

Tangible products that can be physically bought or sold

Services

intangible products that provide benefits to others or assistance from others

profits

difference between cost of creating and selling a product or service and what customers pay for it, representing savings earned by business people who take risks to meet people’s needs

not-for-profit organizations

business establishments that have primary objectives other than returning profits to their owners

factors of production

5 basic imputs: land, labor, capital, entrepreneurship, and knowledge

land

used in production of good. includes in production inputs, or natural resources that come from land and are useful in their natural states such as oil, gas, minerals, and timber.

labor

includes anyone who works.

included both in physical labor and intellectual inputs contributed by works

capital

includes technology, tools, information, and physical facilities

entrepreneurism

willingness to take risks to create and operate a business

knowledge

expertise, information, and intellectual capabilities that individuals and organizations use to drive innovation

private enterprise system

economic system that rewards companies for their ability to identify and serve needs and demands of customers

competition

battle among businesses for consumer acceptance

private property

right to own, use, buy, sell and bequeath land, buildings, machinery, equipment, patents, individual possessions, and various of intangibles kinds of property

branding

process of creating, identifying in consumers minds for a good, service, or company

brand

name, term, sign, symbol, design, or some combination that identifies products of 1 company and differentiates them from competitors’ offerings

transaction management

building and promoting products in hope that enough customers will buy them to cover costs and earn profits

relationship era

business era in which companies seek way to actively nurture customer loyalty by carefully managing every interaction.

social era

business era in which companies seek ways to convey and interact with customers using technology

Relationship management

collection of activities that build and maintain on going beneficial ties with customers and other parties

strategic alliance

partnership formed to create a competitive advantage for businesses involved

diversity

blending individuals of different genders, ethnic backgrounds, cultures, religions, ages, and physical and mental abilities to enhance a company’s chances of success

outsourcing

using outside vendors by contracting workers out to another party, for production of goods or fulfillment of services and functions previously performed in house

offshoring

practice of relocating business processes including both production (manufacturing) and services (accounting) to lower cost overseas locations

nearshoring

out shoring production or services to locations near a company’s home base or closer to customers

crowd sourcing

enlisting a collective of talent of people to get work done

vision

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

social responsibility

business’s consideration of society’s wellbeing and consumer satisfaction. in addition to profits.

critical thinking

ability to analyze and pinpoint problems or opportunitiesc

creativity

capacity to develop solutions to problems

business ethics

standards of moral values regarding right and wrongs in work environments

Federal Reserve System

Who is responsible for implementing monetary policy in the United States?

managing every interaction

In Relationship Era, businesses aim to nurture customer loyalty by…

microeconomics

study of small economic units such as individual consumers, families, and businesses

demand

willingness and ability of buyers to purchase goods and services

monopolistic competition

market structure in which large numbers of buyers & sellers exchange heterogeneous products so each participant has some control over price

economics

social science that analyzes choices people ad government make in allocating scarce resources

demand curve

graph of amount of product buyers will purchase at different times

equilibrium price

prevailing market price in which you can buy any item

macroeconomics

study of a nation’s overall economic issues such as how an economy maintains and allocates resources and how a government policies affect standards of living for citizens

monopoly

market structure in which a single seller dominates in trade in a specific good or service. Buyers cannot find any close substitutes.

communism

economical system in which all property would be shared equally by people of a community under the direction of a strong central government

mixed market economics

economic system that draws from both types of economy to different degrees

gross domestic product(GDP)

sum of all goods and services produced within a country’s specific time period

inflation

rising prices caused by combination of excess consumer demand and increases in the cost of production inputs

core inflation rate

inflation rate of economy after energy and food prices are removed

deflation

occurs when prices fall

consumer price index (CPI)

measurement of monthly average change in the prices of goods & services

frictional unemployment

members of workforce who are temporarily not working but looking for jobs

monetary policy

government actions to increase or decrease money supply and change banking requirements & interest rates to influence banker’s willingness to make loans

expansionary monetary

government actions to increase money supply in an effect to cut cost of borrowing which encourages business decision making to make new investments in turn stimulating the economy

fiscal policy

government spending for a number of decision making designed to control inflation reduce unemployement improve general welfare of citizens, and encourage economy.

budget

organization’s plan for raising & spending money during a given period of time

budget deficit

government spends more money than raised through taxes

budget surplus

government spends less money than raised through taxes

balanced budget

total revenue raised by taxes equal total proposed spending for the year

Supply

willingness & ability of sellers to provide goods and services

Supply curve

shows relationship between different prices and quantities that sellers will offer to save regardless of demand

pure competition

market structure where large number of buyers & sellers exchange identical products and no single participant has a single influence on price

regulated monopoly

local, state, or federal government gains exclusive rights in a certain marker or a single firm

planned economics

economic system in which government controls and determines business ownership fronts, and resource allocation to accomplish government goals rather than those set by individual firms

socialism

economic system characterized by government ownership & operations of major industries such as communication

Privatization

conversion of government owned & operated companies into privately held businesses

Recession

a widespread and significant economic downturn lasting more than a few months, characterized by decreased economic activity such as job losses, reduced income, and lower consumer spending

Productivity

relationship between number of units produced & the number of human and other production inputs necessary to produce them

Producer Price Index (PPI)

measurement of average change in prices of goods & services received by domestic producers

Unemployment Rate

% of total workforce that actively seeking work but currently unemployed

Seasonal Unemployment

joblessness of workers in seasonal inactivity

structural unemployment

people who remain unemployed for long-periods of time, often with in hope of finding a new job like the olds ones

restrictive monetary policy

government actions to reduce money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth

quantitative easing (QE)

an expansionary monetary policy where by a central bank buys back amounts of government bonds, or other financial assets to increase liquidity & stimulate economy

oligopoly

market structure where relatively few sellers compete & high start-up costs form barriers to keep out new competitors

balance of trade

difference between nation’s exports & imports

balance of payments

overflow of money into or out of the country

countertrade

barter agreement where trade between 2 or more nations involved payment made in form of local products instead of currency

conflict of interest

situation in which an employee must choose between business’s welfare & personal gain.

code of conduct

formal statement defines how an organization expects its employees to resolve ethical issues

consumerism

public demand that a business considers wants & needs of its customers in making decisions

corporate philanthropy

effort of an organization to make contributions to the communities where its makes profits

dumping

selling products abroad at prices below production costs or below typical prices in home market to capture market share from domestic competitors

Devaluation

drop in currency’s value relative to other currencies or to a fixed standard

exports

domestically produced goods & services sold in other countries

exchange rate

rate at which a nation’s currency can be exchanged for other currencies

embargo

total ban on importing specific products or a total halt to trading with particular countries

exchange control

restriction on importation & exportation at certain products or by certain companies through exchange contracts if required foreign currency

economic model

one in which businesses believe strongly that the sole role is to maximize profits & increase value to shareholders

Equal Employment Opportunity Commission (EEOC)

commission created to increase job opportunities for women & minorities

franchise

contractual agreement in which a franchisee gains rights to produce & sell franchisor’s products under company’s brand name if they agree to certain operating requirements.

foreign licensing agreement

international agreement in which 1 company allows another to produce or sell its product or use its trademark, patent, or manufacturers processes in a specific geographical area in return for royalities and other compensation.

General Agreement on Tariffs & Trade (GATT)

international trade accord that reduces worldwide tariffs & other trade variables

Global Business Strategy

offering standardized worldwide producers & sellers in same manner throughout a firm’s domestic & foreign markets

imports

foreign-made products purchased domestically

International Monetary Fund (IMF)

organization created to promote trade, eliminate barriers, and make short-term loans to member nations that are unable to meet their budgets.

integrity

adhering to deeply felt ethical principles in business situations.

joint venture

partnership between companies formed for a specific reason

multinational corporation (MC)

firm with significant operations & marketing activities outside its home country

multidomestic business strategy

developing and marketing products to serve different needs & tastes of separate national markets

product liability

responsibility of manufacturers or injuries & damages caused by their products

quota

limit set on amounts of particular producers that countries can import during specified periods of time

world trade organization (WTO)

monitors GATT agreements & mediates internal trade disputes