business part 2

●       List and describe the conditions to make a legally enforceable contract and possible consequences

1.     An offer is made

2.     There is a voluntary acceptance of the offer

3.     Both parties give consideration (sum of value)

4.     Both parties are competent

5.     The contract covers a legal act

6.     The contract is in proper form

Breach of conduct:

-        Specific performance

-        Payment of damages

-        Discharge of obligation

common stock

Holders of common stock have the right to elect members of the company’s board of directors and vote on important issues affecting the company, and share in the firm's profits through dividends, if approved by the firm's board of directors.

preferred stock

Owners of preferred stock are given preference in the payment of company dividends and must be paid their dividends in full before any common stock dividends can be distributed. They have a prior claim on company assets if the firm is forced out of business and its assets are sold, but preferred stockholders don’t have voting rights in the company.

Advantages of equity financing

-        As owners of the business, stockholders never have to be repaid their investment

-        No legal obligation to pay dividends to stockholders

-        Selling stock can improve the condition of a firm's balance sheet since issuing stock creates no debt

disadvantages of equity financing

-        As owners, stockholders have the right to vote for the company’s board of directors. Issuing new shares of stock can thus alter the control of the firm

-        Dividends are paid from profit after taxes and are not tax-deductible

-        The need to keep stockholders happy can affect manager’s decisions

Financial managers examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm.

-        Auditing

-        Managing taxes

-        Advising top management on financial matters

-        Collecting funds (credit management)

-        Controlling funds (funds management)

-        Obtaining funds

-        Budgeting

-        planning

six steps in the accounting cycle

1.     Analyze source documents

2.     Record transactions in journals

3.     Transfer (post) journal entries

4.     Take a trial balance

5.     Prepare financial statements

6.     Analyze financial statements

Illustrate the steps of B2B and B2C selling

Selling process

-        Prospect and quality

-        Pre-approach

-        Approach

-        Make a presentation

-        Answer objections

-        Close the sale

-        Follow up

Describe the product life cycle

The product life cycle has 4 stages: introduction, growth, maturity, and decline

●       Identify various pricing strategies and objectives

-        Achieving a target return on investment or profit

-        Building traffic

-        Achieving greater market share

-        Creating an image

-        Furthering social objectives

Cost-based pricing

Demand-based pricing

Competition-based pricing

define the 4 P’s

Product

Price

Place

Promotion

●       Describe methods that companies use to recruit new employees and their issues

Human resource department

Selection

Hiring

Orientation and training

External sources

-        Social media

-        Online

-        Job fairs

-        Personal applications

Internal sources

-        Transfers

-        Promotions

-        Employee recommendations

-        Retrained employees

-        Department reorganizations

●       Illustrate the effect of legislation on human resource management

National labor relations act of 1935

Fair Labor Standards Act of 1938

Manpower Development and Training Act of 1962

Equal pay act of 1963

Civil rights act of 1964

Age discrimination in employment act of 1967

Theory Z

-        Employee involvement is the key to productivity

-        Employees prefer to share responsibility/decision-making

Identify Maslow’s Hierarchy of Needs and how it relates to employee motivation

Physiological needs: shelter, food, water

Safety needs: feel secure at work and home

Social needs: to feel loved, accepted, part of a group

Esteem needs: recognition and acknowledgment from others/self-respect

Self- actualization needs: to develop to one's fullest potential

Needs that have already been satisfied will no longer provide motivation

Identify various production processes and techniques that improve productivity

o   Computer-aided design and manufacturing

o   Flexing manufacturing

o   Lean manufacturing

o   Mass customization

o   Robotics

o   3D printing

Outline the basic principles of organizational management

Organizing, division of labor, job specialization, departmentalization

  Understand what it takes to run a small business

Planning you business (business plan)

Finacning- family, banks, crowdunding, venture capitalists, angels, SBA

Knowing your customers

Managing your employees

Keeping records

Look for help

List the attributes of successful entrepreneurs

Self-directed

Self-nurturing

Action-oriented

Highly energetic

Tolerant of uncertainty

Explain why people take the risks of entrepreneurship

Opportunity

Profit

Independence

Exciting challenge

Advantages sole proprietorship

-        Ease of starting and ending the business

-        Ability to be your own boss

-        Pride of ownership

-        Leaving a legacy

-        No special taxes

Disadvantages for sole proprietorship

-        Unlimited liability- the risk of personal losses

-        Limited financial resources

-        Management difficulties

-        Overwhelming time commitment

-        Few fringe benefits

-        Limited growth

-        Limited life span

Advantages of corporations

o   Limited liability

o   Ability to raise more money for investment

o   “size” – a large corporation with many resources can take advantage of opportunities anywhere in the world

o   Perpetual life

o   Ease of ownership change

o   Ease of attracting talented employees

o   Separation of ownership from management

 Disadvantages of corporations

o   Initial cost

o   Extensive paperwork

o   Double taxation

o   Two tax returns

o   Size

o   Difficulty of termination

o   Possible conflict with stockholders and the board of directors

●       Analyze the role of business in influencing ethical behavior and social responsibility in global markets

The relationship among businesses and between nations should be based on trust and cooperation, and the relationship between workers and managers must be based on fairness, honesty, openness, and moral integrity.

A business should be managed ethically for many reasons: to maintain a good reputation, to keep existing customers and attract new ones, to avoid lawsuits, etc.

●       Discuss the importance of the global market and the roles of comparative advantage and absolute advantage in trade

●       The us trades almost $1.9 trillion worth of goods with Canada, Mexico, and China

●       Comparative advantage theory states that a country should sell to other countries those products it produces most effectively and efficiently and buy from other countries those products it can't produce effectively or efficiently

●       If a country has an absolute advantage, it can produce a specific product more efficiently than all other countries- it doesn’t last forever and it's rare

creation of wealth

To create wealth for its citizens, a country requires more than natural resources. It needs effort of entrepreneurs and the skill and knowledge to produce goods and services.

4 basic rights under free market capitalism

1.     The right to own private property- to buy, sell, and use land, buildings, etc

2.     The right to own a business and keep all that business’s profit

3.     The right to freedom of competition

4.     The right to freedom of choice