BA 101 Midterm 3 University of Oregon

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124 Terms

1

sole properietorship

Easy, quick, simple and affordable, Full control with minimal administration, Adaptable

The Challenges: Risk and personal exposure, Credibility - only as good as yours, Raising additional capital

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2

partnership

Voluntary association

Unlimited liability

Mutual agency - (one bad apple)

Limited life

Limited access to $

Partners keep control

Relatively unregulated

Single taxation

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3

coporation

Separate legal entity

Limited liability

Limited stockholder power

Unlimited life

Easy access to capital

Stockholders may lose control

Government regulation

Double taxation

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4

general partnership

Mutual agency

Unlimited liability

Share risk/wealth equally

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5

limited partnership

No mutual agency

Provision for limited liability for some

Do not share the risk/wealth equally

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6

securities and exchange commission (SEC)

Sale of stock / financial reporting - Full disclosure - Due diligence ... has to be thorough in finding and reporting information

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7

domestic corporations

Operate in state in which it is incorporated

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8

foreign corporations

Operate in states other than their state of incorporation

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9

alien corporations

Are organized in one country and operate in another

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10

common stock

Voting rights (proxy)

Residual claims to assets

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11

preferred stock

No vote

First claim on income

a preferred dividend

First claim on assets after debt

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12

B corporation

are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.

Alignment with the "3P" approach - People, Planet and Profit

Supported by the balanced scorecard concept

Gaining credibility and recognition

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13

limited liability company (LLC)

combines the advantages of a Corporation and Sole Proprietorship and gets rid of the disadvantages

The Good it keeps:

Pass through Taxation (Sole Proprietorship)

Flexibility (Sole Proprietorship)

Limited Liability (Corporation)

The Bad it gets rid of:

Double Taxation (Corporation)

Corporate Structure Corporation)

Unlimited Liability (Sole Proprietorship)

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14

merger

two companies into one

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15

horizontal acquisition

one firm buys another in the same industry

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16

vertical acquisition

one firm buys another in the same distribution channel

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17

innovation

is the tool of entrepreneurs where they exploit change as an opportunity to form a new business or service.

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18

leader

create a vision, are change agents, take risks, coach

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19

manager

create a goal, maintain the status quo, control risk, direct

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20

systematic innovation

consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation.

Many successful innovations exploit change.

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21

intrapenuer

Applying an entrepreneurial mindset within an established organization

A way to stimulate innovation in large, established organizations acts as an "inside entrepreneur" who focuses on innovation and creativity while operating within the goals and environment of an organization

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22

crowdsourcing

is the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, and especially from an online community, rather than from traditional employees or suppliers.

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23

feasibility analysis

Is not the same as a business plan

Serves as a filter, screening out ideas that lack the potential for building a successful business before an entrepreneur commits the necessary resources to building a business plan

Is an investigative tool

Asks two questions:

Are customers willing to purchase our goods or services?

Can we provide the products or services to customers at a profit?

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24

capital requirements

Must have an estimate of how much start-up capital is required to launch the business

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25

estimated earnings

Forecasted income statements

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26

return on investment

Combining the estimated earning and capital requirements to determine how much investors can expect their investments to return

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27

business plan

A systematic evaluation of a venture's chances for success

A way to determine the risks facing a venture

A game plan for managing a business successfully

A tool for comparing actual and target results

An important tool for attracting capital

A "road map" for the venture

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28

financial forecast

Projected financial statements

Monthly for one year

Quarterly for the next two years

Income statement

Balance sheet

Cash Flow

Capital expenditures

Three forecasts: Pessimistic. Most Likely, Optimistic

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29

equity capital

Represents the personal investment of the owner(s) in the business

Is called risk capital because investors assume the risk of losing their money if the business fails

Does not have to be repaid with interest like a loan does

Means that an entrepreneur must give up some ownership in the company to outside investors

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30

angels

Private investors who invest in emerging business start-ups in exchange for equity stakes and some control in the company

Fastest growing segment of the small business capital market

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31

crowdfunding

involves asking a group of people, most often online, to donate money and be financially involved in a project or business.

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32

initial public offering (IPO)

When a company raises capital by selling shares of its stock to the public for the first time

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33

debt financing

Financing that must be repaid with interest

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34

guerrilla marketing

Tactic in which a company uses surprise and/or unconventional interactions in order to promote a product or service.

Different than traditional marketing in that it often relies on personal interaction, has a smaller budget, and focuses on smaller groups of promoters

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35

vision

An encompassing explanation of why the organization exists and where it's trying to go. It is more than a goal

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36

mission statement

An outline of the fundamental purposes of an organization

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37

goals

The broad, long-term accomplishments an organization wishes to attain.

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38

objectives

Specific, short-term statements detailing how to achieve the organization's goals. They are often quantified with target numerics and/or dates.

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39

SWOT analysis

A planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats.

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40

strategic planning

Determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

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41

tactical planning

Developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done.

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42

operational planning

Setting work standards and schedules necessary to implement the company's tactical objectives.

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43

contingency planning

Preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives.

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44

problem solving

The process of solving the everyday problems that occur; less formal than decision making and usually calls for quicker action.

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45

brainstorming

Produce an idea or way of solving a problem by holding a spontaneous group discussion without criticism

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46

PMi

Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.

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47

chief executive officer (CEO)

Introduces change into an organization.

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48

chief operating officer (COO)

Implements CEO's changes.

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49

chief financial officer (CFO)

Obtains funds, plans budgets, collects funds, etc.

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50

chief information officer (CIO)

Gets the right information to the right people, so decisions can be made.

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51

technical skills

The ability to perform tasks in a specific discipline or department.

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52

human relations skills

Communication and motivation; they enable managers to work through and with people.

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53

conceptual skills

The ability to picture the organization as a whole and the relationship among its various parts.

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54

transparency

The presentation of the company's facts and figures in a way that is clear and apparent to all stakeholders.

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55

autocratic leadership

Make managerial decisions without consulting others.

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56

participative or democratic leadership

Managers and employees work together to make decisions.

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57

free-rein leadership

Managers set objectives and employees are relatively free to do whatever it takes to accomplish those objectives.

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58

rationalist

Values sound thinking

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59

humanist

Regards people as company's top asset

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60

politicist

Adept at politics

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61

culturist

Communicates through stories, ceremonies, and rituals

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62

enabling

Giving workers the education and tools they need to make decisions.

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63

knowledge management

Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm.

This tries to keep people from reinventing the wheel.

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64

control function

Measures performance relative to planned objectives

Rewards people for work well done

Takes necessary corrective action

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65

world trade organization (WTO)

Police force for the world trading system

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66

international monetary fund (IMF)

Maintains order in the international monetary system

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67

world bank

Promotes economic development

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68

United Nations (UN)

Maintains international peace and security

Develops friendly relations among nations

Cooperates in solving international problems

Promotes respect for human rights

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69

international trade

the sale of goods or services to another country

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70

federal direct investment

investment of resources in business activities outside the home country

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71

cultural relativism

is the belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate

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72

righteous moralist

claims that a multinational's home country standards of ethics are the appropriate ones for companies to follow in foreign countries

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73

naive moralist

asserts a manager of a multinational that actions are ethically justified if everyone else is doing the same thing

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74

comparative advantage

A country should sell the products it produces most efficiently and buy from other countries the products it cannot produce as efficiently.

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75

absolute advantage

A country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

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76

balance of trade

The total value of a nation's exports compared to its imports measured over a particular period.

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77

trade surplus

When the value of a country's exports is more than that of its imports.

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78

trade deficit

When the value of a country's exports is less than that of its imports.

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79

balance of payments

The difference between money coming into a country (from exports) and money leaving the country (from imports) plus other money flows.

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80

tariff

a tax levied on imports, raising the cost of imported products relative to domestic products

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81

subsidy

is a government payment to a domestic producer

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82

import quota

is a direct restriction on the quantity of goods imported into a country

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83

tariff rate quota

are a hybrid of a quota and a tariff, lower tariffs within the quota, higher tariffs over the quota

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84

voluntary export restraint

are quotas on trade imposed by the exporting country, typically at the request of the importing country's government

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85

dumping

is selling goods in a foreign market below their cost of production, or selling goods in a foreign market at below their "fair" market value

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86

licensing

When a firm (licensor) provides the right to manufacture its product or use its trademark to a foreign company (licensee) for a fee (royalty).

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87

franchising

A contractual agreement whereby someone with a good idea for a business sells others the rights to use the name and sell a product/service in a given area.

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88

contract manufacturing

A foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark. A form of outsourcing.

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89

join venture

A partnership in which two or more companies join to undertake a major project.

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90

strategic alliance

A long-term partnership between two or more companies established to help each company build competitive market advantages.

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91

foreign subsidiary

A company owned in a foreign country by another company called the parent company. The most common form of FDI.

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92

foreign direct investment

The buying of permanent property and businesses in foreign nations.

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93

multinational corporation

A company that manufactures and markets products in many different countries and has multinational stock ownership and management.

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94

exchange rate

The value of one nation's currency relative to the currencies of other countries.

High value of the dollar - Dollar is trading for more foreign currency; foreign goods are less expensive.

Low value of the dollar - Dollar is trading for less foreign currency; foreign goods are more expensive.

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95

devaluation

Lowers the value of a nation's currency relative to others.

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96

trade protectionism

The use of government regulations to limit the import of goods and services.

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97

import embargo

A complete ban on the import or export of a certain product or the stopping of all trade with a particular country.

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98

common market

A regional group of countries with a common external tariff, no internal tariffs and coordinated laws to facilitate exchange among members.

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99

outsourcing

A process by which a firm contracts with other companies to do some or all of its functions.

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100

ethics

The standards of moral behavior. Behaviors that are accepted by society as right versus wrong.

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