MGMT1000 Midterm 2

Textbook and Lecture Practice

Ethics

Individual standards or moral values regarding what is right and wrong or good and bad

Business Ethics

Standards of behavior that guide individual managers in their work

Managerial Ethics

Standards of behavior that guide individual managers in their work

Conflict of Interest

Occurs when an activity benefits the employee at the expense of the employer

Corporate Social Responsibility

The idea that a business should balance its commitments to individuals and groups that are directly affected by the organization's activities

Fair-Trade Movement

A movement designed to help workers in developing countries receive fair payments for their work

Organizational Stakeholders

Groups, individuals, and organizations that are directly affected by the practices of an organization and that therefore have a stake in its performance

Consumerism

A social movement that seeks to protect and expand the rights of consumers in their dealings with businesses

Whistle-Blower

An individual who calls attention to an unethical, illegal, and/or socially irresponsible practice on the part of a business or other organization

Insider Trading

The use of confidential information to gain from the purchase or sale of stock

Pollution

The introduction of harmful substances into the environment

Recycling

The reconversion of waste materials into useful products

Service Operations

Production activities that yield tangible and intangible service products

Goods Production

Production activities that yield tangible products

Utility

The power of a product to satisfy human want; something of value

Operations Process

A set of methods and technologies used to produce a good or a service

Operations (or Production) Management

The systematic direction and control of the processes that transform resources into finished goods and services

High-Contact System

A system in which the service cannot be provided without the customer being physically in the system (e.g., transit systems)

Low-Contact System

A system in which the service can be provided without the customer being physically in the system (e.g., lawn-care services)

Capacity

The amount of a good a firm can produce under normal working conditions

Process Layout (Custom-Product Layout)

A way of organizing production activities such that equipment and people are grouped together according to their function

Product Layout

A way of organizing production activities such that equipment and people are set up to produce only one type of good

Assembly Line

A type of product layout in which a partially finished product moves through a plant on a conveyor belt or other equipment

Fixed Position Layout

A way of organizing production activities in which labour, equipment, materials, and other resources are brought to the geographic location where all operations work is done

Flexible Manufacturing System (FMS)

A production system that allows a single factory to produce small batches of different goods on the same production line

Soft Manufacturing

Emphasizes computer software and computer networks instead of production machines

Master Production Schedule

Schedule showing which products will be produced, when production will take place, and what resources will be used

Gantt Chart

Scheduling tool that diagrams steps to be performed and specifies the time required to complete each step

PERT chart

Production schedule specifying the sequence and critical path for performing the steps in a project

Operations Control

Managers monitor production performance by comparing results with plans and schedules

Materials Management

Planning, organizing, and controlling the flow of materials from purchase through distribution of finished goods

Just-In-Time (JIT) Production Systems

A method of inventory control in which materials are acquired and put into production just as they are needed

Material Requirements Planning (MRP)

A method of inventory control in which a computerized bill of materials is used to estimate production needs, so that resources are acquired and put into production only as needed

Bill of Materials

Production-control tool that specifies the necessary ingredients of a product, the order in which they should be combined, and how many of each are needed to make one batch

Manufacturing Resource Planning (MRP II)

An advanced version of MRP that ties together all parts of the organization into the company's production activities

Quality Control

The management of the production process so as to manufacture goods or supply services that meet specific quality standards

Controller

The individual who manages all the firm's accounting activities

Financial Accounting System

The process whereby interested groups are kept informed about the financial condition of a firm

Managerial (or Management) Accounting

Internal procedures that alert managers to problems and aid them in planning and decision making

Chartered Professional Accountant (CPA)

The banner (designation) that is being used to unify the accounting profession in Canada

Chartered Accountant (CA)

An individual who has met certain experience and education requirements and has passed a licensing examination; acts as an outside accountant for other firms

Certified General Accountant (CGA)

An individual who has completed an education program and passed a national exam; works in private industry or a CGA firm

Certified Management Accountant (CMA)

An individual who has completed a university degree, passed a national examination, and completed a strategic leadership program; works in industry and focuses on internal management accounting

Audit

An accountant's examination of a company's financial records to determine if it used proper procedures to prepare its financial reports

Generally Accepted Accounting Principles (GAAP)

Standard rules and methods used by accountants in preparing financial reports

Forensic Accountant

Accountants who track down hidden funds in business firms

Management Consulting Services

Specialized accounting services to help managers resolve a variety of problems in finance, production scheduling, and other areas

Private Accountant

An accountant hired as a salaried employee to deal with a company's day-to-day accounting needs

Accounting Equation

assets = liabilities + owners' equity; used by accountants to balance data for the firm's financial transactions at various points in the year

Asset

Anything of economic value owned by a firm or individual

Liability

Any debt owed by a firm or individual to others

Owners' Equity

Any positive difference between a firm's assets and its liabilities; what would remain for a firm's owners if the company were liquidated, all its assets were sold, and all its debts were paid

Financial Statements

Any of several types of broad reports regarding a company's financial status; most often used in reference to balance sheets, income statements, and/or statements of cash flow

Balance Sheet

A type of financial statement that summarizes a firm's financial position on a particular date in terms of its assets, liabilities, and owners' equity

Current Assets

Cash and other assets that are expected to be converted to cash within a year

Liquidity

The ease and speed with which an asset can be converted to cash; cash is said to be perfectly liquid

Fixed Assets

Assets that have long-term use or value to the firm, such as land, buildings, and machinery

Depreciation

Accounting method for distributing the cost of an asset over its useful life

Intangible Assets

Non-physical assets, such as a patent or trademark, that have economic value in the form of expected benefit

Goodwill

The amount paid for an existing business beyond the value of its other assets

Current Liabilities

Debt that must be paid within a year

Accounts Payable

Amounts due from the firm to its suppliers for goods and/or services purchased on credit; a form of current liability

Accounts Payable

Amounts due from the firm to its suppliers for goods and/or services purchased on credit; a form of current liability

Paid-in Capital

Any additional money invested in the firm by the owners

Retained Earnings

A company's net profits less than any dividend payments to shareholders

Income Statement (Profit-and-Loss Statement)

A type of financial statement that describes a firm's revenue and expenses and indicates whether the firm has earned a profit or suffered a loss during a given period

Revenues

Any monies received by a firm as a result of selling a good or service or from other sources such as interest, rent, and licensing fees

Revenue Recognition

The formal recording and reporting of revenues in the financial statements

Matching Principle

Expenses should be matched with revenues to determine net income for an accounting period

Cost of Goods Sold

Any expenses directly involved in producing or selling a good or service during a given time period

Gross Profit (Gross Margin)

A firm's revenues (gross sales) less its cost of goods sold

Operating Expenses

Costs incurred by a firm other than those included in cost of goods sold

Operating Income

Compares the gross profit from business operations against operating expenses

Net Income (Net Profit, Net Earnings)

A firm's gross profit minus operating expenses and income taxes

Statement of Cash Flows

A financial statement that describes a firm's generation and use of cash during a given period

Budget

Detailed statement of estimated receipts and expenditures for a future period of time

Marketing

An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

Marketing Concept

The idea that the whole firm is directed toward serving present and potential customers at a profit

Value

A relative comparison of a product's benefits versus its costs

Consumer Goods

Physical products purchased by consumers for personal use

Industrial Goods

Physical products purchased by companies to produce other products

Services

Products with non-physical features, such as information, expertise, or an activity that can be purchased

Relationship Marketing

A marketing strategy that emphasizes building lasting relationships with customers and suppliers

Customers Relationship Management (CRM)

Organized methods that a firm uses to build better information connections with clients, so that stronger company-client relationships are developed

Marketing Plan

Detailed strategy for focusing marketing efforts on consumers' needs and wants

Marketing Objectives

The things marketing intends to accomplish in its marketing plan

Marketing Strategy

All the marketing programs and activities that will be used to achieve the marketing goals

Marketing Mix

A combination of product, pricing, distribution, and promotion strategies used to market products

Product

Good, service, or idea that is marketed to fill consumers' needs and wants

Product Differentiation

Creation of a product feature or product image that differs enough from existing products to attract customers

Pricing

The process of determining the best price at which to sell a product

Place (Distribution)

The part of the marketing mix concerned with getting products from producers to consumers

Promotion

The aspect of the marketing mix concerned with the most effective techniques for communicating information about products

Market Segmentation

The process of dividing a market into categories of customer types, or "segments"

Target Market

A group of people who have similar wants and needs and can be expected to show interest in the same products

Product Positioning

The process of fixing, adapting, and communicating the nature of a product to appeal to the selected market

Demographic Variables

Characteristics of populations that may be considered in developing a segmentation strategy

Geographic Variables

Geographic units that may be considered in developing a segmentation strategy

Geo-Demographic Variables

A combination of geographic and demographic traits used in developing a segmentation strategy

Psychographic Variables

Consumer characteristics, such as lifestyles, opinions, interests, and attitudes that may be considered in developing a segmentation strategy