Mid-Term 2

Study Guide

Intro to Business I

Term Test II

Study Guide - Chapters 5, 6, 7 & 8


How to Study Effectively

Using the material from the e-text, PowerPoints, and Chapter questions for Chapters 5, 6, 7, & 8:

  • Create one page summaries for each chapter

  • Make flashcards for key definitions

  • Redraw key frameworks (SWOT, POLC, ownership comparisons)

  • Practice writing 2–3 paragraph answers for major topics

  • Review chapter question documents regularly

CHAPTER 5 – Ethics and Social Responsibility

Key Concepts & Definitions

  • Ethics: Standards of moral behaviour accepted by society as right versus wrong; ethics go beyond simply obeying the law.

  • Ethical decisionmaking checklist: 

    • Is it legal?

    • Is it balanced?

    • How will it make me feel about myself?

  • Compliance based ethics codes: Focus on preventing illegal behaviour through rules, controls, and penalties.

  • Integrity based ethics codes: Emphasize shared values, ethical culture, and personal responsibility.

  • Whistleblowers: Individuals who report illegal or unethical behaviour; in Canada, publicsector whistleblowers are protected under specific legislation.

  • Corporate Social Responsibility (CSR): The concern businesses have for the welfare of society.

  • Triple Bottom Line: Measuring performance based on people, planet, and profit.

  • Social audit: A systematic evaluation of an organization’s progress toward socially responsible goals.

What You Should Be Able to Do

  • Explain the difference between ethics and legality

  • Apply the ethical checklist to real business situations

  • Describe management’s role in setting ethical standards

  • Explain CSR and responsibilities to stakeholders (customers, employees, investors, society, environment)

  • Explain the purpose of social audits and the triple bottom line

CHAPTER 6 – Forms of Business Ownership

Key Concepts & Definitions

  • Sole proprietorship: A business owned and usually managed by one person.

  • Unlimited liability: Owners are personally responsible for all business debts and damages.

  • Partnership: A business owned by two or more people. 

    • General partner: Manages the business and has unlimited liability

    • Limited partner: Invests money but does not manage and has limited liability

  • Corporation: A legal entity separate from its owners, with limited liability.

  • Public vs private corporation

  • Articles of incorporation: Legal authorization to operate as a corporation.

  • Franchise: An agreement where a franchisor sells the right to use a business name and sell a product/service to a franchisee.

  • Cooperative: A member owned organization formed to meet common needs; profits are shared among members.

What You Should Be Able to Do

  • Compare sole proprietorships, partnerships, and corporations

  • Explain liability differences across ownership forms

  • Identify advantages and disadvantages of each form

  • Explain how franchising works

  • Explain how cooperatives differ from for profit businesses

CHAPTER 7 – Entrepreneurship and Starting a Small Business

Key Concepts & Definitions

  • Small business: Independently owned and operated, not dominant in its field, and limited in size.

  • Entrepreneurship: Accepting the challenge of starting and running a business.

  • Reasons people become entrepreneurs:
    Opportunity, profit, challenge, independence, family influence.

  • Entrepreneurial attributes:
    Selfdirected, actionoriented, energetic, tolerant of uncertainty, able to learn quickly.

  • Intrapreneurs: Entrepreneurs who innovate within existing organizations.

  • Business incubator: Provides space, services, and support for new businesses.

  • Business accelerator: Provides mentorship, investor access, and structured growth support.

  • Business plan: A written document describing the business idea, market, competition, management, and finances.

  • Financing options: 

    • Bootstrapping

    • Angel investors

    • Venture capital

    • Crowdfunding

What You Should Be Able to Do

  • Explain why people choose entrepreneurship

  • Identify characteristics of successful entrepreneurs

  • Explain why small businesses are important to Canada

  • Describe sections of a business plan

  • Compare financing options and explain why an entrepreneur might choose crowdfunding

CHAPTER 8 – Management and Leadership

Key Concepts & Definitions

  • Management: The process of achieving organizational goals through planning, organizing, leading, and controlling (POLC).

  • Planning: Setting vision, goals, objectives, and strategies.

  • Vision: Why the organization exists and where it is headed.

  • Goals vs objectives: 

    • Goals: broad, longterm

    • Objectives: specific, short term

  • SWOT analysis: 

    • Strengths & Weaknesses (internal)

    • Opportunities & Threats (external)

  • Strategic, tactical, and operational planning

  • Decision making steps:
    Define problem → gather information → develop alternatives → choose → implement → evaluate.

  • Leadership styles: 

    • Autocratic

    • Participative (democratic)

    • Free rein

  • Controlling: Establishing standards, measuring performance, comparing results, communicating results, and taking corrective action.

What You Should Be Able to Do

  • Explain each POLC function

  • Conduct and interpret a SWOT analysis

  • Identify appropriate leadership styles for different situations

  • Describe the controlling process and why standards matter