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214 Cards in this Set
- Front
- Back
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grievance procedure
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procedures an employee must go through when he thinks there has been a violation of contract
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labor impasse
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a deadlock in the negotiation process, work stopage
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grapevine
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the passing of information from one person to another through gossip and rumor
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business cycle
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fluctuations in economic activity bout its long term growth trends- peaks, recessions, contractions, expansions, depressions
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market capitalization
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measurement of the size of businesses, found by multiplying price of a share times number of shares outstanding
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significance of consumer spending
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directly influences the GDP and effects the economy. they are what drives the economy.
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line of credit
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a credit facility that allows people to take advances during a defined period up to a preset limit and repay at the borrowers descretion
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balance of trade
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measures the difference between the value of a nations exports and imports
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open order
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leave your order in until you cancel
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limit order
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you set price limits for that one day
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short selling
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borrowing stock in hope price will go down, pay back at a lower price
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bond ratings
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evaluate the level of risk associated with a specific bond investment strongly influencing the interest rate the issuer must offer.
-AAA= highest grade,lowest risk, lowest interest rate C/D/DDD= lowest grade,highest risk, highest interest rate |
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stocks
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ownership of a corporate share
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bonds
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represent indebtedness of the issuer (gain interest)
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sole proprietorship
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owned by 1 person, most widely used in America
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partnership
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legal association of 2 or more people as co-owners
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LLC
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limited liability corporation-combines tax benefits of a partnership with liability protection of a corporation
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Corporation
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separate legal entity chartered by a state, legal rights of a person with assets and liabilities separate from those of the owner
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Theory X
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people are lazy and need to be motivated, don't care, just get through the day
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Theory Y
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self starting, people will motivate themselves, create innovative change
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FDIC
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insures the deposits of members banks up to $100,000 per depositor. All national banks are members
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significance of caring
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#1 characteristic that separates mediocre to great leaders, ability to make the touch decision but in a caring way
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niche
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a specific segment of the market that involves high level of specialization, what small business look for
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information technology
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the processing and management of information and data
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revenues
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sales, earned interest, royalties, rents (income)
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expenses
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cost of goods sold, all operating expenses
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assets
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things you own
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liabilities
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things you owe
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capitalism
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profit, competition, freedom of choice, right to private property, supply and demand
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socialism
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state owns basic industries but some private industries exist
-profits only in private sector, high taxes |
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communism
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state controls everything, profit only in sectors allowed by the state, government allocation of all resources
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medium of exchange
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anything of value which is generally accepted is a means of payment for something
-coins, currency paper, credit cards |
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budget surplus
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if revenue exceeds spending in a fiscal year
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budget deficit
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if spending exceeds revenues in a fiscal year
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equilibrium
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the point at which quantity supplied and quantity demanded are in balance
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supply
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quantity available for sale at various prices
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demand
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quantity demanded at various price levels
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multiplier effect
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snowballing impact of a change in one economic variable on a whole series of related economic factors
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Small Business Administration
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government agency set up to help small businesses succeed
-loans, "setaside" certain jobs only for small businesses -provide training and consulting |
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significance of information and knowledge
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speed and the ability to change and keep current with the latest technology
-dark side: loss of personal communication |
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Hawthorne study
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resulted in, if you show employees appreciation that will increase productivity
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mediation
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3rd party involvement, outcome not binding
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arbitration
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method used to settle disagreements between the company and an employee when the employee believes their rights under an agreed contract have been violated. results are binding
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venture capitalist
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an individual or company who finances someone else's ideas
-usually looking for high growth potential to provide a high rate of return on investment, as well as part ownership in the venture |
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Real GDP
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GDP= annual value of goods and services produced within a country's orders by both domestic and foreign firms
Real GDP= GDP adjusted for inflation |
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mergers
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two or more companies joining together to form one company
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acquisitions
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purchase of an entire company or part of a company by another
-most are unsuccessful because companies ignore the human factor |
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discount rate
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the rate the fed charges the member banks for loans
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balance of payments
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measures the payments that flow between any individual country and all other countries
-used to summarize all international economic transactions |
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business incubators
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programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources to services
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national labor relations board
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agency of the US government, conduct eletions for labor union representation and with investigation and remedying unfair labor practies
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scientific management
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style of management which analyzes the synthesis work flow processes, improving labor productivity
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leading economic indicators
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an economic statistic (employment rate, GDP) that indicates how well the economy is doing and how well it will do in the future
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margin trading
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investor borrows part of cost of a securities purchase from broker
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capital gains
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the increase in a stocks value from the time you purchased it
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dividends
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profits distributed periodically to shareholders
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local unions
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workers in a single location with strong common interests
-deal directly with local management on day to day issues |
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national unions
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compose of several local unions, responsible for new organizing efforts, negotiating industry wide contracts, items of national interest
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labor federation
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promote overall political objectives of the labor movement, support collecting bargaining
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economic system
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the way society allocates its resources and converts them into goods and services for customers. implemented by managers and supported by workers, consumers, and government
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strategic plan
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companies main business focus over an extended time (3-5 years), how the mission statement can be achieved
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tactical plan
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(1-2 years)- plan by middle management that are consistent with the strategic plan- general actions plan to allocate resources to move the company towards the mission statement
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operating plan
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yearly/monthly/daily plans
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the Fed and bonds
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the fed sells bonds to increase the amount of money in banks to check inflation. if people sell bonds increases the amount of money supply in order to stimulate economy
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federal reserve board
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7 member board, create nations monetary policy by influencing money and credit
-supervise and regulate banks -provide financial services to public, government, and banking industry |
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marketing plan
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conception (product ideas), pricing, promotion, distribution (physical place)
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marketing strategy
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an overall plan for identifying a market, selecting a target market, then developing a marketing mix that will satisfy this target
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market
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people with the means to purchase
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market segmentation
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dividing the total market into groups with similar characteristics
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basis of market segmentation
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demographic (age, sex, income, occupation, education), geographic, psychographic (lifestyle, attitudes), undifferentiated (everyone is potential buyer)
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target market
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specific group who companies try to sell to
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Marketing Mix
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4 P's- product, price, promotion, distribution (place)
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product
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ideas, goods and services
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marketing
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is key business function because of the direct interchange with customer.
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4 major utilities
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form, time, place, ownership
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form utility
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shape, size, features
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time utility
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product available when the customer wants it
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place utility
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where customer wants it
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ownership utility
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taking possession
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the production era
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seller's market
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the sales era
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buyer's market
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seller's market
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more demand than supply- US prior to 1930s- can sell everything- charge more for products- growing economy
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the marketing concept
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"customer is king"
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celebrity promotion
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high priced persuasion
ex: tiger woods 100$ million 5 year deal with Nike |
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the global market
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international business
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strategic market planning
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1) achieve overall comp. strategy (alignment)
2) establish goals, objectives, timed targets a) market share- % of total market 3) market research- determine if product will satisfy demand 4)internal capabilities- make/buy/outsource/offshore 5) create plan (specific) |
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the total product concept
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the product, brand name, package, warranty, customer service, product image
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major product classifications
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consumer products, industrial products
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convenience goods
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products that are purchased frequently, found in many types of outlets, "intensive", ex: deodorant
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shopping goods
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sold in a limited number of outlets, "selective", ex: designer jeans
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specialty goods
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high priced, few outlets, "exclusive", ex: rolex watches
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major functions related to product strategy
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research, product development, product life cycle, product line
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research
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identifying opportunities- vs. going in blind! personal interview
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product development
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based on research- best product from many- keeps product fresh in eyes of changing demands
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product life cycle
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introduction, growth, maturity, decline
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product line
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a group of related products with use similarities
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product mix
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all of a firm's product lines
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price
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exchange value- how much willing to buy at given amount
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price skimming
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introduces a product at an artificially high price to earn high profits before competitors enter
-can't sustain |
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penetration pricing
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introduces a product at a low price to build volume quickly and discourage competitive entry
-has to be profitable or can't sustain |
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the promotional mix
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advertising, personal selling, sales promotion, publicity and public relations, promotions
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promotion
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aka marketing communications, tools
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push strategy
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thrust of promotional effort is through wholesalers and retailers
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pull strategy
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product promotion is directed from manufacturer directly to consumer
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telemarketing
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phone, usually unsolicited
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retail selling
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customer visits retail store
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expert selling
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specialty items- salesman must have expert knowledge of product
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missionary selling
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salesperson visits customer- hope to create client- industrial sales
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creative selling
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solutions- develop skillful proposal so solve customers needs- consulting
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team selling
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team of experts- offer complete support
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distribution channels
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path that products follow
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most popular channel of distribution for consumer goods
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manufacturer -> wholesaler -> retailer -> consumer
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physical distribution activities
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transportation, inventory planning and control, warehousing, materials handling
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FOB Destination
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indicates that the common carrier bills transportation to shipper, shipper recovers by including it in the price to buyer.
-no extra shipping price |
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FOB shipping point
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indicates that the buyer pays transportation to carrier, separate from seller's charge
FOB= "Free on Board" |
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Operations and Production Management (OPM)
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producing products that customers want by location planning, facilities and layout planning, capacity planning, process planning, and design of operational systems
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OPM interacts with...
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Marketing (what customers want), Engineering (defines design methods, processes, time standards), Accounting (cost of raw material conversion to product), Human Resources (# and skills of people)
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the conversion process
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input (raw materials or parts) -> conversion process (goods in process) -> output (finished goods)
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types of production processes
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assembly, analytic, synthetic, extractive
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assembly
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puts parts together
ex: steel converted into parts- cars |
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analytic
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breaks down raw materials
ex: crude oil to gasoline |
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synthetic
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changes materials into entirely different products
ex: synthetic oil |
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extractive
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removes product from the earth
ex: coal mining |
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continuous manufacturing process
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many of product produced continuously
ex: assembly line |
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intermittent manufacturing process
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small quantity of product is produced- "stop and go"
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mass production
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uniform products in great quantities
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major features of mass production
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specialization of labor, mechanization, standardization
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specialization of labor
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break down into simplest components
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mechanization
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use of machines
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standardization
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uniformity in goods or parts
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Industrial Revolution
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major factor in the transition of US economy from agricultural base to the greatest industrialized nation in the world.
- now transformed to service economy |
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Assembly line
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series of work stations at which each worker performs a specialized task in the production process to build a complete product
-henry ford |
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automation
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using or competing with a machine
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cellular manufacturing
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growing in popularity, small independent simple processes to make complete product in small area
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computer aided design
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computers aid in design engineering
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computer aided manufacturing
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analyze product design in order to assure it can be produced
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process layout
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organized by functions performed. route is tailored for specific product
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fixed-position layout
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product stays in one place, workers and equipment come to it.
ex: home construction |
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product layout
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involves an established sequence of operations, often an assembly line
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accounting
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-the system that business uses to measure financial performance
-the process of developing and providing reliable financial information to those who have a need, either inside or outside the company, to support sound decision making |
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financial statement
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use balance sheet, income statement, statement of cash flow to evaluate past performance, present conditions, and future prospects
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statement of cash flow
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cash to meet obligations
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income statement
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financial performance in a defined period of time
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"the numbers"
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process of developing and providing reliable financial information for decisions to be made
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budget
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amount of money allocated for a leader and a department to carry out assigned responsibilities
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computer technology and Management Information Systems have...
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made important contributions to the modernization of the accounting process, and have significantly improved the accuracy and timeliness of financial information
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the accounting process
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collect, record, classify, verify, summarize/report/analyze
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Generally Accepted Accounting Principles
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used by all accounting firms and publicly held companies
-AICPA, FAF, FASB, SEC |
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American Institute of Certified Public Accountants (AICPA)
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appoints
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management accounting (inside the company)
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managers (planning, budgeting, decision making), owners (general oversight, financial health), labor unions (requests)
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financial accounting (outside the company)
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government (regulation, tax collection), creditors (loans), stock market analysis (invest money), competitors (insights)
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Financial Accounting Foundation Board (FAF)
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appoints
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Financial Accounting Standards Board (FASB)
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establishes standards
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Securities and Exchange Commission (SEC)
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approves
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certified public accountant (CPA)
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certified in the state, resides by meeting state requirements, passes a 2 1/2 day accounting examination
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auditing
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accounting records to assure their accuracy
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key roles of public accountants
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tax services, consulting, financial planning
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key roles of private accountants
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designing systems, interpreting financial statements/trends, internal auditing, cost, tax
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assets=
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liabilities (what you owe) + owner's equity
-assets, liabilities, owner's equity are reported on the financial statement called the balance sheet |
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current assets
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cash within a year
on balance sheet |
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fixed assets
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property, plant and equipment
on balance sheet |
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intangible assets
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items of value with no physical form, such as goodwill and patents
on balance sheet |
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current liabilities
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payment due in one year or less
on balance sheet |
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long term liabilities
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payment of debt that is not due for one year or more
on balance sheet |
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costs of goods sold=
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beginning inventory + purchases - ending inventory
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gross profit=
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revenues - costs of goods sold
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net income/profit=
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gross profit - operating expenses - taxes
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earnings per share=
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net income/common shares outstanding
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return on sales=
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net income/ net sales
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return on equity=
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net income/total owner's equity
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current ratio=
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current assets/current liabilities
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quick ratio=
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quick assets/current liabilities
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activity ratios
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inventory turnover= cost of goods sold/average inventory
inventory turnover ration measures the number of times merchandise moves through a business in a year |
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debt ratios
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debt to equity ratio= total debt/owner's equity
debt to total assets= total debt/total assets -debt ratios measure a firms ability to borrow money and are indicators of a firms degree of fiscal conservatism |
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major responsibilities of the financial manager
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to develop a financial plan, to determine the best sources of money
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line of credit
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an agreement with a bank to make a certain amount of credit available on an as-needed basis
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commercial paper
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unsecured promissory notes
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leverage
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using borrowed money to make money
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factoring
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selling accounts receivable
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challenges of world vs. national economy
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monetary exchange rates, cultural differences, government issues, international trade associations, availability of capital
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absolute competitive advantage
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resulting from natural resources
ex: Saudi arabia= oil |
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comparative competitive advantage
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result of productivity of the work force
ex: china with many products or Japan with electronics |
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imports
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the value of ll goods and services shipped into the US from foreign countries
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exports
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the value of all goods and services shipped out of the US to foreign countries
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Balance of Trade
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measures the difference between the value of a nation's exports and imports
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negative balance of trade
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when value of imports exceeds value of exports a "negative" or unfavorable balance of trade exists
-deficit US has large trade deficit |
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positive balance of trade
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balance of trade is "positive" or favorable when exports exceed imports
-surplus |
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US trading partners
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Canada is largest trading partner for imports and exports
Mexico is 2nd China is rapidly becoming largest exporter to US (2nd), largest negative balance of trade- imports over 5 times more than exports |
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Balance of Payments
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measures total flow of money into and out of a country
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foreign aid
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money flowing to another country
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trade flow of goods and services
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japanese car in- payment out
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investments
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japanese buying land and building a plant in Indiana
-part of balance of payments |
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tourist spending
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money of japanese tourists spent at disneyland
-part of balance of payments |
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foreign direct investment in the United States
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largest investor is UK, then Netherlands, the Germany, then Japan, then Canada
-they account for over 1/2 of all foreign investments |
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United States Direct Investment Abroad (USDIA)
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3 host countries- UK, Canada, Netherlands- account for more than 1/3 of total position
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Sarbanes/Oxley
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25$ billion cost to corporate america- double cost of compliance in UK- debate: are increases in jail terms and loss of wealth enough to deter manipulation
-manipulation= % probability of being caught x penalty ex: 10% chance of being caught x 10 years in prison= 1 year |
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exchange rates
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the value of one nation's currency relative to others
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devaluation
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decrease in the value of one country's currency compared to currency of other countries
- makes a nation's product more affordable in foreign countries while raising the price of foreign goods at home |
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impact of falling US dollar value
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fewer units or foreign currency are required to purchase each dollar -> american products become cheaper for foreign buyers, increasing exports. price of imports goes up, thereby increasing domestic demand for US products
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Multination Corporation (MNC)
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US is home to 1/3 of the top 500 MNCs in the world. Japan is next with 25%.
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challenges of managing across national boundaries
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differing government regulations, union operations, economic infrastructure, management styles, language issues, political climates
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International Business Activities
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low degree of risk= trade (importing and exporting)
Moderate degree of risk= contractual agreements (franchising, licensing, production agreements) High degree of risk= direct investment (acquisitions, joint ventures) |
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Government tools
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tariffs, bribery laws- can block sale of companies if not in national interest
-US import/export bank- loans to nations |
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International Monetary Fund (IMF)
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-UN agency
-promotes international trade -makes short term loans to member nations that need assistance in maintaining financial stability |
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World Bank
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-UN agency
- provides low interest long term loans for specific economic development projects to underdeveloped and developing countries |
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International Organization for Standardization (ISO)
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sets global technical standards in areas dealing with international commerce
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World Trade Organization (WTO)
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-149 member nations
-general mission is to assure equitable trade among member nations -US is in it |
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European Union (EU)
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-25 European nations
-free trade among members -standard tariffs by members on nonmembers |
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Free Trade Areas
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members trade among themselves without restrictions
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Customs Unions
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Free Trade Area + Standard Tariffs on Nonmembers
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North America Free Trade Agreement (NAFTA)
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-formed by US, Canada, and Mexico
- phasing out all tariffs -US is in |
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Organization of Petroleum Exporting Countries (OPEC)
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cartel of major crude oil producers
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Asian Pacific Economic Community (APEC)
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-22 countries
-liberalize trade in the Pacific Rim -US is in |
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what international trade agreements are the US a part of
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World Trade Organization, North American Free Trade Agreement, Asian Pacific Economic Community
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