Chapter 8&9

Front 1

Business Organization

Back 1

an establishment formed to carry on commercial enterprise (sole proprietorship is the most common form of Business organization)

Front 2

Sole Proprietorship/Advantages

Back 2

A business owned and managed by a single individual
-Easy to startup
-little legal paperwork/regulations
-full control of business(easy to make decisions)
-sole receiver of profit
-easy to discontinue
-pay regular taxes

Front 3

Sole proprietorships/Disadvantages

Back 3

-unlimited liability
-limited access to capital
-lack of dedicated employees (fringe benefits)

Front 4

Business license

Back 4

authorization to start a business issued by the gov.

Front 5

Zoning law

Back 5

law in a city or town that designates separate areas for residency and for business

Front 6

fringe benefits

Back 6

payment other than wages or salaries (paid vacation, retirement, health insurance)

Front 7

general partnership

Back 7

(most common type of partnership)
-share equal responsibility and liability
(doctors,lawyers,accountants,small businesses, farms etc)

Front 8

limited partnership

Back 8

only one parter is the general partner and has "unlimited liability", the others are limited partners who contribute money alone and can only loose their original investment

Front 9

limited liability partnership (LLP)

Back 9

partnership in which all partners are limited partners
-function similarly to general partnerships
(attorneys,physicians,dentists,accountants)

Front 10

advantages of partnerships

Back 10

-Ease of startup/lack of paperwork
-shared decision making/specialization
-larger pool of capital
-pay regular income taxes (only on income, not on the business)

Front 11

disadvantages of partnerships

Back 11

-except for LLP's, unlimited liability
-decision making conflicts

Front 12

uniform partnership act (upa)

Back 12

if partners do not establish their own acts of partnership they fall under control of the UPA
-requires common ownership interests, profit and loss sharing, and shared management responsibilities

Front 13

articles of partnership

Back 13

a legal partnership agreement which spells out each members rights and responsibilities.

Front 14

assets

Back 14

money and other valuables belonging to an individual or business

Front 15

corporation

Back 15

legal entity owned by individual stockholders

Front 16

stock

Back 16

certificate of ownership in a corporation

Front 17

closely held corporation

Back 17

corporation that issues stock to only a few people, often family members

Front 18

publicly help corporations

Back 18

corporations that sells stock on the open market

Front 19

advantages of corporations

Back 19

-limited liability for owners
-transferable ownership
-large pool of capital
-long life

Front 20

disadvantages of corporations

Back 20

-expense and difficulty of start up
-double taxation (tax on income and dividends)
-potential lose of control by founders
-many legal requirements/regulations(must file annual reports of transactions to SEC)

Front 21

bond

Back 21

a formal contract to repay borrowed money with interest at fixed intervals

Front 22

certificate of incorporation

Back 22

license to form a corporation issued by state government

Front 23

dividend

Back 23

the portion of corporate profits paid out to stockholders

Front 24

horizontal merger

Back 24

the combination of two or more firms competing in the same market with the same good or service. usually with the purpose of increasing efficiency and gaining economies of scale

Front 25

vertical mergers

Back 25

the combination of two or more firms involved in different stages of producing the same good or service. usually with the purpose of eliminating outside suppliers and improving efficiency

Front 26

Conglomerates

Back 26

business combination merging more than three businesses that make unrelated products

Front 27

Multinational corporations

Back 27

large corporation that produces and sells goods/services throughout the world

Front 28

Business Franchise

Back 28

a semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area (wendy's, McDonalds)

Front 29

royalty

Back 29

share of earnings given as payment (to franchise owners)

Front 30

Advantages of Business Franchises

Back 30

-standardized quality
-national advertising programs
-financial assistance (some franchises provide financing to help owners start their business
-centralized buying power(franchises buy supplies in bulk and then sell them to each of their stores, passing on the savings)

Front 31

Disadvantages of business franchises

Back 31

-high franchising fees to wear the company name/must pay royalties
-strict operating standards
-purchasing restrictions (must buy supplies from wherever the franchise owners do)
-only allowed to sell approved products

Front 32

cooperative

Back 32

a business organization owned by a group of individuals for their shared benefit

Front 33

consumer cooperative

Back 33

retail outlet owned by consumers. By making large purchases consumer coop's can obtain goods at a lower price
-require consumers to either have a membership or work a certain amount of hours
(discount clubs,small health stores etc.)

Front 34

service cooperative

Back 34

coop's that provide a service rather than a good
-may offer discounted insurance,banking services, baby sitting

Front 35

producer cooperatives

Back 35

agriculture marketing coop that helps members focus on farming while the coop sell their goods for the highest price

Front 36

labor force

Back 36

all nonmilitary people who are employed or unemployed

Front 37

unEmployed

Back 37

must have work lined up for the future or must be looking for work

Front 38

learning effect

Back 38

the theory that education increases productivity and results in higher wages

Front 39

screening effect

Back 39

the theory that the completion of college indicates to employers that a job applicant is intelligent and hard-working

Front 40

contingent employment

Back 40

a temporary or part-time job
-flexible adjustments to work force to meet reduced demand
-easy to fire employees
-may be paid less/given less benefits

Front 41

derived demand

Back 41

demand that is determined by demand for another service or good (demand for cooks correlates to demand for restaurant meals)

Front 42

productivity

Back 42

value of output

Front 43

higher wages

Back 43

higher demand for labor will increase wages close to the value of output / higher wages increases the supply of labor

Front 44

equilibrium wage

Back 44

the wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market

Front 45

unskilled labor

Back 45

labor that requires no specialized skills, education, or training (dish washer)
-hourly wage

Front 46

semi-skilled labor

Back 46

labor that requires minimal specialized skills and training (lifeguards,word processors)
-hourly wage

Front 47

skilled labor

Back 47

labor that requires specialized skills and training to do tasks such as operating complicated equipment (mechanics, bank tellers, plumbers, firefighters)
-hourly wage

Front 48

professional labor

Back 48

labor that requires advanced skills and education
usually white collar workers who receive a salary (managers, teachers, doctors, bankers, actors)

Front 49

equal pay act of 1963

Back 49

males and females with the same jobs at the same workplace receive the same pay

Front 50

title 7 of the civil rights act

Back 50

prohibits job discrimination on the bases of sex, religion, nationality/ethnicity

Front 51

glass ceiling

Back 51

an unofficial invisible barrier that prevents women and minorities from advancing in businesses dominated by white males

Front 52

featherbedding

Back 52

practice of negotiating labor contracts that keep unnecessary workers on a company's payroll

Front 53

right to work laws

Back 53

a measure that bans mandatory union membership

Front 54

blue-collar worker

Back 54

someone who works in an industrial job, often manufacturing, who receives wages

Front 55

white-collar workers

Back 55

someone in a professional or clerical job who usually earns a salary

Front 56

collective bargaining

Back 56

the process in which union and company representatives meet to negotiate a new labor contract. labor contracts usually want to reach these goals- higher wages/benefits, working conditions,job security

Front 57

mediation

Back 57

a settlement technique in which a neutral mediator meets with each side to try to find a solution that both sides will except(non binding- neither side has to abide)

Front 58

arbitration

Back 58

a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides