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128 Cards in this Set
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Liquidity |
ease with which an asset can be converted into cash |
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Accounting equation |
Assets = Liabilities + Owner’s Equity; used by accountants to balance data for the firms financial transactions at various points in the year |
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Balance sheet |
financial statement that supplies detailed information about a firm’s assets, liabilities, and owner’s equity |
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Risk |
Uncertainty about future events |
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Return |
Gain or loss of profit in a security in a period of time. |
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Economic System |
Nation's system to distribute resources among its citizens |
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Market economic system |
Individual controls production and decisions through supply and demand |
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Planned (command) economic system |
Relies on government to control all or most factors of production and makes all or most decisions |
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GNP Gross National product |
total value of all goods and services produced by a national economy within a given period regardless of where the factors of production are located. |
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GDP gross domestic product |
total value of all goods and services produced within a given period by a national economy through domestic factors of production |
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Recession |
Period which agregate output (measured by GDP) is low |
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Law of Demand |
Buyers will DEMAND more of a product as prices drop and less and they rise |
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Law of supply |
Producers will SUPPLY more of a product as price rises and less as they decrease |
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Consumer price index (CPI) |
Measure of prices of products purchased by consumers in urban areas |
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Factors of production |
resources used in the production of goods and services labor, capital, entrepreneurs, physical resources, and information resources |
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Types of competition |
Perfect, monopolistic, oligopoly, monopoly |
There are 4 |
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Perfect competition |
Where numerous small firms produce identical goods |
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Monopolistic Competition |
Where there are numerous buyers and numerous sellers trying to be different from the competitors |
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Oligopoly |
Handful of (generally large) sellers with the power to influence the price |
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Monopoly |
One producer so it sets prices of its products |
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Stakeholder |
Groups, individuals, and organizations directly affected by the practices of an organization and have a stake in its performance. (Customers, employees, investors, suppliers, local communities) |
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Stockholders (shareholders) |
Owner of shares of stock in a corporation |
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Sarbanes-oxley act of 2002 (Sarbox or SOX) |
Enactment of federal regulation to restore public trust in accounting practices by imposing new requirements on financial acts in publicly traded corporations |
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Import |
Made or grown abroad but sold domestically |
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Export |
Made or grown domestically but shipped and sold abroad |
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Tariff |
Tax on imports |
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Quota |
Restriction on the amount of products of a certain kind that can be exported or imported |
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Embargo |
Government order banking exports or imports of a particular product or all products from a certain country |
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Absolute advantage |
Produce more efficiently than any other country can |
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Comparative advantage |
Produce some products more efficiently than others |
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Licensing agreement |
Contract where firms choose foreign individuals or organizations to make or market their products in other countries |
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Independent agent |
Foreign organization or individual representing an exporter's interest |
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Branch office |
Foreign office for international or multinational firms |
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Strategic alliance |
Joint venture agreement where a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate new business in the partner's country |
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Foreign direct investment FDI |
agreement where a firm buys or established tangible assets in another country |
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Offshoring |
Outsourcing to a foreign country |
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Outsourcing |
When a company pays suppliers and distributors to perform certain business processes or provide materials or services |
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Balance of trade |
Economic value of all products a country exports minus value of the products imports |
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Federal Reserve System aka the Fed |
central bank of the United States, which acts as the government’s bank, serves member commercial banks, and controls the nation’s money supplyFeds |
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Monetary policy |
Management of a country's economic growth by managing the money supply and interest rates |
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European Union EU |
Eliminates or makes uniform most trade barriers affecting is group members |
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NAFTA north America free trade agreement |
Gradually eliminates tariffs and other trade barriers among US, Canada, and Mexico |
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ASEAN association of South East Asian nations |
Organization for economic, political, social and cultural cooperation among southeast Asian nation |
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Four functions management |
Planning, organizing, leading and controlling |
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Planning |
Determining what an organization needs to do and how best to get it done |
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Organizing |
How to arrange resources and activities |
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Leading |
Guiding and motivating employees to meet goals |
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Controlling |
Monitoring performance to ensure goals are met |
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Conceptual management skills |
Ability to think in the abstract, diagnose and analyze different situations and see beyond the present |
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Interpersonal management skills |
Ability to understand and get along with people |
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Technical management skills |
Ability to perform specialized tasks |
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Mission statement |
States how a business will achieve its purpose in the environment it is in |
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Strategic planning |
Decisions about resource allocation, company priorities, and steps to meet strategic goals |
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Tactical planning |
Short term plan to implement specific aspects of a company's strategic plan |
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Operational planning |
Setting short term goals for daily, weekly, or monthly performance |
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Contingency planning |
Identifying aspects of a business or its environment that may entail changes to the strategy |
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Centralized authority |
Decision making authority is held by upper management |
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Decentralized authority |
Great deal of decision making is held by levels of management at different points below the top |
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Departmentalization |
Grouping of functions or activities within an organization |
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Functional departmentalization |
Groups by functions or activities |
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Geographic departmentalization |
Grouping by areas of the country or world served by a business |
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Product departmentalization |
Grouping by specific products or services being made |
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Customer departmentalization |
Grouping to offer products and meet needs for identifiable customer groups |
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Process departmentalization |
Grouping by production processes |
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Span of control |
Number of people supervised by one manager |
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Wide span of control |
Generally in a flat organization structure, usually similar interrelated jobs being performed |
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Narrow span of control |
Usually in tall organizational structures, jobs are usually more diversified and prone to change |
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Tall organizational structures |
Multiple layers of management |
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Flat organizational structure |
Few layers of management |
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Empowerment |
Giving employee a certain level of responsibility for decision making |
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SBA small business administration |
government agency charged with assisting small businesses |
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The Service Corps of Retired Executives (SCORE) |
is made up of retired executives who volunteer to help entrepreneurs start new businesses |
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Franchise |
arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser) |
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Corporation |
Business legally considered an entity separate from owners and is liable for its own debts; owners liability extends only to their investment |
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Corporate Board of directors |
Governing body of a corporation that reports to shareholders and delegates power to run day to day operations while remaining responsible for sustaining its assets |
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Officers |
Top management of corporations |
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CEO chief executive officer |
Top manager responsible for overall performance |
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Common stock |
most basic form of ownership, including voting rights on major issues, in a company |
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Preferred stock |
stock that entitles the holder to a fixed dividend, whose payment takes priority over that of common-stock dividends |
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The Fed board |
7 members appointed by the U.S. President for overlapping terms of 14 years. Large role in controlling the money supply. It determines reserve requirements, within statutory limits |
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Chairperson of the Fed |
The chair of the board serves on major economic advisory committees and works actively with the administration to formulate economic policy. |
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Reserve banks |
12 districts, holds reserve deposits from and sets the discount rate for commercial banks in its geographic region. Reserve banks also play a major role in the nation’s check-clearing process |
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Business plan |
document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how that strategy will be implemented |
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Sole proprietorship |
Owned by one person but has unlimited liability |
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Partnership |
2 or more owners who share operations and financial responsibility for all debts |
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Dividends |
payment to shareholders, on a per-share basis, out of the company’s earnings. |
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Merger |
the union of two corporations to form a new corporation. |
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Horizontal merger |
consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service |
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Vertical merger |
Occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations. |
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Conglomerate merger |
merger between firms that are involved in totally unrelated business activities. |
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Theory x of motivation |
theory of motivation holding that people are naturally lazy and uncooperative |
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Theory y of motivation |
theory of motivation holding that people are naturally energetic, growth-oriented, self-motivated, and interested in being productive |
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Maslows hierarchy of needs |
theory of motivation describing five levels of human needs and arguing that basic needs must be fulfilled before people work to satisfy higher-level needs |
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Classical/scientific motivation theory |
Workers are motivated by money |
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Utility |
Ability to satisfy a human want or need |
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Flextime |
Method of increasing job satisfaction by allowing workers to adjust work schedules on a daily or weekly basis |
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Just in time inventory |
Lean production system that brings together all materials at the precise time they are needed at each stage |
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Civil rights act of 1964, title VII |
Forbids discrimination in all areas of the employment relationship |
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Equal opportunities commission EEOC |
Federal agency enforcing several discrimination related laws |
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Form utility |
Providing products with features customers want |
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Time utility |
Providing products when customers will want them |
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Place utility |
Providing products where customers will want them |
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Possession utility |
Transferring product ownership to a customer by setting selling prices, setting terms for customer credit payments, and providing ownership documents |
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4 P's of marketing |
Pricing, place, promotion, product |
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Marketing mix |
Combination of product, pricing, promotion, and place (distribution) strategies used to market products |
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Product mix |
Group of products that a firm makes available for sale |
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Convenience goods |
Inexpensive goods, consumed rapidly and regularly ex. Milk newspaper |
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Shopping goods |
Moderately expensive goods infrequently purchased ex. Appliances, mobile devices |
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Specialty goods |
Expensive rarely purchased gods ex. Wedding dress |
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Product life |
Series of stages in a products commercial life 1. Introduction 2. Growth 4. Maturity 5. Decline |
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Branding |
Using symbols to communicate qualities of a product made by a particular producer |
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Breakeven analysis |
Identifies sale volume where total cost=total revenue |
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Price skimming |
Setting initially high price to cover new product costs and generate profit |
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Penetration pricing |
Setting initially low price to establish new product in a market |
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Income Statement |
financial statement listing a firm’s annual revenues and expenses so that a bottom line shows annual profit or loss |
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profit |
Difference between revenues and expenses |
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Marketing research |
the study of what customers need and want and how best to meet those needs and wants. |
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Technological environment |
all the ways by which firms create value for their constituents |
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Sociocultural environment |
the customs, mores, values, and demographic characteristics of the society in which an organization functions. |
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Economic environment |
relevant conditions that exist in the economic system in which a company operates. |
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Political legal environment |
relationship between business and government. |
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Leverage |
ability to finance an investment through borrowed funds |
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Debt financing |
long-term borrowing from sources outside a company |
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Equity financing |
using the owner’s funds from inside the company as the source for long-term funding. |
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NASDAQ |
market index that includes all NASDAQ-listed companies, both domestic and foreign, with a high proportion of technology companies and small-cap stocks |
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NYSE Euronext |
cross-border European stock exchange, originally created in 2000 from the merger of the Amsterdam, Brussels and Paris stock exchanges. |
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Benchmarking |
to determine what and where improvements are called for, to analyze how other organizations achieve their high performance levels, and to use this information to improve performance |
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Mass customization |
principle in which companies produce in large volumes, but each item features the unique options the customer prefers. |
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