Intro To Business Chapters 1 Through 11

Front 1

Business Cycles

Back 1

The periodic rises and falls that occur in economics over time.
4 phases are;
Boom
Recession
Depression
Recovery

Hint 1

Details of 4 phases
Boom- business is plentiful
Recession- two or more consecutive quarters of decline in the GDP. Prices fall, consumers stop buying, and businesses fail. In result, raise unemployment. Creating a drop in living standards
Depression- a severe recession usually accompanied by deflation
Recovery-When the economy stabilizes and starts to grow; restarting the cycle again.

Front 2

Capitalism

Back 2

An economic system in which all or most of the means of production and distribution are privately owned and operated for profit.

Front 3

What are the basic rights people have under Capitalism?

Back 3

The right to;
-own private property
-own a business and keep all profits after taxes.
-freedom of competition
-freedom of choice

Front 4

Deflation

Back 4

prices decline (opposite of inflation)

Front 5

Demand

Back 5

The quantity of products that people are willing to buy at different prices at a specific time.

Front 6

Depression*

Back 6

A severe recession, usually accompanied by deflation.

Front 7

Economics

Back 7

The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and idividuals.

Front 8

Gross Domestic Product (GDP)

Back 8

The total value of final goods and services produced in a country in a given year.

Front 9

Inflation

Back 9

A general rise in the prices of goods and services over time.

Front 10

National Debt

Back 10

The sum of government deficits over time.

Front 11

Recession

Back 11

Two or more consecutive quarters of decline in the GDP.

Front 12

Supply

Back 12

The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time.

Front 13

What are the advantages and disadvantages of socialism?

Back 13

Advantages:
-Social Equality
-Receive more education, health care, and other benefits.
- Work fewer hours with longer vacations.
Disadvantages:
-Lowers the incentive to start a business or to work hard.
-Higher unemployment rate
-Slower growth rate than capitalist countries.

Front 14

How does Socialism differ from Communism?

Back 14

Under communism the government owns almost all major production facilities and dictates what gets produced and by whom. Complete control. A lot of personal restrictions as well such as religious freedom.

Front 15

What are the key terms used to describe the U.S. economic system?

Back 15

Gross Domestic Product, Unemployment rate, and consumer price index (CPI)

Front 16

unemployment rate

Back 16

percentage of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks.

Front 17

Consumer Price Index (CPI)

Back 17

Monthly statistics that measure the pace of inflation or deflation.

Front 18

Business

Back 18

Any activity that seeks to provide goods and services to others while operating at a profit.

Front 19

Factors of Production

Back 19

The resources used to create wealth; land, labor, capital, entrepreneurship, and knowledge.

Front 20

Outsourcing

Back 20

Contracting with other companies (often in other countries) to do some or all of the functions of a firm, like its production or accounting tasks. ~Ex: S. Korea and Hyundai.

Front 21

Productivity

Back 21

The amount of output you generate given the amount of input. (Hours worked).

Front 22

Profit

Back 22

The amount of money a business earns above and beyond what it spends for salaries and other expenses.

Front 23

Identify groups of stakeholders that are important for business.

Back 23

Stockholders
Customers
Surrounding Community
Environmentalists
Dealers (Retailers)
Employees
Suppliers
Media
Bankers
Government Leaders

Most important is listening to employees needs.
Always pay attention to each because turning one against you is bad for business.

Front 24

What are some ways that a business can meet and great the competition?

Back 24

Exceeding Customer Expectations with a better product and price.
Restructuring and Empowerment by handing some of the managers power down to the front line workers. Give the front desk and sales people the authority, responsibility, training and equipment needed. That way customers needs are met quickly.

Front 25

Balance of Trade

Back 25

The total value of a nation's exports compared to its imports measured over a particular period.
A good tool to measure global trade.

Front 26

Trade Protectionism

Back 26

The use of government regulations to limit the import of goods and services.
Tariff
Import Quota
Embargo

Front 27

Tariff

Back 27

A tax imposed on imports

Front 28

Import Quota

Back 28

A limit on the number of products in certain categories that a nation can import.

Front 29

Embargo

Back 29

A complete ban on the import or export of a certain product, or the stopping of all trade with a particular company.

Front 30

North American Free Trade Agreement (NAFTA)

Back 30

Agreement that created a free-trade area among the United States, Canada, and Mexico.

Front 31

What is trade protectionism?

Back 31

The use of government regulations to limit the import of goods and services. Believed to produce more jobs, and allow domestic producers to survive and grow.

Front 32

What is offshore outsourcing? & What is the major concern for the future?

Back 32

Offshore outsourcing is purchase of goods from outside a firm rather than inside the company. The fear for the future is that this will take jobs from the U.S.

Front 33

What is insider trading? Give example

Back 33

An unethical activity in which insiders use private company information to further their own fortunes or those of their family and friends.
Example: Martha Stewart

Front 34

Acquisition

Back 34

One company's purchase of the property and obligations of another company.

Front 35

Leveraged Buyout (LBO)

Back 35

An attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing.

Front 36

What are the advantages and disadvantages of a corporation?

Back 36

ADVANTAGES
-more money for investment
-limited liability
-perpetual ease of ownership change
-ease of drawing talented employees
-separation of ownership from management
DISADVANTAGES
-initial cost
-paperwork
-size
-difficulty of termination
-double taxation
-possible conflict with board of directors

Front 37

What is a merger?

Back 37

The result of two firms forming one company. Kind of like a marriage.

Front 38

What are leveraged buyouts?

Back 38

A leveraged buyout is an attempt by the managers and employees to borrow money and purchase the company.

Front 39

What does it mean to take a company private?

Back 39

Individuals who, together or alone, buy all the stock for themselves are said to take the company private.

Front 40

Business Plan

Back 40

A detailed written statement which describes;
-the nature of the business
-the target market
-the advantages the business will have in relation to competition
-the resources and qualifications of the owner(s).

Front 41

Incubators

Back 41

Centers that offer new businesses low-cost offices with basic business services.

Front 42

Small Business Administration (SBA)

Back 42

A U.S. government agency that advises and assists small businesses by providing management training, financial advice, and loans.

Front 43

venture capitalists

Back 43

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

Front 44

Why do many small businesses fail?

Back 44

Many small businesses fail because of managerial incompetence and inadequate financial planning.

Front 45

Autocratic Leadership

Back 45

A leadership style that involves making managerial decisions without consulting others. "All deciding leader" or "Hard-ass Boss"

Front 46

Management

Back 46

The process used to accomplish organizational goals through the "Four Functions of Management"
Planning, Organizing, Implementing, and Controlling

Front 47

Objectives

Back 47

specific, short-term statements detailing how to achieve the organization's goals.

Front 48

What are the four functions of management?

Back 48

Planning- Setting organized specific goals, developing strategies, and determining resources.

Organizing- Making charts, training employees, to overall achieve the organizations goals and objectives.

Implementing- (Leading)- Giving assignments, explaining routines, clarifying policies, and providing feedback upon performance.

Controlling- Monitoring the company's performance relative to the set standards in the planning process. Rewarding good performance, and taking corrective action when necessary.

Front 49

What is a SWOT analysis

Back 49

Based on change in business
S&W- Strengths and Weaknesses that are Internal within the company. Not as dynamic but are key to the Planning process of a company manager.

O&T- Opportunities and Threats that occur externally. (Economy, legislation, competition)

Front 50

What skills do managers need??

Back 50

Conceptual Skills- ability to see the organization as a whole "look at the big picture."

Human Relations- ability to communicate and motivate

Technical Skills- ability to performs tasks such as selling products or developing software.

Front 51

Economies of Scale

Back 51

Where companies can reduce production costs if they can purchase the raw materials they need in bulk. The average cost of goods goes down as production levels increase.

Front 52

Line organization

Back 52

Employees who are part of the vertical chain of command that is responsible for achieving organizational goals.. Advised and assisted by the staff personal, who are on the horizontal side of things. (Marketing, Legal, Human Resources).

Front 53

Why do firms outsource some of their functions?

Back 53

Labor can be cheaper with another company. Make the general parts but send them to another country to be assembled for cheap.

Front 54

Computer-aided Design (CAD)

Back 54

The use of computers in the design of products.

Front 55

What is just-in-time inventory control?
(JIT)

Back 55

A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line. That way the supplies don't have to be stored in a warehouse, which costs extra money.

Front 56

Management by Objectives (MBO)

Back 56

A system of goal setting and implementation; it involves a cycle of discussion, review, and evaluation of objectives among top and middle-level managers, supervisors, and employees.

Front 57

Differentiate among Theory X and Theory Y.

Back 57

Theory X- The average person dislikes work and avoids it if possible. Employees prefer to be controlled and directed. They seek security not responsibility, must be intimidated by managers to perform, and they are motivated by financial rewards.

Theory Y- Employees like work, because its a natural part of life. They prefer limited control and direction. Employees perform better in work environments that are non intimidating. Employees will seek responsibility under proper work conditions, and are motivated by many different needs.

Front 58

How is performance evaluated?

Back 58

When recruiting an employee, the manager should have a clear set of established performance standards that are clearly communicated. Then performance should be compared to those agreed expectations, and discussed according to results.
-Take corrective actions when needed. (Additional training, termination).
-Reward for good performance
(Promotion, compensation).