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17 Cards in this Set
- Front
- Back
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What is an organization composed of (three) and describe
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Boundaries
-internal - between divisions -external - everything outside firm Goals -assume more than one Deliberately Structured Tasks -position - set of tasks -job - person in a position Social Inventions |
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What makes a firm for-profit (three) and describe
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Legal existence and identity
-sole proprietorship, partnership, corporation Rights and Obligations -what the law allows the firm to do -labor contracts Creation of Economic Wealth |
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Change (three)
-Drivers -Dynamics |
Rate: how quickly it occurs
Magnitude: how large is the change Uncertainty: not knowing the future of the market -The cause of change -The cause of the change in a driver *the more drivers/dynamics, the more complex the environment |
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What is an environment
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everything that is outside of the firm; compliment of the firm
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What are long-term trends in firms/causes of change in firms environment (five) and describe
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Deregulation - fewer constraints and controls; regulated firms have no sense of competition, once deregulated firms often fail
Shift towards market economy Globalization - shipping jobs around the world; trading and manufacturing in foreign countries Technology Break up of monopolies/oligopolies |
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Transaction
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interactions between boundaries
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Management vs. Managing
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set of employees with a certain set of responsibilities vs. actions used to satisfy said responsibilities
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4 Types of Responsibility
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Personal accomplishments
Accomplishments of others Tactical business issues (current operations) Strategic Business Issues (long-term operations) |
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Authority
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rights the firm builds into a position that may be used to make certain decisions or commit resources to the firm
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Empowerment
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increases the responsibilities of non-managers
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Heuristics
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standard procedure to fix routine problems
-when faced with a non-routine problem, a new way to fix it is created. if problem persists, a procedure is drawn out. |
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Economic Profit vs. Accounting Profit
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profit vs. net income
surplus revenue created after all costs to create this revenue from indefinite past to indefinite future vs. surplus revenue in a certain period of time over all costs in that time to produce that revenue |
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Five sources of Investment
*what do they involve |
debt
stock/dividends current revenue retained earnings sale of assets * all involve risk |
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Stakeholders
-Definition -6 types -Dominant Coalition --describe |
-any party that has invested in the success of the firm
-customers -owners -debt holders -community -employees -government -group with the majority of the money invested in the firm --get to call shots: set goals, how to divide the money, where to allocate resources, etc. |
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Open System Hypothesis
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firms require market transactions to survive and thrive
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Game Theory
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best choice of action for firm A given the actions of firm B
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Governance
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rules used to determine the firm's goals and divide its profit stream
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