Bus 303 Final Exam

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External Factors that have -/+ impact

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Economic, Political/Legal, Demographic, Social, Competition, Global, Technology

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Mixed Economy

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Economy that combines several economic systems. Gov't owns some industries and some are private.

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Factors of Production

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Resources used to create goods and services. Natural resources, labor, capital, entrepreneurship.

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Law of Supply and Demand

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Demand up, Supply down.
Supply up, Demand down.

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Perfect Competition Market Structure

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Large number of small firms that sell similar products. A business can be easily opened or closed.

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Pure Monopoly Market Structure

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Single firm accounts for all industry sales of a particular good or service. There ARE barriers to enter market.

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Monopolistic Competition Market Structure

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A market in which many firms offer products that are close substitutes. Entry into market is relatively easy.

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Oligopoly Market Structure

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Few Firms produce most or all of the output and in which large capital requirements or other factors limit the number of firms.

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Customer Value

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The ratio of benefits to the sacrifice necessary to obtain these benefits, as determined by the customer, reflects the willingness of customers to actually buy a product.

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Relationship Management

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The practice of building, maintaining, and enhancing interactions with customers and other parties to develop long term satisfaction.

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Stakeholders

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Individuals or groups to whom a business has a responsibility; includes employees, customers, the general public, and investors.

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Ethics Code

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A set of guidelines prepared by a firm to provide its employees with the knowledge of what the firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers.

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Levels of Social Responsibility

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Economic responsibility, legal responsibilities, ethical responsibilities, philanthropic responsibilities.

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Strategic Giving

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The practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.

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Exporting (Forms of Entry)

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Process of selling domestically produced goods to buyers in another country.

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Licensing (Forms of Entry)

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Legal process whereby a firm allows another firm to use a manufacturing process, trademark, patent, trade secret, or other property in exchange for the payment of a royalty.

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Contract Manufacturing (Forms of Entry)

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Foreign firm manufactures private-label goods under a domestic firms brand name.

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Joint Venture (Forms of Entry)

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Agreement in which domestic firms buy part of a foreign firm r joins with a foreign firm to create a new entity.

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Direct Foreign Investment (Forms of Entry)

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Active ownership of a foreign company or of manufacturing or marketing facilities in a foreign country.

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Countertrade (Forms of Entry)

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Form of international trade in which part or all of the payment of goods/services is in the form of other goods and services.

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Natural Barriers

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Physical or cultural

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Tariff (Barrier)

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Tax imposed on imported goods.

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Protective Tariff (Barrier)

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Tariff to make imports less attractive to buyers than domestic products.

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Import Quota (Barrier)

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Limit on a quantity that can be imported.

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Embargo (Barrier)

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Total ban on imports

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Buy-National (Barrier)

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Gov't rules that give special privileges to domestic manufacturers.

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Exchange Controls (Barriers)

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Limits on the amount of funds, either earned or invested, that can be withdrawn from a nation at any given time, put in place by a government.

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Comparative Advantage

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Concept that each country should specialize in the products that it can produce most readily and cheaply and trade these products for others from other countries with comparative advantage.

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Corporation

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Legal entity with an existence and life separate from its owners who are NOT personally liable for the entity's debts chartered by the state in which it is formed and can own property, enter into contracts, sue/be sued, and engage in business operations.

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Advantages of a corporation

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Limited Liability, ease of transferring ownership, unlimited life, tax deductions, attract financing.

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Disadvantages of a corporation

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double taxation of profits, cost and complexity of formation, government restrictions.

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C- Corporation

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basic/conventional corporation

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S-Corporation

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Corporation that is taxed like a partnership.

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Merger

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The combination of two or more firms to form a new one.

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Acquisition

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The purchase of a target company by another corporation or by a investor group typically negotiated with the target company board of directors.

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Vertical Merger

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A merger of companies at different stages in the same industry, done to gain control over supplies of resources or to gain access to different markets.

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Horizontal Merger

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A merger of companies at the same stage in the same industry, done to reduce costs, expand product offerings or reduce competition.

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Conglomerate Merger

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A merger of companies in unrelated businesses; done to reduce risk.

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Intrapreneur

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Entrepreneurs who apply their creativity, vision, and risk-taking within a large corporation rather than starting a company of their own.

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Planning (Management functions)

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First step of managing. Set objective, state mission, examine alternatives, resources, strategize.

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Organizing (Management functions)

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Design jobs, specify tasks, structure, staff positions.

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Leading (Management functions)

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Lead to motivate, communicate with employees, resource conflicts.

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Controlling (Management functions)

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Measure performance, compare, improve.

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Technical skills

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Management skill: areas of knowledge and expertise, as well as the ability to apply it.

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Human Relations skills

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Management skill: interpersonal skills used to accomplish goals.

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Conceptual Skills

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Management skill: view organization as a whole, understand how parts are interdependent relates to external environment.

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Autocratic Leadership

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Leader exerts high levels of power over his or her employees or team members. People within the team are given few opportunities for making suggestions, even if these would be in the team's or organization’s interest.

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Bureaucratic Leadership

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Leaders work “by the book”, ensuring that their staff follow procedures exactly. This is a very appropriate style for work involving serious safety risks (such as working with machinery, with toxic substances or at heights) or where large sums of money are involved (such as cash-handling).

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Democratic/Parcipitative Leadership

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Although a democratic leader will make the final decision, he or she invites other members of the team to contribute to the decision-making process. This not only increases job satisfaction by involving employees or team members in what’s going on, but it also helps to develop people’s skills. Employees and team members feel in control of their own destiny, and so are motivated to work hard by more than just a financial reward.

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Laissez-Faire Leadership

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This French phrase means “leave it be” and is used to describe a leader who leaves his or her colleagues to get on with their work. It can be effective if the leader monitors what is being achieved and communicates this back to his or her team regularly. Most often works for teams in which the individuals are very experienced and skilled self-starters. Unfortunately, it can also refer to situations where managers are not exerting sufficient control.

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Line Structure

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this is the kind of structure that has a very specific line of command. The approvals and orders in this kind of structure come from top to bottom in a line. This kind of structure is suitable for smaller organizations like small accounting firms and law offices. This is the sort of structure that allows for easy decision making, and also very informal in nature. They have fewer departments, which makes the entire organization a very decentralized one.

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Line and Staff Structure

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more centralized. Managers of line and staff have authority over their subordinates, but staff managers have no authority over line managers and their subordinates. The decision making process becomes slower in this type of organizational structure because of the layers and guidelines that are typical to it, and lets not forget the formality involved.

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Functional Structure

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this kind of organizational structure classifies people according to the function they perform in their professional life or according to the functions performed by them in the organization. The organization chart for a functional based organization consists of Vice President, Sales department, Customer Service Department, Engineering or production department, Accounting department and Administrative department.

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Informal Organization

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The interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common organizational affiliation or cluster of affiliations. It consists of a dynamic set of personal relationships, social networks, communities of common interest, and emotional sources of motivation. The informal organization evolves organically and spontaneously in response to changes in the work environment, the flux of people through its porous boundaries, and the complex social dynamics of its members.

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How does informal organization impact the organization?

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complements the more explicit structures, plans, and processes of the formal organization: it can accelerate and enhance responses to unanticipated events, foster innovation, enable people to solve problems that require collaboration across boundaries, and create footpaths showing where the formal organization may someday need to pave a way.

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Task force

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a temporary team assembled to investigate a specific issue or problem.

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Problem solving team

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a temporary team assembled to solve a specific problem.

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Product design team

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a temporary team assembled to design a new product or service.

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Committee

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a temporary or permanent group of people assembled to act upon some matter.

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Work Group

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a permanent group of workers who receive direction from a designated leader.

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Work Team

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an ongoing group of workers who share a common mission who collectively manage their own affairs within predetermined boundaries.

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Quality Circle

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a group of workers from the same functional area who meet regularly to uncover and solve work-related problems and seek work improvement opportunities.

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Product (Marketing Mix)

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A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are often service based like the tourism industry & the hotel industry or codes-based products like cellphone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system.

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Price (Marketing Mix)

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The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.

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Place (Marketing Mix)

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Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.

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Promotion (Marketing Mix)

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represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet adverts through print media and billboards. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations