Business Essentials- Chapter 2

Front 1

External Environment

Back 1

everything outside an organization's boundaries that might affect it

Front 2

organizational boundary

Back 2

that which seperates the organization from its environment

Front 3

economic Environment

Back 3

conditions of the economic system in which an organization operates

Front 4

aggregate output

Back 4

total quantity of goods and services produced by an economic system during a given period

Front 5

standard of living

Back 5

Total quantity and quality of goods and services that a country's citizens can purchase with the currency used in their economic system

Front 6

business cycle

Back 6

pattern of short term ups and downs ( expansions and contractions) in an economy

Front 7

Gross Domestic Product (GDP)

Back 7

Total value of all goods and services produced within a given period by a national economy through domestic factors of production

Front 8

Gross National Product (GNP)

Back 8

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

Front 9

GDP per Capita

Back 9

Gross domestic product per person

Front 10

real GDP

Back 10

GDP calulated to account for changes in currency values and price changes

Front 11

nominal GDP

Back 11

GDP measured in current dollars or with all components valued at current prices

Front 12

purchasing power parity

Back 12

principle that exchange rates are set so that the prices of similar products in different countries are about the same.

Front 13

productivity

Back 13

measure of economic growth that compares how much a system produces with the resources needed to produce it

Front 14

balance of trade

Back 14

the total of a country's exports minus its imports

Front 15

National debt

Back 15

the total amount of money that a country owes its creditors

Front 16

Budget deficits

Back 16

the result of the government spending more in one year than it takes in during that year

Front 17

stability

Back 17

condition in an economic system in which the amount of money available and the quantity of goods and services produced are growing at about the same rate.

Front 18

inflation

Back 18

occurrence of widespread price increases throughout an economic system

Front 19

Consumer price index (CPI)

Back 19

measure of the prices of typical products purchased by consumers living in urban areas

Front 20

deflation

Back 20

a period of generally falling prices

Front 21

unemployment

Back 21

the level of joblessness among people actively seeking work in an economic system.

Front 22

Fiscal Policies

Back 22

policies whereby governments collect and spend revenue

Front 23

Monetary policies

Back 23

policies whereby the government controls the size of the nation's money supply.

Front 24

Technology

Back 24

all the ways firms create value for their constituents

Front 25

research and development (R&D)

Back 25

those activities that are necessary to provide new products, services , and processes

Front 26

Basic ( pure) RD

Back 26

improving knowledge in an area without a primary focus on whether any discoveries that might occur are immediately marketable

Front 27

applied RD

Back 27

focusing primarily on how a technological innovation can be put to use in the making of a product or service that can be sold in the marketplace

Front 28

RD intensity

Back 28

RD spending as a percentage of a company's sales revenue

Front 29

Technology transfer

Back 29

the process of getting a new technology out of the lab and into the marketplace

Front 30

Socio- Cultural environment

Back 30

conditions including the customs , values , attitudes, and demographic characteristics of the society in which an organization functions

Front 31

What are Michael Porter's five forces model?

Back 31

-Rivalry among existing competitors
-threat of potential entrants
-suppliers
-buyers
-substitutes

Front 32

core competencies

Back 32

skills and resources with which an organization competes best and creates the most value for owners

Front 33

outsourcing

Back 33

strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials or services

Front 34

viral marketing

Back 34

strategy of using the internet and word of mouth marketing to spread product information

Front 35

process

Back 35

any activity that adds value to some input transforming it into an output for a customer

Front 36

business process managment

Back 36

approach by which firms move away from department oriented organization and toward process oriented team structures that cut across old deparmental boundries

Front 37

acquisition

Back 37

the purchase of a company by another larger firm, which absorbs the smaller company into its operations

Front 38

merger

Back 38

the union of two companies to form a single new business

Front 39

horizontal merger

Back 39

a merger of two firms that have previously been direct competitors in the same industry

Front 40

vertical merger

Back 40

a merger of two firms that have previously had a buyer -seller relationship.

Front 41

conglomerate merger

Back 41

a merger of two firms in completely unrelated businesses

Front 42

friendly takeover

Back 42

an acquisition in which the management of the aquired company welcomes the firm's buyout by another company.

Front 43

hostile takeover

Back 43

an acquisition in which the managment of the acquired company fights the firm's buyout by another company

Front 44

poison pill

Back 44

a defence that mangment adopts to make a firm less attractive to an actual or potential hostile suiter in a takeover attempt

Front 45

divestiture

Back 45

occures when a company sells part of its existing operations to another company.

Front 46

spinoff

Back 46

strategy of setting up one or more corporate units as new independent corporations.

Front 47

employee stock ownership plans

Back 47

an arrangment whereby a corporation buys its own stock with loaned funds and holds it in trust for its employees. employees " earn" the stock based on some condition such as seniority. employees control the stock's voting rights immediately, even though they may not take physical possesion of the stock until specified conditiond are met

Front 48

strategic alliance

Back 48

an enterprise in which two or more persons or companies temporarily join forces to undertake a particular project.

Front 49

subsidiary corporation

Back 49

one that is owned by another corporation

Front 50

parent corporation

Back 50

a corporation that owns a subsidiary