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58 Cards in this Set
- Front
- Back
Business Organization
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an establishment formed to carry on commercial enterprise (sole proprietorship is the most common form of Business organization)
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Sole Proprietorship/Advantages
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A business owned and managed by a single individual
-Easy to startup -little legal paperwork/regulations -full control of business(easy to make decisions) -sole receiver of profit -easy to discontinue -pay regular taxes |
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Sole proprietorships/Disadvantages
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-unlimited liability
-limited access to capital -lack of dedicated employees (fringe benefits) |
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Business license
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authorization to start a business issued by the gov.
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Zoning law
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law in a city or town that designates separate areas for residency and for business
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fringe benefits
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payment other than wages or salaries (paid vacation, retirement, health insurance)
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general partnership
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(most common type of partnership)
-share equal responsibility and liability (doctors,lawyers,accountants,small businesses, farms etc) |
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limited partnership
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only one parter is the general partner and has "unlimited liability", the others are limited partners who contribute money alone and can only loose their original investment
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limited liability partnership (LLP)
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partnership in which all partners are limited partners
-function similarly to general partnerships (attorneys,physicians,dentists,accountants) |
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advantages of partnerships
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-Ease of startup/lack of paperwork
-shared decision making/specialization -larger pool of capital -pay regular income taxes (only on income, not on the business) |
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disadvantages of partnerships
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-except for LLP's, unlimited liability
-decision making conflicts |
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uniform partnership act (upa)
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if partners do not establish their own acts of partnership they fall under control of the UPA
-requires common ownership interests, profit and loss sharing, and shared management responsibilities |
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articles of partnership
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a legal partnership agreement which spells out each members rights and responsibilities.
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assets
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money and other valuables belonging to an individual or business
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corporation
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legal entity owned by individual stockholders
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stock
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certificate of ownership in a corporation
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closely held corporation
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corporation that issues stock to only a few people, often family members
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publicly help corporations
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corporations that sells stock on the open market
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advantages of corporations
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-limited liability for owners
-transferable ownership -large pool of capital -long life |
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disadvantages of corporations
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-expense and difficulty of start up
-double taxation (tax on income and dividends) -potential lose of control by founders -many legal requirements/regulations(must file annual reports of transactions to SEC) |
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bond
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a formal contract to repay borrowed money with interest at fixed intervals
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certificate of incorporation
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license to form a corporation issued by state government
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dividend
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the portion of corporate profits paid out to stockholders
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horizontal merger
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the combination of two or more firms competing in the same market with the same good or service. usually with the purpose of increasing efficiency and gaining economies of scale
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vertical mergers
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the combination of two or more firms involved in different stages of producing the same good or service. usually with the purpose of eliminating outside suppliers and improving efficiency
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Conglomerates
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business combination merging more than three businesses that make unrelated products
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Multinational corporations
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large corporation that produces and sells goods/services throughout the world
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Business Franchise
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a semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area (wendy's, McDonalds)
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royalty
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share of earnings given as payment (to franchise owners)
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Advantages of Business Franchises
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-standardized quality
-national advertising programs -financial assistance (some franchises provide financing to help owners start their business -centralized buying power(franchises buy supplies in bulk and then sell them to each of their stores, passing on the savings) |
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Disadvantages of business franchises
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-high franchising fees to wear the company name/must pay royalties
-strict operating standards -purchasing restrictions (must buy supplies from wherever the franchise owners do) -only allowed to sell approved products |
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cooperative
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a business organization owned by a group of individuals for their shared benefit
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consumer cooperative
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retail outlet owned by consumers. By making large purchases consumer coop's can obtain goods at a lower price
-require consumers to either have a membership or work a certain amount of hours (discount clubs,small health stores etc.) |
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service cooperative
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coop's that provide a service rather than a good
-may offer discounted insurance,banking services, baby sitting |
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producer cooperatives
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agriculture marketing coop that helps members focus on farming while the coop sell their goods for the highest price
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labor force
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all nonmilitary people who are employed or unemployed
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unEmployed
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must have work lined up for the future or must be looking for work
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learning effect
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the theory that education increases productivity and results in higher wages
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screening effect
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the theory that the completion of college indicates to employers that a job applicant is intelligent and hard-working
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contingent employment
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a temporary or part-time job
-flexible adjustments to work force to meet reduced demand -easy to fire employees -may be paid less/given less benefits |
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derived demand
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demand that is determined by demand for another service or good (demand for cooks correlates to demand for restaurant meals)
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productivity
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value of output
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higher wages
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higher demand for labor will increase wages close to the value of output / higher wages increases the supply of labor
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equilibrium wage
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the wage rate that produces neither an excess supply of workers nor an excess demand for workers in the labor market
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unskilled labor
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labor that requires no specialized skills, education, or training (dish washer)
-hourly wage |
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semi-skilled labor
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labor that requires minimal specialized skills and training (lifeguards,word processors)
-hourly wage |
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skilled labor
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labor that requires specialized skills and training to do tasks such as operating complicated equipment (mechanics, bank tellers, plumbers, firefighters)
-hourly wage |
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professional labor
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labor that requires advanced skills and education
usually white collar workers who receive a salary (managers, teachers, doctors, bankers, actors) |
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equal pay act of 1963
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males and females with the same jobs at the same workplace receive the same pay
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title 7 of the civil rights act
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prohibits job discrimination on the bases of sex, religion, nationality/ethnicity
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glass ceiling
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an unofficial invisible barrier that prevents women and minorities from advancing in businesses dominated by white males
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featherbedding
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practice of negotiating labor contracts that keep unnecessary workers on a company's payroll
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right to work laws
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a measure that bans mandatory union membership
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blue-collar worker
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someone who works in an industrial job, often manufacturing, who receives wages
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white-collar workers
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someone in a professional or clerical job who usually earns a salary
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collective bargaining
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the process in which union and company representatives meet to negotiate a new labor contract. labor contracts usually want to reach these goals- higher wages/benefits, working conditions,job security
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mediation
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a settlement technique in which a neutral mediator meets with each side to try to find a solution that both sides will except(non binding- neither side has to abide)
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arbitration
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a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides
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