BUS 110 SIDI MY
The economic impact of scarcity scarcity
- a condition of any productive resource that has finite supply - impact of scarcity meaning that a given resource has a finite supply is fundamental to understanding economics factors of production supply of resources is limited just so many entrepreneurs in economy
12. Which of the following BEST describes the concept of business?
- a profit-seeking organization that provides goods and services an outline of how to generate revenue the amount of money left over after expenses the money a company generates through the sale of goods and services all companies trying to sell products to the same customer base
The relationship between business and society
- business and society need each other - and each needs the other to be healthy and successful
What is ethical behavior?
- competing fairly and honestly - communicating truthfully - being transparent - not causing harm to others (insider trading)
3 essential components of good business ethics
- competing fairly and honestly - communicating truthfully - not causing harm to others
Being dependable and accountable
- develop a reputation as somebody people can count on - meet commitments, stay on schedule, stay w/in budgets - will develop as gain experience w/experience learn conservative w/commitments not be someone who overpromises/underdelivers
Macro: Business Cycles
- economic expansion - economic contraction includes: * recession - decline of the GDP for 2 or more quarters * depression - deep and prolonged decline
free-market system capitalism and private enterprise most often used describe free-market system
- economic system in which decisions about what to produce and in what quantities are decided by the market's buyers and sellers - chance to succeed or fail by own efforts - individuals and companies largely free to decide what products to produce, how to produce them, whom to sell them to, and at what price to sell them
products
2 primary questions 1. which products sell in each mkt? 2. standardize products - selling same product everywhere? or customize to accomodate lifestyles/habits of local target mkts? customization increases costs/operational complexity i.e H & M follows standardized strategy product lines degree of customization - product name, pkging, modify components, size, functions need to understand country's regulations, culture, local competition essential in making smart product design/branding decisions
International Business Law
2 serious issues - tax havens and bribery highlight challenges/complexities
Ethics in Contemporary Business 3 Factors Influence Ethical Decision Making
3 major influences on ethical decision * culture * knowledge * organizational behavior
41.The Civil Rights Act of 1964 established which regulatory agency to address job discrimination? A. ADA B. OSHA C. Supreme Court of the United States D. Fair Labor Association E. EEOC
EEOC
Which of the following views of corporate social responsibility states that the only responsibility companies have is to be ethical in their activities for increasing profits? A.Defensive CSR B.Minimalist CSR C.Proactive CSR D.Cynical CSR E.Ethical CSR
Minimalist CSR
Perspectives on Corporate Social Responsibility
Minimalist CSR - companies do not have social responsibilities beyond earning money and obeying the law (economist view) Cynical CSR - companies use CSR as a marketing ploy to distract Defensive CSR - companies engage in CSR only after being shamed or forced into it Proactive CSR - company leaders believe they have responsibilities beyond making a profit and they back up those beliefs Resolving the CSR dilemma
stakeholders
all those groups affected by its activities, from employees to local communities to advocacy groups - a subject of ongoing controversy
Push for Equality in Employment
although US stood for economic freedom & ind. right pursue opportunity many in past targets of economic discrimination
purchasing power
amount of a good or service you can buy for a given amount of money prices go up - purchasing power goes down
deflation
an economic condition in which prices fall steadily throughout the economy sustained fall in average prices
inflation
an economic condition in which prices rise steadily throughout the economy - increase gradually steady rise in the average prices of goods and services throughout the economy * major concern for consumers, businesses, govt leaders b/c effect on purchasing power
World Economic Forum (WEF)
an independent nonprofit foundation that annually brings together political, financial, and corporate leaders to promote networking among them and to address an array of global issues 10 Most Competitive Economies in the World based on ability to sustain economic growth 1. Switzerland 2. Singapore 3. United States 4. Finland 5. Germany 6. Japan 7. Hong Kong 8. Netherlands 9. United Kingdom 10. Sweden
Ch. 1 Developing a Business Mindset business (firm, enterprise)
any profit-seeking organization that provides goods and services designed to satisfy customers' needs.
assets one of driving force behind most business prospect of earning profits and building assets
anything of meaningful value, from patents and brand names to real estate and company stock
stereotyping
assigning a wide range of generalized attributes, which are often superficial or even false, to an individual based on his or her membership in a particular culture or social group
CSR: Employees
attitudes past few decades brought dramatic change global workplace & attitudes of workers forcing businesses modify recruiting, training, promotion practices, overall corporate values/behaviors
transnational strategy
a hybrid approach that attempts to reap the benefits of international scale while being responsive to local mkt dynamics - essence of often-heard advice "think globally, act locally" - major strategic decisions/business systems i.e. accounting, purchasing often centralized, local business units given freedom to make "on-the-ground" decisions most appropriate for local mkts.
45.Last year, ABC and NBC came together to create a new company called XYZ, which is legally separate and distinct from both ABC and NBC. XYZ is an example of _____. A. international franchising B. importing C. exporting D. a joint venture Your answer is correct. E. licensing
a joint venture
embargo
a total/complete ban on trade with a particular nation (a sanction) or of a particular product even all trade between certain countries
cap and trade programs
a type of governmental policy that gives companies some freedom in addressing the environmental impact of specified pollutants, by either reducing emissions to meet a designated cap or buying allowances to offset excess emissions try to balance free-market economics w/govt intervention lawmakers est. max allowable amt pollutant then designated group companies/industries allowed to emit ("cap") then distribute ind. emission allowances too all companies in that group if company lowers emission under limit can sell,trade, or save leftover allowances (the "trade") if company exceeds emission allowances, must buy/trade to cover excess emissions companies use lowest-cost means take responsibility 1990s - cap-and-trade program to reduce sulfur dioxide emissions from coal-burning power plans (lead cause acid rain) reduced emissions by 50%
code of ethics
a written statement that sets forth the principles that guide an organization's decisions
restrictive import standards
countries can assist their domestic producers by establishing restrictive import standards i.e. special licenses doing certain kinds business/then make difficult/expensive for foreign companies obtain license
depression
deep and prolonged recession - generally considered to involve a catastrophic collapse of financial markets
_ refers to the number of products or services that consumers will purchase at varying cost at a given time.
demand
The global business environment
encompasses the international forces that affect a business and includes international trade agreements, international economic conditions, and political unrest. * Cultural differences - successful global business leadrs need to recognize and respect differences - must avoid stereotyping and ethnocentrism * Legal differences - common law vs. civil law vs. theocratic law - tax havens and briberty - The Foreign Corrupt Practices Act (FCPA)
CH. 2 Understanding Basic Economics What is economics?
economics is the study of how society uses its scarce resources to produce and distribute goods and services
knowledge workers
employees whose primary contribution is the acquisition and application of business knowledge are a key economic resource for businesses in today's economy.
7 Most Important Business Professions: Operations Manager
encompasses all the people and processes used to create the goods/perform services company sells. ex: production engineering, assembly, testing, scheduling, quality assurance, information technology, forecasting, finance, logistics, customer support many begin careers in technical positions such as industrial engineering stressful - organization deals w/fluctuating demands w/process and supply problems
34. An economic system centered on financial liberty and competition is known as ___________. A. nationalism B. socialism C. capitalism Your answer is correct. D. communism E. a planned system
capitalism
dumping
charging less than the actual cost or less than the home-country price for goods sold in other countries
1. Company LMT competes with other companies in the industry by offering the lowest prices around. By offering products at the lowest possible cost compared with other companies, Company LMT has a(n) ____________. A. employee advantage B. business mindset C. economic subsidy D. competitive advantage Your answer is correct. E. not-for profit mindset
competitive advantage
Businesses compete to satisfy customer competitive advantage
competitive advantage
importing/exporting help
federal trade offices - help importers/exporters in doing business w/in their borders - professional agents, local business people, International Trade Administration of the US Dept. of Commerce offer services - political, credit-risk analysis, advice on entering foreign markets, financing tips
Organizational Strategies for International Expansion
firm in another country, need to consider long-term objectives, nature of its products, characteristics of the markets plan to expand into, management team's ability to oversee geographically dispersed operation
business cycles
fluctuations - up/down swings in the rate of growth that an economy experiences over a period of several years **misleading b/c real economies don't expand and contract in regular and predictable "cycles"
technological environment
forces resulting from the practical application of science to innovations, products, and processes -stems from the practical application of science to innovations, products, and processes.
33. The quantity (or sum) of units of a currency that must be swapped for a unit of another currency is known as what? A. Foreign exchange Your answer is not correct. B. Balance of payments C. Trade deficit D. Floating exchange rate system E. Exchange rate
foreign exchange
Economic systems
free market = capitalism and private enterprise planned systems - communism - North Korea and China socialism - Denmark, Germany
When worldwide trade takes place without obstructive measures, it is called _____.
free trade
Human Resources (HR)
function is responsible for recruiting, hiring, developing and supporting employees like finance/accounting - HR supports all other functional areas in the enterprise other managers other areas closely involved w/hiring/training HR oversees processes/supports other depts. as needed charged w/ making sure company in compliance w/laws concerning employee rights/workplace safety
Finance and Accounting
functions to ensure company has funds needed to operate, monitor, control how funds spent draft reports for company management, investors, government regulators * financial managers - responsible for planning * accounting managers - responsible for monitoring and reporting accountants coordinate w/ R&D and production departments to estimate the manufacturing costs of new product then work w/marketing set product price level allows company competitive and meet financial goals
protectionism
government policies aimed at shielding a country's industries from foreign competition can actually end up hurting groups intended to help - seek to protect specific industry or groups of workers
Stabilizing & Stimulating the Economy
govt 2 sets tools use to stabilize/stimulate national economy: monetary policy and fiscal policy
export subsidies
govt intervene to help domestic industries export products a form of financial assistance in which producers receive enough money from the government to allow them to lower their prices in order to compete more effectively in the global market
encouraging innovation and economic development
govts use regulatory/policymaking powers to encourage specific types of economic activity ex: govts consider beneficial i.e. promoting growth of alternative energy sources through economic incentives for producers and customers or locate/expand geographic areas by est. economic development zones - typically offer variety financial incentives = tax credits, low-interest loans, reduced utility rates to businesses that meet specific job-creation/local investment criteria
32. Which of the following represents the worth of all the final goods and services created by firms positioned within a country's boundaries, excluding outputs from foreign operations of home-country companies? A. Net exports B. Gross domestic product Your answer is correct. C. Producer price index D. National output E. Consumer price index
gross domestic product
Which of the following represents the worth of all the final goods and services created by firms positioned within a country's boundaries, excluding outputs from foreign operations of home-country companies? A.Producer price index B.Consumer price index C.Net exports D.Gross domestic product E.National output
gross domestic product
The World Bank
group of five financial institutions primary goals eradicating most extreme levels poverty around world/raising income poorest people to foster shared prosperity NOT directly involved in international trade and finance same scale as WTO & IMF does contribute to trade indirectly improve ecconomic conditions investing education, health care, etc. developing countries
not-for-profit organizations (nonprofit organizations)
in contrast are museums, most universities, charities NO profit motive - **but must also operate efficiently and effectively to achieve their goals, successful nonprofits apply many business-management principles organizations that provide goods and services without having a profit motive; also called nonprofit organizations
economic globalization
increasing integration and interdependence of national economies around the world
housing starts
leading indicator showing where several industries headed housing starts to drop, construction industry contracts - effect ripples through other sectors of economy - plumbing fixtures manufacturing, carpet, appliances to services - furniture retailing, real estate sales, etc. dependent on housing-related transactions
39.Jason is from Canada and Conchita is from Spain. Which of the following will MOST help the communication process between these two people from different cultures? A. Deal with the stereotype, not with Jason and Conchita as individuals. B. Practice ethnocentrism. C. Use a style that is stereotypical to the native culture. D. Be ambiguous and leave room for interpretation. E. Learn how to show respect in each other's cultures.
learn how to show respect in each other's cultures
46.The policies and practices of government bodies are part of which type of business environment? A. Legal and regulatory environment Your answer is correct. B. Technological environment C. Economic environment D. Social environment E. Market environment
legal and regulatory environment
Information Technology Manager
like IT evolving from tactical support into critical strategic component - reflecting ITs strategic importance, many midsize/large companies now have Chief Information Officer (CIO) as executive to plot It strategy - IT specialists design, implement, maintain systems to deliver right info at right time to right people in organization - usually require degree in technical field with understanding of business processes, finance, management IT managers have business degree not all companies require one
import quotas
limits placed on the quantity of imports a nation will allow for a specific product - limit amount of particular goods countries allow to be imported during given year
Nationalization and Privatization
line between socialism and capitalism not easily defined some countries use both ex: private companies own or operate highways, bridges, ports, prisons, other infrastructure elements in the US providing services once provided by govt. primary reason is belief private firms motivated by profit incentive can do more efficient job of running facilities
Marketing, Sales, Distribution, Customer Support
lines often blurry between all - changed dramatically by technological advances especially. by social media social media enabled customers participate in unstructured conversation w/ companies & w/ one another not passive recipients of broadcast advertising result power shift puts buyers more equal footing w/sellers * marketing - charged w/ identifying opportunities in marketplace, working w/ R&D to develop the products to address those opportunities - create branding/advertising strategies to communicate w/potential customers, set prices * sales - develops relationships w/potential customers - persuades customers transaction by transaction to buy company goods/services * distribution - can be involved before sale (help promote products to retailers) and after sale (physically deliver products) * customer support - after product in buyer's hands - makes sure customers have support/information needed
strategic alliances
long-term partnerships between two or more companies to jointly develop, produce or sell products = another way to reach global marketplace typically share ideas, expertise, resources, technologies, investment costs, risks, management, profits sometimes may be only way to gain access to market
lagging indicators
provide confirmation that something has occurred in the past key lagging indicators - corporate profits & unemployment i.e companies reudce workforces after economy slowed, sales revenues dropped don't have the predictive power of leading indicators, lagging indicators give policymakers insights into economy functioning & if corrective steps necessary
Which of the following guidelines is used to improve effectiveness as a communicator? A.Present opinions as facts. B.Persuasive listening techniques. C.Provide practical information. D.Provide varying expectations and responsibilities. E.Give ambiguous impressions.
provide practical information
25. Which of the following is an example of a not-for-profit organization? A. Insurance company B. Restaurant C. Private electric company D. Public museum Your answer is correct. E. Department store
public museum
38.Which term describes the political procedures and actions put into place in order to control the country's currency source? A. Privatizing B. Nationalizing C. Fiscal policy D. Equilibrium point E. Monetary policy
monetary policy
Which term describes the political procedures and actions put into place in order to control the country's currency source?
monetary policy
revenue
money a company brings in through the sale of goods and services
capital
money, machines, tools, buildings that a business needs in order to produce goods and services the funds that finance the operations of a business as well as the physical, human-made elements used to produce goods and services, such as factories and computers
4. ______ involves a condition in which a sole company controls a particular market to the extent that it has the ability to control prices. A. Nationalizing B. Oligopoly C. Privatizing D. Pure competition E. Monopoly
monopoly
7. _______Involves a condition in which a sole company controls a particular market to the extent that it has the ability to control prices.
monopoly
______ involves a condition in which a sole company controls a particular market to the extent that it has the ability to control prices. A.Privatizing B.Pure competition C.Oligopoly D. Monopoly E. Nationalizing
monopoly
Businesses accept risks in the pursuit of rewards
moral hazard
A condition in which a certain number of consumers and vendors exist to ensure that no sole consumer or vendor can independently impact market rates is known as _______. A.pure competition B.monopolistic competition C.consumer price index D.gross domestic product E.monopoly
pure competition
17. Practicing good business ethics involves all of the following EXCEPT ________. A. putting personal interests above those of other stakeholders Your answer is correct. B. not causing harm to others C. being transparent D. competing fairly and honestly E. communicating truthfully
putting person interests above those of other stakeholders
professionalism
quality of performing at a high level and conducting yourself with purpose and pride 7 key traits: striving to excel being dependable and accountable being a team player communicatig effectively demonstrating a sense of etiquette making ethical decisions maintaining a positive outlook
50. The government of Zenovia limits the quantity of wine bottles that can be imported during a given year. This is an example of _______. A. restrictive import standards B. export subsidies C. sanctions D. embargoes E. quotas
quotas
13. ____________ occurs when salary, employment, and manufacturing decline over at least a 6-month period of time. A. Recession Your answer is correct. B. Scarcity C. Inflation D. Deregulation E. Deflation
recession
supply
refers to the quantities of a good or service that a producer will provide on a particular date at various prices
Which term describes a resource that has limited quantity?A.Equilibrium point B.Producer price index C.Demand curve D. Scarcity E.Opportunity cost
scarcity
Forces of Supply and Demand - dynamic order on free-market system
seller - anticipated financial gains free-market system - marketplace(individuals, firms, industries) forces demand/supply determine quantity of goods and services produced/prices sold
labor intensive
service businesses - they rely more on human resources than on buildings, machinery, and equipment to prosper. exceptions: airlines - massive investment in equipment Internet/other technologies have reduced labor required to operate many types of service businesses.
pure competition
situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices no single firm becomes large enough to influence prices and distort workings of free-market system
conflicts of interest
situations in which competing loyalties can lead to ethical lapses, such as when a business decision may be influenced by the potential for personal gain
47.Which term describes a long-term partnership between Company A and Company B to jointly develop, produce, or sell products? A. Licensing B. Exporting C. Joint venture D. Strategic alliance Your answer is correct. E. Importing
strategic alliance
economic fluctuations
more accurate way to characterize economy's real behavior
knowledge
more you know, better understand situation, allowing better chance make ethical decision have responsibility pay attention, actively seek out information regarding potential ethical issues
floating exchange rate system
most international currency operate under a currency's value or price fluctuates in response to the forces of global supply and demand supply/demand of country's currency determined part by what's happening in country's own economy - supply/demand always changing rate exchanged for other curriences may change daily
monopolistic competition
most of the competition in advanced free-market economies - a situation in which many sellers differentiate their products from those of competitors in at least some small way - risk/reward nature of capitalism promotes constant innovation in pursuit of competitive advantage, rewarding companies that do best job satisfying customers
unemployment
most serious effects of economic contraction affects overall economy terms lost output increase financial burden on state govt collect unemployment benefits
10. ___________________ attempt to operate efficiently and effectively to accomplish their goals but are not motivated by profits. A. Green businesses B. For-profit organizations C. Service businesses D. Not-for-profit organizations Your answer is correct. E. Goods-producing businesses
not-for-profit organizations
oligopoly
number of competitors in market quite small customers have some choice, unlike monopoly but not as many choices as in monopolistic competition - market situation in which a small number of suppliers, sometimes only two, provide a particular good or service
economic expansion
occurs when economy is growing and consumers are spending more money, stimulating higher employment/wages then stimulates more consumer purchases
economic contraction
occurs when such spending declines, employment drops, economy as whole slows down
2. Business contributes to society in many valuable ways, such as ________________. A. organizing and managing governments B. guaranteed financial stability C. creating safety risks to reap higher rewards D. paying taxes Your answer is correct. E. ensuring political stability
paying taxes
9. Business contributes to society in many valuable ways, such as _________
paying taxes
Business contributes to society in many valuable ways, such as _________
paying taxes
human resources
people and their individual talents and capacities all the people who work in an organization on its behalf - all the people who work in an organization or on its behalf
social entrepreneurs
people who apply entrepreneurial strategies to enable large-scale social change, use business concepts as well
Professionalism true professions exhibit 7 distinct traits
performs at higher plane - make meaningful contribution viewed as true professional * the quality of performing at a high level and conducting oneself w/purpose and pride **qualify of performing at a high level - conducting oneself w/purpose and pride ** 7 distinct traits: 1. striving to excel 2. being dependable and accountable 3. being a team player 4. communicating effectively 5. demonstrating a sense of etiquette 6. making ethical decisions 7. maintaining a positive outlook
mixed economy or mixed capitalism
practice of limited intervention is characteristic economic system of United States and most other countries government intervenes in US economy influencing particular allocations of resources = tax incentives, prohibiting or restricting the sale of certain goods/services or setting price controls
Making ethical decisions
true professionals conduct themselves clear sense right and wrong avoid committing ethical lapses weigh options confronted w/ethical dilemmas
privatizing
turning over services once performed by the government to private businesses govts various countries done both i.e. private companies own or operate highways, bridges, ports, prisons, other infrastructure elements in U.S.
joint venture
two or more firms join together to create a new business entity that is legally separate and distinct from its parents, an alternative to a strategic alliance some countries, foreign companies prohibited from owning facilities outright or from investing in local business so est. joint venture w/local partner may be only way to do business in that country.
7. What is the result of an incongruity between workers' skills and current employer needs? A. Deflation B. Competition C. Cyclical unemployment D. Frictional unemployment E. Structural unemployment
structural unemployment
Ch. 4 Business Ethics and Corporate Social Responsibility
struggle to find ethical clarity and how choices/option affect company's stakeholders problems w/American business today it's succeeded assuming many appearances/privilegs of professional while evading attendant constraints/responsibilities
economics
study of how a society uses its scarce resources to produce and distribute goods and services - roughly divided into a small-scale perspective and large-scale perspective * study of economic behavior among consumers, businesses, and industries that collectively determine the quantity of goods and services demanded and supplied at different prices * understanding the economy at either micro or macro scale requires understanding of how small/large forces interact ex: macro forces and policies determine whether homeowners afford install solar energy systems aggregate behavior of homeowners at micro level affects vitality/direction of overall economy
leading indicators
suggest changes that may happen to the economy in future, therefore valuable for planning
legal and regulatory environment
sum of laws and regulations at local, state, national and even international levels some such as basic utilities (electricity) heavily regulated even determining how much to charge for services - degree of regulation point of contention due to taxes, fees, efforts to coordinate regulatory agencies, speed grant permits/licenses/labor rules/environmental restrictions, protection for assets patents/brand names roads/other infrastructure transparency/consistency of decisions affect level of support = companies prefer locate/do business w/in jurisdictions offer lower costs, lower complexity, greater stability/predictability
27. Which of the following represents a chart of the amount of a product that merchants will present for purchase at varying costs, regardless of consumer want? A. Demand curve B. Producer price index C. Gross domestic product D. Supply curve Your answer is correct. E. Business cycle
supply curve
8. Which of the following represents a chart of the amount of a product that merchants will present for purchase at varying costs, regardless of consumer want?
supply curve
Which of the following represents a chart of the amount of a product that merchants will present for purchase at varying costs, regardless of consumer want? A.Gross domestic product B.Supply curve C.Producer price index D.Business cycle E.Demand curve
supply curve
11. __________ supports current stakeholders as well as future stakeholders. A. Greenwashing B. Cap and trade C. Sustainable development Your answer is correct. D. Repurposing E. CSR
sustainable development
2. ______supports current stakeholders as well as future stakeholders.
sustainable development
Which of the following describes a situation in which a company carries out everyday business utilizing methods to reduce pollutants and resource depletion in order to guarantee upcoming generations will have availability to critical resources? A.Transparency B.Affirmative action C.Cap and trade D.Sustainable development E.Minimalist CSR
sustainable development
11. Taxes, surcharges, or duties imposed on imported products are called ____________
tariffs
12. Taxes, surcharges, or duties imposed on imported products are called _____________. A. tariffs Your answer is correct. B. export subsidies C. sanctions D. embargoes E. free trade
tariffs
tariffs
taxes levied on imports taxes, surcharges, duties levied against imported goods - can be levied to generate revenue, restric trade or punish other countries for disobeying international laws
ethnocentrism
tendency to judge all other groups according to the standards, behaviors, and customs of one's own group
The forces of demand and supply (microeconomics) demand
the amount of good or service that customers will buy at a given time at various prices demand curve downward left * the curve can shift left or right due to changes in - customer incomes and preferences - prices of substitute and complimentary products - customer expectations about the future
profit
the amount of money left over after expenses - all the costs involved in doing business - have been deducted from revenue money left over after all the costs involved in doing business have been deducted from revenue
knowledge
the collective intelligence of an organization. * expertise gained through experience or association knowledge workers - employees whose primary contribution is the acquisition and application of business knowledge are a key economic resource for businesses in today's economy.
economic environment
the conditions and forces that affect the cost and availability of goods, services, and labor and thereby shape the behavior of buyers and sellers. the conditions that: 1- affect the cost and availability of goods, services and labor 2- thereby shape the behavior of buyers and sellers (growing economy help companies by increasing demand/support higher prices for their products and raise cost of labor/materials companies need to do business negative - strong economy can prompt managers make decisions that turn out unwise long term (adding costly facilities/employee benefits company can't afford when economy slows again) shrinking economy damage well-run, financially healthy companies limited demand for products/availability of loans or investments need to expand operaitons
transparency
the degree to which affected parties can observe relevant aspects of transactions or decisions
whistle-blowing
the disclosure of information by a company insider that exposes illegal or unethical behavior by others within the organization
philanthropy
the donation of money, time, goods, services to charitable, humanitarian, or educational institutions including employee time to various causes w/o regard for direct business benefits for company
exchange rate
the rate of exchange at which the money of one country is traded for the money of another
28. Fundamental consumer rights that form the basis of much of the consumer-related legislation in the United States include all of the following EXCEPT __________. A. the right to buy safe productslong dash—and to buy them safely B. the right to be informed C. the right to sustainable development Your answer is correct. D. the right to be heard E. the right to choose which products to buy
the right to sustainable development
Economic systems - generally free-market or planned system
the roles that individuals, businesses, government play in allocating a society's resources depend on the society's economic system. * the policies that define a society's particular economic structure; the rules by which a society allocates economic resources. * the basic set of rules for allocating resources to satisfy its citizens' needs generally categorized as free-market systems or planned systems - theoretical b/c every economy combines aspects of both approaches all based on certain fundamental principles about how a country should allocate its resources to satisfy the needs of its citizens most today are combo of capitalism and socialism * no economy is truly "free" in sense anyone can do whatever wants to do local, state, national, international governments such as European Union - run from extreme - public/government ownership of productive resources, centralized economic planning and control to private ownership of productive resources; emphasis on free-market economic principles
exporting
the selling of products outside the country in which they are produced selling and shipping goods or services to another country one of the least risky forms of international business activity - allows firm enter foreign market gradually, assess local conditions, then fine-tune its product offerings to meet the needs of local markets most cases firm's financial exposure limited to costs of researching market, advertising - direct sales/distribution system or hiring intermediaries w/ variety exist help companies w/exporting
economy
the sum total of all the economic activity w/in a given region - from a single city to a whole country to the entire world - complex, constantly in motion, subject of heated dispute, at times hard to see - though all around us
insider trading
the use of unpublicized information that an individual gains from the course of his or her job to benefit from fluctuations in the stock market
gross domestic product (GDP)
the value of all the final goods and services produced by businesses located within a nation's borders; excluded outputs from overseas operations of domestic companies measures country's output - its production, distribution, use of goods/services by computing sum of all goods/services produced for final use in country during specified period (usually a year).Products produced either domestic or foreign companies as long as production takes place w/in nation's boundaries. i.e. Honda sales from plant in California computed in U.S. GDP although Honda is Japanese company monitoring GDP helps nation evaluate economic policies & compare performance w/other nations largely replaced previous measure - gross national product (GNP) which excludes value of production from foreign-owned businesses w/in nation's boundaries, includes receipts from overseas operations of domestic companies **GNP considers WHO is responsible for production **GDP considers WHERE the producton occurs
opportunity cost
the value of the most appealing alternative not chosen - economists use opportunity cost to refer to value of the most appealing alternative from all those not chosen - opportunity cost way to measure the value of what you gave up when you pursued different opportunity
natural resources
things that are useful in their natural state i.e. land, forests, minerals, water and other tangible assets usable in their natural state
Factors of production (economic resources) * knowledge * human resources * natural resources * capital
things useful in their natural state: Land, labor, and capital; the three groups of resources that are used to make all goods and services economic resources * transitionally business or country considered have an advantage if its location offered plentiful supplies of natural resources, human resources, capital and entrepreneurs. * today's global marketplace intellectual assets are often the key * companies obtain capital from another part of world, purchase supplies from another, locate production facilities in another - relocate some operations to where steady supply affordable workers, can assemble virtual teams knowledge workers from anywhere
Manufacturing, Production and Operations
this function concerns whatever company makes (for goods-producing businesses) or does (for service businesses) *supervising production activity *responsible for: - purchasing - arranging buy necessary materials for manufacturing -logistics - coordinating the incoming flow of materials and the outgoing flow of finished products -facilities management - everything from planning new buildings to maintaining them
social environment
trends and forces in society at large - population trends that change the composition of consumer markets and the workforce "Baby-Boom" generation 1946-1964 trends/forces in society at large - population trends ex: 'baby boom" generation population "bulge" people born 1946-1964 stakeholders all those groups affected by its activities - employees to local communities to advocacy groups subject of ongoing controversy (corporate social responsibility)
MIE201 TEST 1 A method of understanding what any business does is to view it as a system for meeting customer needs by _______?
transforming lower-value inputs into higher-value outputs.
Which strategy utilizes the concept of "think globally, act locally"?
transnational strategy
____________ describes the extent to which individuals can explore significant portions of business dealings and decisions.
transparency
3 principles for situational etiquette
1. respect 2. courtesy 3. common sense encourage forgiveness if make mistake CultureGrams
Four major areas govt plays role in economy
* protecting stakeholders * fostering competition * encouraging innovation and economic development * stabilizing and stimulating the economy
businesses
* Add value i.e. convering flour into artisan bread
The 5 Environments of Business
* Market Environment * Economic Environment * Technological Environment * Social Environment * Legal and Regulatory Environment
Potential Positive Effects of Business
* Offering valuable goods/services * providing employment * paying taxes * contributing to growth, stability, and security
Major functional areas
* R & D and IT * manufacturing, production, and operations (logistics) * marketing, distribution, and customer support * finance and accounting * human resources * business services
Making the leap from buyer to seller
* The consumer asks "what product will meet my needs?" * The business person asks "what product should we make?
Legal Differences in the Global Business Environment
* US and UK legal systems based on common law - tradition, custom, judicial interpretation play important roles. * France/Germany based on civil law - legal parameter specified detailed legal codes * theocratic law based on religious principles, predominates countries Iran, Pakistan, legal philosophies, contracts, copyrights, etc. vary country to country
Ch. 3 The Global Marketplace Fundamentals of international trade
* Why nations trade - globalization - Comparative advantages between countries - Brazil is good at growing coffee, USA at building airplanes - Expanding new markets - Pursuing economies of scale - acquiring materials, goods and services - keeping up with customers - keeping up with competitors * How international trade is measured - balance of trade - trade surplus or deficit - balance of payments * Foreign exchange rates and currency valuations
Major Functional Areas in a Business Enterprise exhibit 1.7
* accounting * finance * human resources * business services
Tips for Improving Communication With Person From Another Culture
* be alert to the other person's customs w/ values, beliefs, expectations, mannerisms may differ from yours * deal w/ the individual - don't stereotype other or react w/ preconceived ideas - regard as individual first not another culture * clarify your intent and meaning - other person body language might not mean what you think and they'll read unintentional meanings into your message - clarify true intent by repetition/examples - ask questions/listen carefully * adapt your style to other person's - if they appear to be direct/straightforward follow suit adjust behavior to match * show respect - learn how respect is communicated culturally - gestures, eye contact, social customs, other actions
ethical behavior * compete fairly/honestly * communicate truthfully * be transparent * not cause harm to others
* competing fairly and honestly - and not knowingly deceive, intimidate, or misrepresent themselves to customers, competitors, clients, employees, the media, or govt officials * communicating truthfully - tell the truth, the whole truth, and nothing but the truth. do you have an obligation to tell customers that next yr you will offer improved product and they delay their purchase which causes you cash flow problem forcing lay-offs? * being transparent - "the degree to which information flows freely w/in an organization, among managers and employees, and outward to stakeholders" * not causing harm to others - all businesses have capacity cause harm to employees, customers, other companies, their communities, and investors can start if managers make decisions that put personal interests above stakeholders, underestimate risks of failure, neglect to consider potential effecs on other people/organizations i.e. insider trading - company insiders use confidential information to gain advantage in stock market trading, harms other investors, (is illegal and unethical) harm can also result when managers act ethically but still responsible for negative outcomes
scarcity 2 powerful effects - competition for resources and trade-offs
* creates competition for resources * forces trade-offs on the part of every participant in the economy 1 - at every stage of economic activity people/organizations compete for resources need businesses/industries compete w/each other for materials, employees, customers consumers compete w/other consumers 2 - universal scarcity of resources means consumers, companies, governments constantly forced to make trade-offs, having give up one thing to get another business trade-offs - how much money spend advertising new product vs. how much spend on materials used make it or deciding how many employees have in sales vs. in customer support
Socialism
* economic system characteried by public ownership and operation of key industries combined with private ownership and operation of less-vital industries * state ownership of certain productive resources * managed efforts to minimize dramatic differences between economic classes * opportunities for entrepreneurship with varying degrees of restrictions * lies somewhere between capitalism and communism w/ high degree of govt. planning some govt. ownership of capital resources * govt. ownership focused on industries vital to common welfare - transportation, health care, communications * private ownership permitted in other industries sometimes used as pejorative term in today's heated political/economic dialogues - many believe capitalism superior to socialism not universal opinion * economic heavyweights France and Germany incorporate degrees of socialism
CSR: The Natural Environment
* efforts to conserve resources and reduce pollution * the trend toward sustainability
Conflicts in international trade
* free trade - true free trade can result in winners and losers * government intervention - protectionism - tarrifs - import quotas - embargoes - restrictive import standards - export subsidies - anti-dumping measures - sanctions
Potential Negative Effects of Business
* generating pollution and creating waste * creating health and safety risks * disrupting communities * causing financial instability
Monetary policy
* government policy and actions taken by the Federal Reserve Board to regulate the nation's money supply. involves adjusting the nation's money supply (the amount of "spendable" money in economy any given time by increasing or decreasing interest rates In U.S. controlled primarily by Federal Reserve Board "the Fed" group of govt officials oversee country's central banking system
The role of business in society
* offering valuable goods and services vs. generating pollution and waste * providing employment vs. health and safety risks * paying taxes vs. disrupting communities
Exploring careers in business
* operations management * HR specialist * IT manager * marketing specialist * sales professional * accountant * financial manager
Strategic approaches to international markets
* organizational strategies - multi-domestic, global, and trans-national * Functional strategies - products - standardize or customize? - customer support - promotion - pricing - staffing
capitalism economic system
* private ownership of most productive resources * few efforts to minimize differences between economic classes * government policies actively support entepreneurship * free-market capitalism foundation of U.S. economy with some important elements socialized public schools, much transportation infrastructure, various local/regional utilities, several major health-care programs all fit economic definition of socialism socialism and capitalism competing philosophies not mutually exclusive - each w/strengths/weaknesses why modern economies combine aspects of both
Types of Businesses
* produce goods vs. provide services * profit vs. not-for-profit * barriers to entry
Government's role in the free market system: regulation vs. deregulation
* protecting stakeholders - including employees, customers, investors, and society at large * fostering competition - anti-trust legislation - merger and acquisition approvals * encouraging innovation and economic development * Stabilizing and stimulating the economy: - Monetary policy - adjusting the nation's money supply (the Fed) - Fiscal policy - adjusting tax rates, offering corporate "bailouts"
Multiple environments of business
* social environment (trends) * technological environment * economic environment (cost of supplies, labor) * legal and regulatory environment * market environment (target customers, competitors)
communism
* state ownership of all major productive resources * absence of economic classes * few opportunities for enterpreneurship * North Korea and China * as economic system = dismal failure * govt. remains strongly communist from political perspective China embraced many concepts of capitalism become one of world's most powerful/important economies as result
Achieving professionalism
* strive to excel * be dependable and accountable * be a team player * communicate effectively * demonstrate etiquette * make ethical decisions * maintain a confident, positive outlook
macroeconomics (big picture)
* study of a country's larger economic issues such as how firms compete, the effect of government policies, and how an economy maintains and allocates its scarce resources
microeconomics (small picture)
* study of economic behavior among consumers, businesses, and industries that collectively determine the quantity of goods and services demanded and supplied at different prices
Communicating effectively
* surefire way stand out from competition/establish competent professional - communication skills most important step * listen actively turn off own filters/biases to hear/understand someone else saying * provide practical information - information adapted specific needs * give facts not vague impressions - concrete language, specific detail, support information clear/convincing, accurate, ethical * don't present opinions as facts - * present information in concise, efficient manner - high-efficiency messages * clarify expectations/responsibilities - clearly state expectations to readers/listeners - what you can do for them * offer compelling, persuasive arguments/recommendations - make it clear to people how benefit from responding to your messages way you want them to
CSR: Employees
* the push for equality in employment - EEOC - discrimination * Affirmative Action * People with disabilities - Americans with Disabilities Act (ADA) * Occupational safety and health - OSHA
CSR: Consumers
* the right to buy safe products - and buy them safely - Consumer Product Safety Commission - Protection of privacy and prevention from identity theft * the right to be informed * the right to choose which products to buy * the right to be heard
Fiscal policy
* use of government revenue collection and spending to influence the business cycle. involves changes in the govt revenues and expenditures to stimulate a slow economy or dampen a growing economy that is in danger of overheating and causing inflation. revenue - govt adjust revenue bring in change tax rates, various fees collected from individuals/businesses - lower income tax rate govt hopes consumers & businesses spend/invest money saved expenditure - local, state, federal govt huge mkt for goods/services billions of collective buying power. govt stimulate economy increasing purchases - may create new programs or projects w/specific purpose expanding employment opportunities/increasing demand for goods/services controversy: bailouts made during 2008 & 2009 financial crisis - govt spent billions investments/loans to troubled banks encourage lending after credit mkts dried up & prevent large financial companies from collapsing - govt helped save automakers General Motors & Chrysler also
Demonstrating etiquette
* vital element of professionalism * etiquette - the expected norms of behavior in any particular situation * way you conduct yourself, interact w/others, handle conflict have profound influence on company's success/your career * etiquette blunders significant effect - financial costs - lower productivity/lost business opportunities * executives hire/promote you expect your behavior protect company reputation * shows respect for others/contribute to smooth-running workplace
Transparency International
**Transparency International (watchdog group works to reduce business-govt corruption around the world says "abuse of power for personal gain - siphoning off public/common resources into private pockets unacceptable in ALL cultures/societies"
Factors influencing ethical behavior
*cultural differences * knowledge * organizational behavior - code of ethics - whistle blowing
planned system * social equality major goal
- economic system in which the government controls most of the factors of production and regulates their allocation. - governments largely control allocation of resources and limit freedom of choice to accomplish government goals. - B/c social equality major goal of planned systems, private enterprise and the pursuit of private gain generally regarded wasteful and exploitive. - planned system allows individuals least degree economic freedom is communism - still exists in few countries - North Korea and China.
Forms of International Business Activity 5 Common Forms of International Business
- importing and exporting - licensing - franchising - strategic alliances and joint ventures - foreign direct investment each has varying degrees of ownership, financial commitment, risk
Macro: Inflation
- inflation is the steady rise of in the average prices for goods and services - deflation is the sustained fall of average prices - both affect purchasing power
Approaches to resolving ethical dilemmas
- justice - treat people equally or at least fairly in a way that makes rational and moral sense - utilitarianism - choose the option that delivers the most good for the most people (or protects the most people from a negative outcome) - individual rights - to the greatest possible extent, respect the rights of all individuals, particularly their right to control their own destinies - individual responsibilities - focus on the ethical duties of the individuals involved in the situation - the common good - emphasize qualities and conditions that benefit the community as a whole, such as peace and public safety - virtue - emphasize desirable character traits such as integrity and compassion
Macro: Unemployment
- one of the most serious effects of economic contraction - frictional, structional, cyclical, and seasonal
Marketing Specialist
- opportunities exist in interrelated tasks identifying/understanding market opportunities - shaping product, pricing, communication strategies needed - branding, strategy, electronic commerce, advertising, public relations, creative communication, interpersonal relations, social media - some small, almost all mid & large companies variety marketing positions - jobs in advertising agencies, public relations, (PR) firms, others offer specialized services to clients -some highly specialized - advertising copywriter, e-commerce architect) -others other marketing - ex: brand managers deal w/ variety marketing/sales functions
Being a team player - if team fails, you fail too
- professionals know contributors to larger cause - not all about them - being team player in business is balancing act like athletics - pay enough attention to own efforts/skills make sure pull own weight while also pay attention to overall team effort ensure team succeeds - great team players know how to make those around them more effective - lend a hand crunch time, sharing resources, removing obstacles, making introductions, offering expertise **ability to help others improve their performance is one of the key attributes executives look for when they want to promote people into management
Striving to excel
- pros good at what do never stop improving - no matter job or far from aspirations, strive to perform at the highest possible level - ethical obligation give employer/customers best effort but excelling each level in career best way to keep climbing up to new positions of responsibility - being good at what you do = sense of satisfaction - commitment to continuous learning/improvement - nature of work often changes as markets/technologies evolve w/expectations of quality increase over time - view constant change as positive thing - way to avoid stagnation/boredom
The Macro View Competition in the free market system
- pure competion - ex: local farmer's market - monopoly - ex.: drug company is air-tight patent - monopolistic competition - most businesses today - oligopoly - ex: oil companies - high barriers to entry
Ethical decision making
- resolving ethical dilemmas (vs. ethical lapses) * be as objective as possible * don't assume other people think the way that you do * watch out for conflicts of interest
nationalizing
- taking ownership of selected companies or in extreme cases entire industries - a government's takeover of selected companies or industries
Importing
- the buying of goods from a supplier in another country purchasing goods or services from another country and bringing them into one's own country
Sales Professional
- thrive on competition, enjoy solving problems, energized by working w/wide variety range people -responsible for building relationships w/customers - help them make purchase decisions - as consumer exposure to sales limited to retail but field is diverse - sell design services to pharmaceuticals to airliners -may enjoy freedom/flexibility not found w/in office - pressure intense - immediate indicator success/failure -most salespeople specific targets or quotas expected to meet
relationship between business and society - both need each other but each needs other to be healthy and successful
-Consumers in contemporary societies enjoy and expect a wide range of benefits, from education and healthcare to credit and products that are safe to use. -Profit-seeking companies are the economic engine that powers modern society; they generate the vast majority of the money in a nation's economy - directly through own taxes-purchases or indirectly through taxes/purchases made employees they support - when assessing society's standard of living - goods/services created by profit-seeking companies - companies can't operate profitably w/o benefits provided by stable, functioning society: talented/healthy employees, legal framework to pursue commerce, dependable transportation infrastructure, opportunities raise money, customers w/ability pay for goods/services
CSR: The Natural Environment
-First, the creation, delivery, use, and disposal of products that society values virtually always generate pollution and consume natural resources. i.e. Google largest user electricity in world - 2/3 country electricity still generated by coal, oil or natural gas electricity still affects environment -Second, "environmental" causes are often as much about human health and safety as they are about forests, rivers, and wildlife. clean air, water, soil affects everyone -Third, many of these issues often require tough trade-offs, occasional sacrifice, disruptive change, and decision making in the face of uncertainty
6 Reasons help explain why countries and companies trade internationally
1. Focusing on relative strengths - classic theory comparative advantage - each country should specialize in areas produce more efficiently than other countries - trade for goods/services can't produce as economically - such specialization/exchange increase country's total output/allow both trading partners to enjoy higher standard of living. 2. Expanding markets - most companies ambitions too large - U.S. companies Microsoft & Boeing fraction of current size if limited only to U.S. marketplace others i.e. Toyota, Shell, Nestle based in other countries view U.S. consumer/business markets vast opportunity. 3. Pursuing economies of scale - by expanding markets, companies benefit from economies of scale - enable to produce goods/services lower costs by purchasing, manufacturing, distributing higher quantities. 4. Acquiring materials, goods, services - no country produce all its citizens want w/prices want to pay. China's growing middle class lg. appetite consumer products - country low # brick/mortar stores - voice concerns over quality locally produced goods. RESULT - millions Chinese shop online retail often U.S. companies expanding online presence in China 5. Keeping up with customers - some companies must expand to keep/attract multinational customers - retailer w/stores 20 countries hire one ad agency manage all campaigns. Agency might need open offices in all 20 countries for consideration. 6. Keeping up w/competitors - companies may forced engage global scale b/c competitors are. If not, allow competitor increase financial resources/greater threat everywhere companies compete even own turf
3 steps make leap consumer to business professional
1. develop business mindset views business from inside out rather than outside in 2. recognize the positive and negative effects that business can have on society, and use this course to develop a business vocabulary 3. explore wide variety jobs in field of business
2 enablers help with growth of global business
1. world's borders more open trade than decades before - b/c international trade organizations growing awareness by most govts healthy trade help their economies 2. advances in communication/transportation technologies made global trade safer, easier, more profitable.
Occupational Safety and Health
1960s concern over workplace hazards - passage of the Occupational Safety and Health Act of 1970 set mandatory standards for safety and health and also est. the Occupational Safety and Health Administration (OSHA) to enforce them. Standards govern hazardous materials to ergonomics - study of how people interact w/ computers/other machines concerns for employee safety extends beyond own workforce acute in US companies contract out production to factories in Asia, Latin America, parts of US to make products under brand names. Sweatshops - disparaging term applied to production facilities that treat workers poorly. Nike taking positive steps improve conditions in factories US colleges nearly 200 joined Fair Labor Association help ensure logo products manufactured ethically.
people with disabilities
1990 - passage of federal Americans with Disabilities Act (ADA) physical/mental difficulties people help guarantees equal opportunities in housing, transportation, education, employment, other areas for estimated 50-75 million people in US w/disabilities defined 1990 law - disability is a broad term that refers not only to those w/physical handicaps but also w/cancer, heart disease, diabetes, epilepsy, HIV/AIDS, drug addiction, alcoholism, emotional illness, and other conditions. In most situations, employers can't legally require job applicants to pass a physical examination as condition of employment and are also required to make reasonable accomodations to meet the needs of employees w/disabilities, such as modifying workstations or schedules.
North American Free Trade Agreement (NAFTA)
1994 - United States, Canada, Mexico formed NAFTA paving way free flow goods, services, capital w/in bloc through phased elimination of tariffs/quotas Controversial: assessing treaty's full impact difficult b/c many economic factors involved & variety forces affected all 3 countries' economies past 2 decades success depends on what measured trade increased among 3 nations, countries benefited easier access to markets Mexican exports up U.S. & other foreign companies invested billions in Mexico some Mexican companies thriving, some like agriculture hurt by low-cost imports from US manufacturing job Mexico hoped to attract went to China, etc. US promised benefits of lower consumer prices steady export markets small farmers didn't materialize w/ benefits of NAFTA gone to huge agribusiness corps NAFTA destroyed US jobs instead of creating jobs **NAFTA illustrates challenge of analyzing international economic activity & linking measurable effects to specific causes - common w/ economic change - some groups gain at expense of others loss 20th anniversary 2014 congress report NAFTA overall effect "NAFTA didn't cause huge job losses fear by critics or the large economic gains predicted by supporters"
scarcity
A situation in which unlimited wants exceed the limited resources available to fulfill those wants Limited quantities of resources to meet unlimited wants * tradeoffs * opportunity costs
Macro View - competition - pure competition - monopoly - monopolistic competition
4 Issues essential understanding behavior of economy
CSR Consumers
4 fundamental consumer rights - right to buy safe products & buy them safely - right to be informed - right to choose which products to buy - right to be heard
Perspectives on Corporate Social Responsibility 4 perspectives
4 perspectives encourage ethical behavior/promote mutually beneficial relationship between business & society - est. expectations how business conducted
Accountant
A person who plans, summarizes, analyzes, and interprets accounting information. - intersection mathematics/business - management accountants responsible for collecting, analyzing, reporting on financial matters - analyzing budgets, assesing manufacturing costs of new products, preparing state/federal tax returns - Internal auditors - verify work of accounting - look for opportunities improve efficiency/cost effectiveness - Public accountants offer accounting, tax preparation, investment advice to individuals, companies, other organizations - external auditors verify the financial reports of public companies required by law - forensic accounts investigate financial crimes * need to have affinity for numbers, analytical minds, attention to detail - effect investors, employees, executives - accuracy/timeliness critical and communication skills - computer skills esp. those involved w/design/operation accounting systems
21. Jason has certain physical disabilities which keep him in a wheelchair. He is very bright and can do many jobs on the computer and jobs that require skilled assembly. However, due to his disability, he has not been able to secure a job. Which government agency can Jason approach to assist him in this case? A. Affirmative Action Agency B. Fair Labor Association C. Supreme Court of the United States D. ADA Your answer is correct. E. OSHA
ADA
The European Union (EU)
An international organization of European countries formed after World War II to reduce trade barriers and increase cooperation among its members. one of largest blocs membership 24 countries plus half billion people as a whole constitutes world's largest economy EU nations eliminated limits of trade such as local regulations, variations in product standards, protectionist measures now trade flows among member countries like states in US extends beyond Europe w/ companies create products meet EU specs. "CE" marks product - Conformite Europeene - indicates product met EU standards - health, safety, environmental responsibility **created own currency - the euro now adopted by more half member states of EU common currency has made financial transactions simpler for consumers & businesses, lowered inflation & interest rates, improved transparency - pricing, more stable currency, given EU stronger presence in global financial markets --w/ widespread trade imbalances i.e. Greece, Italy, etc. weighing down economies all Eurozone members - some questions if currency bloc continue in current configuration
Antitrust Legislation
Antitrust laws limit what businesses can/can't do to ensure all competitors have equal chance of succeeding. i.e. Sherman Antitrust Act Clayton Antitrust Act Federal Trade Commission Act generally sought to rein in power of few huge companies that had financial/management control of significant number of other companies in same industry. referred to as trusts (anti-trust legislation) - like Standard Oil - huge companies controlled enough of the supply & distribution in respective industries to muscle smaller companies in same industry out of way govt US/Europe taken action Microsoft & Intel prevent unfair competitive practices
demand behavior of buyers
Buyers' willingness and ability to purchase products at a given time at various price points refers to amount of a good or service that customers will buy at a given time at various prices
Corporate Social Responsibility
CSR is the notion that business has obligations to society beyond the pursuit of profits
Global Business Environment
Challenges: countries have unique laws, customs, consumer preferences, ethical standards, labor skills, political & economic forces Essential first step: understand cultural & legal differences successful global business leaders recognize/respect differences in language, social values, ideas of status, decision-making habits, attitudes toward time, use of space, body language, manners, religions, ethical standards Ignorance or indifference toward cultural differences common cause of communication breakdowns internationally AVOID stereotyping and ethnocentrism education & open mind best ways prepare business w/people other culture
Business Mindset
Consumer's Perspective and Manager's Perspective p. 7 cost of making product, promoting it, distributing it Function Marketing Image Price Availability Service
right to be heard
Consumers have the right to complain about a product and to be listened to. social media give consumers numerous ways to ask questions, voice concerns, provide feedback, demand attention savvy companies monitor i.e. Twitter, blogs, other online venues if respond defensive or no response - lose business to companies embrace new media communications and power it gives consumers
Which of the following statements is accurate? A.Smart and responsible decision making in business depends on the least amount of risk possible. B.Highly profitable businesses only take on business ventures free of risk, in order to ensure predictability and future success. C.Business ventures offering the most reward always come with the most risk, and therefore are usually not worthwhile ventures in the long run. D.Without the promise of rewards, businesses would have no incentive to take on risks, and risks associated with business decisions are important to those decisions in order to encourage smart and responsible decision making.E.Business decisions involving large amounts of risk but high reward often lead to irresponsible and poor decision making E.Business decisions involving large amounts of risk but high reward often lead to irresponsible and poor decision making
D.Without the promise of rewards, businesses would have no incentive to take on risks, and risks associated with business decisions are important to those decisions in order to encourage smart and responsible decision making.E.Business decisions involving large amounts of risk but high reward often lead to irresponsible and poor decision making
Ch 4 Business ethics and corporate social responsibility What are ethics?
Ethics are the principles and standards of moral behavior that are accepted by society as right and wrong.
Factors of production
Land, labor, and capital; the three groups of resources that are used to make all goods and services * natural resources - land, minerals, water, etc. * human resources - all of the workforce * capital - money, tools, buildings, etc. * entrepreneurship - spirit of innovation * knowledge - collective intelligence of the organization
Economic measures and monitors
Leading indicators - suggest change may happen Lagging indicators - provide confirmation that something occurred. & Price Inceses * Economic Indicators - key leading indicators - suggest what is coming * housing starts * durable goods orders - Key lagging indicators - provide confirmation of what has occurred * corporate profits * unemployment * Price indexes - monitor inflation and deflation - consumer price index (CPI) - producer price index (PPI) * National economic output - gross domestic product (GDP) - total output of a country's goods ad services for specified period (usually a year) - broadest measure of an economy's overall health
Micro vs. Macroeconomics
Macro looks at the entire economy, big picture, how everyone is affected. Micro looks at the individuals in the economy and their roles.
49.Which group was created when the United States, Canada, and Mexico signed a treaty allowing free flow of goods, services, and capital between the three countries? A. APEC B. IMF C. WTO D. NAFTA Your answer is correct. E. EU
NAFTA
6. Which group was created when the US, Canada, and Mexico signed a treaty allowing free flow of goods, services, and capital between the three countries?
NAFTA
nongovernmental organizations (NGOs)
Nonprofit groups that provide charitable services or promote social and environmental causes
22. Which of the following set mandatory standards for safety and health at the workplace? A. Americans with Disabilities Act B. Affirmative action C. Civil Rights Act of 1964 D. Civil Rights Act of 1991 E. Occupational Safety and Health Act of 1970
Occupational Safety and Health Act of 1970
Philanthropy vs. strategic CSR
Philanthropy involves donating money, or other resources to various causes without regard for any direct business benefits Strategic CSR involves social contributions that are directly aligned with a company's overall business strategy - this would be preferred
Which of the following was established in the 1940s to foster worldwide financial cooperation and enhance the strength of the world economy?
The International Monetary Fund (IMF)
Which is a stable medium for negotiating and observing international trade procedures and arbitrating trade disagreements among members? A.The Asia-Pacific Economic Cooperation (APEC) B.The World Bank C.North American Free Trade Agreement (NAFTA) D.The International Monetary Fund (IMF) E.The World Trade Organization (WTO)
The World Trade Organization (WTO)
theory of comparative advantage
The classic theory of comparative advantage suggests that each country should specialize in those areas where it can produce more efficiently than other countries, and it should trade for goods and services that it can't produce as economically. The basic argument is that such specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.
How International Trade is Measured
U.S. imports more goods than it exports BUT it exports more services than it imports. U.S. Exports/Imports since 1990 - US trade deficit growing dramatically recent years - maintains trade surplus in services, international market for services isn't as large as market for goods. Trade deficit in goods outweighs trade surplus in services = overall trade deficit
Ch. 1 Developing a Business Mindset Business
Understanding what businesses do A business is any profit-seeking organization that provides goods and services designed to satisfy customers' needs
International trade organizations
World Trade Organization, International Monetary Fund, and World Bank * Organizations facilitating international trade * World trade organization (WTO) - mediates trade disputes among 160 member countries * International Monetary Fund (IMF) - helps countries manage their economies more effectively - offers technical advice, training, and short term loans * World Bank - goal of eradicting extreme poverty around the world Trading blocs - NAFTA - The European Union - now the world's largest economy - The Asia-Pacific Economic Cooperation - 50% of the world's GDP - The Trans-Pacific Partnership
Cynical CSR
a company accused of irresponsible behavior promotes itself as being socially responsible w/o making substantial improvements in business practices i.e. environmental activists use term greenwash (combo of green and whitewash - term suggests covering something up) as label for publicity efforts present companies as environmentally friendly when actions say otherwise Friedman said after 35 yrs most of claims of social responsibility pure public relations"
market environment
a company's target customers, the buying influences that shape the behavior of those customers, and competitors that market similar products to those customers every company operates w/in specific market environment composed of: 1. its target customers 2. buying influences that shape behavior of those customers 3. competitors - other companies that market similar products to those customers aviation barriers to entry high - customer decision-making lengthy/driven almost entirely by financial considerations clothing fashion/fads change weeks/days - celebrities other influences major impact consumer choices Much easier to launch new line clothing than airplane w/competitors appearing overnight
identity theft
a crime in which thieves steal personal information and use it to take out loans and commit other types of fraud i.e. request govt documents/tax refunds, get expensive medical procedures, commit other types of fraud
multidomestic strategy
a decentralized approach to international expansion in which a company creates highly independent operating units in each new country - a company creates highly independent operating units each new country giving local managers freedom run to own operations like they're independent companies - helps company respond quickly/effectively to local mkt needs BUT doesn't deliver the economy-of-scale advantages other strategies does -lack of centralized control lead situations local managers act ways contrary to corporate strategy/guidelines i.e. French grocery Carrefour learned local managers in China using commonplace strategy luring customer in w/low prices but charging more in stores, Carrefour clamped down although common practice in China (although illegal)
trade surplus
a favorable trade balance created when a country exports more than it imports years when value of goods/services exported by country exceeds value of goods/services it imports country has positive balance of trade or trade surplus
16. An economic structure in which judgements about what to manufacture and in what amounts are determined by the market's consumers and retailers is known as _________. A. a free-market system Your answer is correct. B. nationalism C. capitalism D. a planned system E. socialism
a free-market system
An economic structure in which judgements about what to manufacture and in what amounts are determined by the market's consumers and retailers is known as _________. A. a planned system B.a free-market system C.nationalism D.socialism E.capitalism
a free-market system
demand curve
a graph of the quantities of a product that buyers will purchase at various prices shows the amount of product that buyers will purchase at various prices, all other factors being equal typically slope downward - as price drops more people willing to buy initial demand - shows possible demand curve as price decreases, demand increases vice versa airlines use yield management software so can lower prices to stimulate more purchase if demand weakens Demand curve shifts right if one or more occur: -------> - customer income increases - customer preferences toward product improve - prices of substitute products increase - prices of complementary products decrease - marketing expenditures increase - customers become more optimistic - number of customers increases Demand curve shifts left if one or more occur: <---------- customer income decreases - customer preferences toward product decline - prices of substitute products decrease - marketing expenditures decrease - customers become more pessimistic - number of customers decreases
Financial Manager -touches every part of company
a manager who is primarily responsible for an organization's financial resources - perform leadership/strategic functions - controllers oversee prep of income statements, balance sheets, other financial reports - frequently manage accounting departments - treasurers/finance officers more strategic role establishing long-term financial goals/budgets investing firm's funds, raising capital as needed - credit managers - supervise credit accounts est. for customers - cash managers - monitor/control cash flow **unlike accounting tasks, financial managers work usually kept in-house esp. mid-size/large companies * touches every part of company * need broad understanding of various functional areas in business is key attribute * ability to communicate w/people who aren't financial experts also vital * aware of information technology depts. important for chief financial officers (CFOs) & other top financial managers to direct company investments in new or improved accounting systems needed
consumer price index (CPI)
a monthly statistic that measures changes in the prices of a representative collective of consumer goods and services measures rate of inflation by comparing the change in prices of a representative "basket" of consumer goods and services - clothing, food, housing, transportation govt used CPI adjust Social Security payments - businesses use it calculate cost-of-living employee increases - many use as gauge how well govt keeping inflation under control
consumerism
a movement that pressures businesses to consider consumer needs and interests
35. Which of the following BEST describes the concept of business? A. An outline of how to generate revenue B. A profit-seeking organization that provides goods and services Your answer is correct. C. The money a company generates through the sale of goods and services D. The amount of money left over after expenses E. All companies trying to sell products to the same customer base
a profit-seeking organization that provides goods and services
barrier to entry
a resource or capability a company must have before it can start competing in a given market. other barriers: government testing and approval, tightly controlled markets, strict licensing procedures, limited supplies of raw materials, and the need for highly skilled employees.
culture
a shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior cultural background influences way prioritize important in life, define attitude toward appropriate in situation, establishes rules of behavior
ethical lapse
a situation in which an individual or a group makes a decision that is morally wrong, illegal, or unethical
ethical dilemma
a situation in which more than one side of an issue can be supported with valid arguments situation in which you must choose between conflicting but arguably valid options, or even situations in which all your options are unpleasant Ways to find right answer * frame situation accurately taking into account all relevant issues/questions * identify all parties affected by your decision - consider rights of everyone involved * be as objective as possible - not making decision to only protect own emotions - don't assume viewing situation fairly/objectively * don't assume others think like you - "Golden Rule" isn't applicable if they don't WANT this treatment * watch out for conflicts of interest -
monopoly
a situation in which one company dominates a market to the degree that it can control prices one supplier so thoroughly dominates a market that it can control prices and essentially shut out other competitors can happen "naturally" as companies innovate or markets evolve (pure monopoly) or by government mandate (a regulated monopoly) ***lack of competition in a monopoly situation is considered so detrimental to a free-market economy that monopolies are often prohibited by law
supply behavior of sellers
a specific quantity of a product that the seller or producer is able and willing to provide at various prices refers to the quantities of a good or service that producers will provide on a particular date at various prices
producer price index (PPI)
a statistical measure of price trends at the producer and wholesaler levels reflecting what businesses are paying for the products they need both CPI and PPI often referred to as single index but actually family of 600+ industry-specific indexes PPIs monitor economic activity and managerial uses = help companies place accurate value on inventories protect buyers/sellers w/price-escalation clauses in long-term purchasing contracts
Affirmative Action
activities undertaken by businesses to recruit and promote members of groups whose economic progress has been hindered through either legal barriers or established practices. in 1960s, affirmative action programs developed to encourage organizations to recruit and promote members of groups whose past economic progress has been hindered through legal barriers or est. practices - address various situations - college admissions - hiring - business w/govt agencies - military vets w/ disabilities - specific ethnic groups - popular usage - "affirmative action" usually refers to programs based on race - remains controversial/politicized issue opponents claim creates double standard - encourage reverse discrimination against white males proponents claim remains crucial part effort ensure equal opportunities for all key point of contention - whether affirmative action programs still needed given antidiscrimination laws now in place opponents assert everyone has equal shot success now, programs unnecessary - should be based on income, not race, proponents argue laws can't remove all institutional barriers discrimination going back decades left many families/communities disadvantage diversity initiatives
promotion
advertising, public relations, etc. present dilemma of standardization vs. customization b/c language differences - consider using nonverbal symbols - (i.e.significance of colors, hand gestures) local competition, other cultural differences
5. While still controversial, _____________ was created to encourage organizations to hire and promote individuals whose economic success may have been otherwise hindered through established practices. A. affirmative action Your answer is correct. B. consumerism C. cap and trade D. transparency E. strategic CSR
affirmative action
Which of the following has remained controversial since its inception, with claims of double standards that can encourage reverse discrimination? A. The ADA B.The Civil Rights Act of 1991 C. Affirmative action D.The EEOC E.OSHA
affirmative action
licensing
agreement to produce and market another company's product in exchange for a royalty or fee. popular approach to international business license agreements allow one company to use some or all of another firm's intellectual property (patents, trademarks, brand names, copyrights or trade secrets) * low up-front costs attractive aspect of international licensing i.e. Pharmaceutical company Germany's Boehringer Ingelheim use licensing to enter foreign markets After Pharm Co. developed/patented new drug, often more efficient grant existing local firms right to manufacture/distribute patented drug in return for royalty payments. * not restricted solely international business - company can also license products/technology to others in domestic market
42.The sum total of a nation's net trade, i.e., its exports minus imports in a given year, defines its _________. A. economies of scale B. balance of payments C. foreign direct investment D. protectionism E. balance of trade
balance of trade
MODULE 1 QUIZ 1. The sum total of a nation's net trade, i.e. its exports minus imports in a given year, defines its?
balance of trade
The sum total of a nation's net trade, i.e., its exports minus imports in a given year, defines its _________. A.economies of scale B.balance of payments C.protectionism D.balance of trade E.foreign direct investment
balance of trade
2 key primary measurements nation's level of international trade
balance of trade balance of payments
Fostering competition
based on belief fair competition benefits economy/society in general, govts intervene in markets to preserve competition and ensure no single enterprise becomes too powerful ex: company w/monopoly potentially harm customers by raising prices/stifling innovation and harm potential competitors by denying access to markets laws/regulations est. help prevent individual companies or groups of companies from taking control of markets or acting in other ways that restrain competition or harm consumers. legislators may need adjust business regulations maintain level playing field ex: disruptive technology online commerce - 45 US states collect sales tax in physical stores but not online retailers could add 5-10% tax to purchase price - physical stores complain inconsistent regulations give online retailers unfair competive advantage SO now half states have online sales tax - Amazon
gross domestic product (GDP)
basic measure of country's economic output
Maintaining a confident, positive outlook
be optimistic believe in what you're doing believe in yourself and ability to solve problems/overcome obstacles acknowledge things may be difficult - buckle down get job done no whining/slacking off even when tough your energy, positive or negative is contagious ** personal demeanor is vital element of workplace harmony * one negative person can make an entire office miserable and unproductive * every person in a company has a responsibility to contribute to a positive, productive work environment
14. Yolanda is known around the office as the "go to" person when a problem arises. She is known for always meeting commitments, staying on schedule, and staying within budgets. Which of the seven key traits of professionalism does Yolanda demonstrate? A. Making ethical decisions B. Being a team player C. Being dependable and accountable Your answer is correct. D. Communicating effectively E. Demonstrating etiquette
being dependable and accountable
Which type of organization builds CSR into the company's base and legally requires the company to pursue a societal or environmental goal?
benefit corporation
balance of payments broader measure includes all incoming payments minus all outgoing payments
broadest indicator of international trade. total flow of money into the country minus the total flow of money out of the country over some period of time sum of all payments one nation receives from other nations minus the sum of all payments it makes to other nations, over some specified period of time. includes balance of trade plus the net dollars received/spent on foreign investment, military expenditures, tourism, foreign aid, other international transactions i.e. US company buy all or part of company in another country investment counted in balance of payments not balance of trade. i.e. foreign company buys US company or purchases US stocks, bonds, or real estate, transactions part of balance of payments.
benefit corporation
builds proactive CSR into a company's very foundation and legally obligates it to pursue a social or environmental goal
Functional Strategies for International Expansion
choosing right form of business to pursue first of many decisions company makes moving to other countries - human resources - mkting - financial man. - some important involve products - customer support - pricing - promotion - staffing example of failure when Target opened in Canada after noticing Canadians crossing border into US to shop Target - dismal failure too much too soon w/o proper research into locations, pricing, adequately stocked stores and local competition cost company billions
23. Which of the following uses legal parameters based on comprehensive legal codes? A. Civil law Your answer is correct. B. Organisation for Economic Co-Operation and Development C. Common law D. Foreign Corrupt Practices Act E. Theocratic law
civil law
Which of the following uses legal parameters based on comprehensive legal codes? A.Civil law B.Common law C. Organisation for Economic Co-Operation and Development D.Theocratic law E.Foreign Corrupt Practices Act
civil law
entrepreneurship
combination and the spirit of innovation, the initiative and the willingness to take the risks involved in creating and operating businesses
Foreign Exchange Rates and Currency Valuations
companies buy/sell goods/services global marketplace, complete transaction exchanging currencies = foreign exchange - conversion of one currency into an equivalent amount of another currency w/ the number of units of one currency exchanged for a unit of the second currency - exchange rate between currencies.
Information Technology (IT)
companies engage process R&D design new/better ways to run operations with effort going into IT systems promote communication/information usage through company or allow companies offer new services to customers - systems that promote communication and information usage through the company or that allow companies to offer new services to their customers
Proactive CSR
companies have a responsibility to help society beyond making a profit, simply paying taxes and obeying the law back up beliefs w/actions on own initiative i.e. Laurie Erickson, CEO The Finest Accessories - free scarves for cancer patients who lost hair
Defensive CSR
companies pressured by NGOs - nonprofit groups that provide charitable services or promote causes i.e. worker's rights - environmental protection one way to address to avoid criticism, address negative publicity even if engage in proactive CSR may still be criticized by advocacy groups
organizational behavior
companies w/strong ethical practices create cultures that reward good behavior - don't intentionally/unintentionally reward bad behavior i.e. United Technologies - ethical behavior starts at the top -executives responsible to meet clearly defined ethical standards w/annual compensation tied to performance many companies develop programs for ethical conduct - combine training/communication/code of ethics defines values/principles used to guide decisions
multinational corporations (MNCs)
companies with operations in more than one country companies that est. physical presence in multiple countries through FDI are called multinational corporations and can approach international mkts in variety of ways (organizational strategies for international expansion)
healthy connection between risk and reward
company makes decision involves risk outcome positive company reaps rewards outcome negative company suffers consequences
moral hazard link between risk and reward is broken
company makes decision involves some risk if outcome is positive company reaps rewards outcome negative someone else (including other companies, consumers, or taxpayers suffers the consequences ex: home-mortgage companies lending money to homeowners who were practically guaranteed to default on their loans, but then selling those loans as investments and transferring risk of nonpayment to someone else
Efforts to conserve resources and reduce pollution
concerns growing since Industrial Age 19th century widespread concern from 1960s when ecology (study of relationship between organisms and natural environment) entered mainstream discussion 1963 fed, state, local govt enacting laws/regulations reduce pollution "reduce, reuse, recycle" * Google addresses conservation as responsible for energy consumption - reducing energy usage data centers, investing in renewable energy * repurposing older computers for new uses, using position as major corporation to help shape energy policy & public awareness & sharing w/other companies to help them reduce resource usage Businesses/govts/NGOs pursuing variety political/economic solution
Which of the following forces companies to take customer demands and interests into account and has provoked several companies to develop customer affairs divisions in order to handle customer grievances? A. Consumerism B.Insider trading C.Philanthropy D.Strategic corporate social responsibility E. Affirmative action
consumerism
Right to be informed
consumers right know what buying, how to use it, risks to them right to know true price of goods/services & details service contracts govt regs ensure consumers get info need make informed choices buyers responsible too morally if not always legally not reading labels/contracts/ask help no excuse for uninformed spread of social media/use in social commerce buyers educate each other helped shift power from sellers to buyers
5.The notion that a company has certain duties toward humanity that it must meet, excluding activities involving building revenue, is known as
corporate social responsibility
The notion that a company has certain duties toward humanity that it must meet, excluding activities involving building revenue, is known as ___________.
corporate social responsibility
The notion that a company has certain duties toward humanity that it must meet, excluding activities involving building revenue, is known as ___________. A. corporate social responsibility Your answer is correct. B. consumerism C. transparency D. ethics E. conflicts of interest
corporate social responsibility
tax haven
country whose favorable banking laws and low tax rates give companies the opportunity to shield some of their income from higher tax rates in their home countries or other countries where they do business vast amts. criminal money moves through/sheltered tax havens isn't always illegal, but highly controversial esp. multinational corporations use internal transfers/other processes lower tax burdens i.e. Microsoft, Google, Amazon lowered tax burdens in UK recording UK sales through Ireland, Luxembourg corp. tax rates much lower Starbucks 1/3 coffeeshop mkt in UK but 15 yr span avoided paying corp tax in 14 of those yrs. through international transfers erasing taxable income = UK stores pay full UK tax giving them competitive disadvantage
goods-producing business
create value by making "things" most things are tangible - have physical presence intangible - software, music downloads, digital products companies that create value by making "things" most of which are tangible (digital products such as software are a notable exception)
service businesses
create value by performing activities that deliver some benefit to the customer - finance, insurance, transportation, construction, utilities, wholesale and retail trade, banking, entertainment, health care, maintenance and repair, and information ex: Twitter, Jiffy Lube, HBO, Verizon Wireless many are goods-producing and service businesses companies that create value by performing activities that deliver some benefit to customers. our country is manufacturing powerhouse, service sector accounts for 70% economic activity 80% of jobs in US
3 factors that influence ethical behavior
cultural differences knowledge organizational behavior
A collective system of symbols, principles, approaches, values, and standards for behavior is referred to as ______.
culture
strong and weak exchange rate
currency strong relative to another when exchange rate higher than normal weak currency rate lower than "normal" "strong" not necessarily "good" "weak" not necessarily "bad" *exchange rates can dramatically affect company's financial results by raising/lowering cost of supplies it imports - raising/lowering price of goods exports
40.Which of the following is a key issue that companies face with regard to products? A. Customization versus standardization Your answer is correct. B. Ability to promote the product C. Level of customer support D. Pricing of product E. Staffing options
customization versus standardization
MISSED 36.Your professor gives you a diagram that shows the amount of merchandise consumers tend to buy at varying costs. Which of the following best describes this chart? A. Demand curve This is the correct answer. B. Consumer price index C. Economic indicator D. Supply curve Your answer is not correct. E. Producer price index
demand curve Incorrect. In general, a firm's willingness to produce and sell a product increases as the price it can charge and its profit potential per item increase. In other words, as the price goes up, the quantity supplied generally goes up. The depiction of the relationship between prices and quantities that sellers will offer for sale, regardless of demand, is called a supply curve.
_____________ involves eliminating rules in order to allow the market to more easily inhibit extremes and right itself over a period of time.
deregulation
26. During a lecture, Professor Jhocum told students about how 40 years ago, when she was searching for her first job out of college, she was very limited regarding for which jobs she was considered qualified simply based on the fact that she was a woman, even though she had graduated at the top of her class and was well qualified for certain positions. Of which of the following was Professor Jhocum a victim? A. Ethical dilemma B. Transparency C. Consumerism D. Affirmative action E. Discrimination
discrimination
During a lecture, Professor Jhocum told students about how 40 years ago, when she was searching for her first job out of college, she was very limited regarding for which jobs she was considered qualified simply based on the fact that she was a woman, even though she had graduated at the top of her class and was well qualified for certain positions. Of which of the following was Professor Jhocum a victim? A.Transparency B.Consumerism C.Affirmative action D.Discrimination E. Ethical dilemma
discrimination
The right to buy safe products and to buy them safely includes __________.
do no harm foundation for CSR US govt imposes safety standards enforced by Consumer Product Safety Commission (CPSC) & other state/fed agencies companies not comply w/rules - forced take corrective action, threat of product-liability suits, declining sales motivates companies meet safety standards safety concerns - safe toys, food, autos, online privacy, identity theft companies vital role fighting identity theft b/c collect information thieves use to commit fraud - credit card/social security numbers ***Any company that collects such information has clear ethical oblication keep it safe and secure - massive date-security breaches recent yrs indicates how poorly managing this obligation
assets
driving force behind most business prospects of earning profits and building assets - anything of meaningful value, from patents and brand names to real estate and company stock
Which of the following is NOT a commonly utilized approach by governments to interfere in international trade? A.Embargoes B. Dumping C.Quotas D.Export subsidies E.Tariffs
dumping
competitive advantage
each company seeks competitive advantage that makes its profits more appealing to its chosen cusotmers. Customers benefit from better products and more choices, and companies get to focus on what they do best. some aspects of a product or company that makes it more appealing to target customers
9. Which of the following is the study of the association between organisms and the natural environment? A. Ecology Your answer is correct. B. Cap and trade C. Greenwashing D. Proactive CSR E. Repurposing
ecology
Which of the following is the study of the association between organisms and the natural environment? A.Ecology B.Greenwashing C.Repurposing D.Proactive CSR E.Cap and trade
ecology
Situations that influence the cost and availability of products, services, and labor are considered part of which environment?
economic environment
The combination and interdependence of various economies around the world refers to _____. A.economies of scale B.economic globalization C.balance of trade D.comparative advantage E.trade surplus
economic globalization
Capitalism
economic system based on economic freedom and competition capitalism and private enterprise are terms most often used to describe the free-market system - one in which private parties (individuals, partnerships, or corporations) own and operate the majority of businesses and where competition, supply, and demand determine which goods and services are produced.
International Monetary Fund (IMF)
est. 1945 foster international financial cooperation & increase stability of international economy 188 member countries primary function - monitoring global financial developments, offer technical advice/training help countries manage economies effectively provides short-term loans to member countries - from help country deal w/natural disaster to stabilize country's economy to limit spread of financial crisis beyond its borders
Internation Trade Organizations
establish trading rules, resolve disputes, promote trade in global business ensure equitable trading practices & iron out disagreements what's fair/isn't
Which of the following represents the values and guidelines for proper conduct recognized in the workplace and everyday life as appropriate or inappropriate?
ethics
Accepting Risks in Pursuit of Rewards
every company from farmer to grocery store must accept some level of risk in order to conduct business bad weather, disease, destroy wheat crop shift consumer behavior - cash-strapped families in recession switching to bakery outlet instead of grocery store link risk and reward critical b/c 1- without promise of rewards business have no incentive to take on risks - w/o entrepreneurs and companies willing accept risk, little get done in economy 2- risk associated w/ business decisions needs to "stay attached" to those decisions to encourage smart and responsible decision making. If individuals and companies believe they can pursue rewards w/o facing risks that should be attached to those pursuits, more likely to engage in irresponsible and unethical behavior - situation known as moral hazard
whistle-blowing as means to call out unethical behavior
expressing concerns internally through formal reporting mechanisms or externally to news media or govt regulators not easy decision and may have consequences - 80% in one survey said were punished for coming forward w/concerns laws governing whistle-blowing complicated fed/state legislation difficult employees/employers navigate **essential function may be only way to alert management before serious damage
regulation vs. deregulation
having more rules in place to govern economic activity or having fewer rules in place and relying more on the market to prevent excesses and correct itself over time. *generally, the argument for more regulation asserts that companies can't always be counted on to act in ways that protect stakeholder interests and that the market can't be relied on as a mechanism to prevent or punish abuses and failures. the argument for deregulation contends that government interference can stifle innovations that ultimately help everyone by boosting the entire economy and that some regulations burden individual companies and industries with unfair costs and limitations.
global strategy
highly centralized approach to international expansion w/headquarters in the home country making all major decisions -company embraces notion of economic globalization viewing world as single integrated mkt. opposite of multidomestic strategy. managerial control highly centralized
24. Julie recently received a notice from a collections company informing her of several missed payments on her car loan. However, she does not own a car. After contacting her credit bureau, Julie discovers that in the past 2 months, a car loan and two credit cards have been acquired in her name. Julie knew nothing about them. Julie seems to be a victim of ___________. A. identity theft Your answer is correct. B. insider trading C. discrimination D. consumerism E. cap and trade
identity theft
Protecting stakeholders
in attempt to balance interests of stakeholders/protect those who might be adversely affected by business, U.S. federal govt has established numerous regulatory agencies. state/local govt agencies as well see society's concerns for ethical/socially responsible behavior and ongoing debate about business's role in society
International trade conflicts
if country can't produce good w/competitive cost global marketplace govt may subsidize exporters of this good w/ financial supports that allow charge lower prices than their business operations can support think of international trade as "more free" to "less free" not universally welcomed supporters - best way to ensure prosperity for all w/ US economists saying US should elminate barriers to trade - believe it produces winners/losers but winners gain more than losers lose = net effect is positive detractors/against- free trade unfair & threat to middle class - makes it too easy for companies exploit workers by pitting against e. other "race to the bottom"" *production moving to country w/lowest wages/fewest restrictions worker safety/environmental protection argument - companies prefer business countries stable democratic govt w/ less-developed nations motivated to improve economic/social policies help business/raise standard of living
recession * 2 consecutive quarters of decline in GDP * at least 6 months decline in GDP
if period of downward swing severe - ** defined as 2 consecutive quarters of decline in the gross domestic product - period during which national income, employment, and production all fall, **defined as at least six months of decline in the GDP (gross domestic product)
29. ABC Manufacturing, a Canadian company, regularly buys firefighting hose pipes from NBC Hosepipes in India. ABC's action is an example of _______. A. licensing B. strategic alliance C. exporting D. joint venture E. importing
importing
ABC Manufacturing, a Canadian company, regularly buys firefighting hose pipes from NBC Hosepipes in India. ABC's action is an example of _______.
importing
Forms of International business activity
importing/exporting, international licensing, international franchising, international strategic alliances and joint ventures, foreign direct investment * importing and exporting * international licensing - allowing a foreign company to use your patents * international francizing - McDonalds is in 100 countries * strategic alliances - long term partnerships between companies * joint ventures - companies come together to form new independent venture * foreign direct investment (FDI) - multinational corporations
Right to choose which products to buy
in US products # staggering if potentially harmful, govt take measures make illegal or consumers decide for themselves? i.e. cigarettes - nicotine harmful - 1965 Federal Cigarette Labeling and Advertising Act passed - requiring all cigarette packs carry Surgeon General's warnings. tobacco companies spent billions defending lawsuits by smokers w/cancer/respiratory diseases lawsuits/legislative activity continue - consumers still buy a legal product
discrimination
in a social and economic sense, denial of opportunities to individuals on the basis of some characteristic that has no bearing on their ability to perform in a job
Business Services
in addition to core functions - business service exist help companies w/ specific needs law, banking, real estate, etc. can be performed by in-house staff, external firms or combo of both use in-house legal for contracts engage specialist law firm help w/patent application all but smalles companies have accounting professionals on staff ***companies that sell shares of stock to public required to have financial records audited (reviewed) by outside accounting firm.
price indexes
in addition to other indicators, economists monitor several price indexes & nation's economic output to get sense of how well economy is working significant economic indicator - prices changes esp. price increases price indexes - way to monitor inflation or deflation in various sectors of economy Index is convenient way compare numbers over time computed by dividing current value of quantity by baseline historical value then multiplying by 100. economists say index is at 128 not increased by 28%
8. Which of the following describes an economic situation in which costs increase gradually through the economy as a whole? A. Recession B. Deregulation C. Inflation Your answer is correct. D. Oligopoly E. Supply curve
inflation
Resolving the CSR Dilemma
instantly eliminate cynical CSR - dishonest therefore unethical some proponents of minimalist CSR equate CSR w/ collectivism - term suggests socialism communism some consider CSR demands from activists extortion critics of contemporary business convinced corps never trusted/every CSR initiative cynical publicity stunt two-tiered approach CSR yield practical, ethical answer 1- companies take responsibility for consequences of actions/limit negative impact of their operations "do no harm" and not matter of choice society expects responsible behavior from citizens should also from businesses i.e. min. pollution/waste, min. depletion shared resources, honesty w/stakeholders, offer real value exchange for prices asked, avoid exploitation employees, customers, supppliers, communities, investors - some covered by law some not 2- matter of choice - companies choose to help way see fit - choices up to company not result of pressure from outside forces
stakeholders
internal and external groups affected by a company's decisions and activities - colleagues, employees, supervisors, investors, customers, suppliers, society at large when serving one stakeholder, business may neglect, be accused of neglect interests of other stakeholders in process ex: managers who are too narrowly focused on generating wealth for shareholders might not spend the funds necessary to create a safe work environment for employees or to minimize the business's impact on the community
Organisation for Economic Co-Operation and Development (OECD)
international body dedicated to fostering economic prosperity and combating poverty made bribery of foreign officials a criminal offense for its member nations
free trade
international trade unencumbered by restrictive measures - takes place w/o interferences - no regulations subsidize international trade should be viewed along continuum from "more free" to "less free"
Last year, ABC and NBC came together to create a new company called XYZ, which is legally separate and distinct from both ABC and NBC. XYZ is an example of _____.
joint venture
6. _______ is the analysis of a nation's more significant economic concerns, such the manner in which firms compete, the impact of government policies, and the allocation and preservation of an economy's limited resources. A. Socialism B. Capitalism C. Macroeconomics Your answer is correct. D. Monopolistic competition E. Microeconomics
macroeconomics
______ is the analysis of a nation's more significant economic concerns, such the manner in which firms compete, the impact of government policies, and the allocation and preservation of an economy's limited resources. A.Capitalism B. Macroeconomics C.Socialism D.Monopolistic competition E.Microeconomics
macroeconomics
43.Katie is working her way up the corporate ladder. She currently works with sometimes unpleasant customers and her job gets boring from time to time but she realizes that it is important for her to buckle down and get the job done and to keep a positive attitude, no matter what. Which of the following seven key traits of professionalism is Katie demonstrating? A. Being dependable and accountable B. Maintaining a confident, positive outlook Your answer is correct. C. Communicating effectively D. Being a team player E. Demonstrating a sense of etiquette
maintaining a confident, positive outlook
Katie is working her way up the corporate ladder. She currently works with sometimes unpleasant customers and her job gets boring from time to time but she realizes that it is important for her to buckle down and get the job done and to keep a positive attitude, no matter what. Which of the following seven key traits of professionalism is Katie demonstrating? A.Demonstrating a sense of etiquette B.Communicating effectively C.Maintaining a confident, positive outlook D.Being dependable and accountable E.Being a team player
maintaining a confident, positive outlook
Thomas is a manager at XYZ, LLC. His responsibilities include collecting, analyzing, and reporting on financial matters, analyzing budgets, and assessing the manufacturing costs of new products. Which of these best describes Thomas' job? A.Operations manger B.Financial manager C.Marketing manager D.Management accountant E.Sales manager
management accountant
staffing
many companies find using combo US and local personnel works best mixing company experience w/local connections w/lifelong knowledge culture can evolve over time as conditions change recent yrs. US and European companies in China filling mid-upper management w/local talent rather than relocating headquarter managers cost of hiring locally often much lower, less risk foreign manager fail adapt to work/live in China some companies exp. failure rates 50% when transferring managers to foreign posts
Foreign direct investment (FDI)
many firms prefer enter international mkts. through partial or whole ownership and control assets in foreign countries * investment of money by foreign companies in domestic business enterprises some facilities set up through FDI to exploit availability of raw materials, other take advantage low wages, others minimize transportation costs choosing locations that give direct access to mkts in other countries. - typically gives companies greater control but carries greater economic/political risk/more complex than other forms of entry in global mktplace. most FDI between industrialized nations w/lg. stable economies i.e. US, Canada, Japan, most Europe - can offer greater protection for foreign investors
3. Which environment is made up of three components; consumers, purchasing influences on consumers, and competitors? A. Technological environment B. Economic environment C. Legal environment D. Market environment Your answer is correct. E. Social environment
market environment
Which function identifies prospects in the marketplace, works with research and development to create products, develops promotion strategies, and establishes prices?
marketing
3. Which term describes an analysis of economic activity among firms, customers, and industries that collectively establish the extent of products and services that are required and distributed at various prices?
microeconomics
31. Which term describes an analysis of economic activity among firms, customers, and industries that collectively establish the extent of products and services that are required and distributed at various prices? A. Pure competition B. Microeconomics Your answer is correct. C. Capitalism D. Privatization E. Macroeconomics
microeconomics
minimalist CSR
minimalist view only social responsibility of business is pay taxes/obey law economist Milton Friedman "only one social responsibility - use its resources.engage in activities to increase profits as long as stay w/in rules of game - engage open/free competition w/o deception or fraud" - view tends to reject stakeholder concept -raises issues: * business that operates legally/ethically provides society w/beneficial goods/servces at fair prices = fulfill society's obligations * (VITAL) should businesses be in business to make social policy/spend public's money? proponents of minimalist view say this is what happens when companies make tax-deductible contributions to social causes - choosing what to support instead of elected representative using the money to control how spent = corps/activists spending public's money w/ no say from public
radical connectivity
name coined by Nicco Mele social media pioneer describes "the breathtaking ability to send vast amounts of data instantly, constantly, and globally"
48.Which of the following business aspects can have potentially negative effects for a society? A. Desire for profit B. Low unemployment C. Employer-paid insurance benefits D. Needing assistance from the government Your answer is correct. E. Using taxes to support national defense
needing assistance from the government
Trend toward sustainability - sustainable development
operating business in a manner that minimizes pollution and resource depletion, ensuring that future generations will have vital resources - efforts to minimize resource depletion and pollution part of broader effort United Nations defined as development that "meets the needs of the present without compromising the ability of future generations to meet their own needs" - idea expands stakeholder concept by including stakeholders from the future not just immediate interest doesn't mean companies take financial hit to go "green" but taking steps now to reduce consumption/pollution end up saving money down road from reducing cleanup - litigation expenses - ongoing production costs Xerox CEO Ursula Burns - "the greener we get, the more we can reduce costs and boost efficiency" ****better stewardship - majority global CEOs view sustainability as a business opportunity viewpoint clearly in lin w/concept of strategic CSR
Which function involves overseeing production activities, arranging to purchase production materials, managing the incoming movement of materials and the outgoing movement of completed products, and everything from planning new buildings to maintaining them?A.Information technology B.Finance C.Research and development D.Marketing E.Operations management
operations management
Which of the following careers involves tasks such as production engineering, assembly, quality assurance, forecasting, logistics, and customer support? A.Operations manager B.Accountant C.Human resources specialist D.Finance manager E.Sales manager
operations manager
durable-goods orders
orders for goods typically last 3+ yrs. (desk chairs - airplanes) rise in durable-goods is positive indicator business spending turning around
The Asia-Pacific Economic Cooperation (APEC)
organization of 21 countries working to liberalize trade in the Pacific Rim (the land areas that surround the Pacific Ocean) member nations 40% of world population w/more than 50% world's gross domestic product (GDP) like other trade blocs, APEC long-term goal liberalizing/simplifying trade/investment among member countries & help region sustain economic growth est. 1989, trade among member nations increased sevenfold
Trading Blocs or common markets p. 58 for countries i.e. NAFTA
organizations of nations that remove barriers to trade among their members and that establish uniform barriers to trade w/ nonmember nations specific rules vary group to group * primary objective ensure economic growth and benefit of members - generally promote trade inside region creating uniform barriers against goods/services entering region from nonmember countries
Foreign Corrupt Practices Act (FCPA)
outlaws payments with the intent of getting govt officials to break the laws of their own countries or to secure "improper advantage" in gaining or retaining sales does allow payments to expedite routine actions: setting up utilities for new facility but US and other govt discourage such payments bans outright cash payments, forbids indirect means of influence - expensive gifts, charitable contributions intended to influence govt officials, travel opps (company hosted training seminars) w/ no legitimate business purpose
World Trade Organization (WTO)
permanent forum for negotiating, implementing, monitoring international trade procedures & mediating trade disputes among its 160 countries. guided by 5 five principles: * preventing discriminatory policies favor some trading partners over others or country's own products over others * reducing trade barriers between countries * making trade policies more predictable/less arbitrary * discouraging unfair practices * promoting economic progress in the world's less developed countries complex and slow i.e. agreement to eliminate agricultural export subsidies govt payments to farmers allowed set artificially low prices on world market took decades argues does not dictate policies to national govts, not ignore special circumstances faced by world's poorest countries, does not ignore health/environmental concerns when mediate commercial disputes complex and slow eliminate agricultural export subsidies govt payments to farmers allowed them set artificially low prices took decades to complete
Employees of Frost, LLC often find themselves volunteering on the weekends for various establishments in the community and attending charity functions on behalf of their company. Which of the following terms best describes this scenario?
philanthropy
Philanthropy vs. Strategic CSR
philanthropy or strategic CSR
Human Resources Specialist
plan/direct personnel-related activities - recruiting, training, development - compensation/benefits, employee and labor relations, health, safety also develop/implement HR systems/practices accomodate firm's strategy and motivate/manage diverse workforces. becoming more than employee records - more strategic focused on global competition find, attract, keep best talent
sanctions
politically motivated embargoes that revoke country's normal trade relations status - often used forceful alternative short of war include- arms embargoes, foreign-assistance reductions and cutoffs, trade limitations, tariff increases, import-quota decreases, visa denials, air-link cancellations, etc.
economies of scale
savings from buying parts and materials, manufacturing, or marketing in large quantities
The Trans-Pacific Partnership (TPP)
potentially major trade agreement involving dozen countries around Pacific Rim. After decade negotiations, may be finalized near future supporters say TPP Vital promoting US economic interest in fast-growing countries, detractors fear undermind US laws giving huge legal power to multinational corps.
antidumping measures
practice of selling large quantities of a product at a price lower than the cost of production or below what the company would charge in its home market -used to win foreign customers or reduce product surpluses if domestic producer can demonstrate low-cost imports damaging business most govt intervene on their behalf through international trade organizations tricky resolution - buyers of dumped product benefit from lower prices proving fair price in country of origin difficult
Ch. 2 Understanding Basic Economics
predicting demand for new product or new business is one of toughest decisions managers/enterpreneurs need to make forecasting product demand accurately requires combination economic data analysis, experience-driven judgment and plain old luck
price controls
price controls can involve maximum allowable prices (such as limited rent increases) and minimum allowable prices (such as supplementing the prices of agricultural goods to ensure producers a minimum level of income or establishing minimum wage levels
15. The government of Zomania recently allowed for-profit businesses to provide services once provided exclusively by the government. This change is referred to as _______. A. socialism B. nationalizing C. privatizing Your answer is correct. D. communism E. regulating
privatizing
_________ computes prices at the wholesaler level, reflecting what companies are paying for the goods they require. A.The equilibrium point B.Macroeconomics C.The producer price index D.Microeconomics E.The consumer price index
producer price index
Research and Development (R & D)
products are conceived/designed through R & D (aka product design/ engineering) functional area responsible for conceiving and designing new products some companies not require R&D b/c resell products others make - provides ideas/designs allow firms meet customer needs in competitive markets
customer support
products i.e. cars, computers require customer support adding layer of complexity to international business many customers reluctant buy foreign product w/o local support i.e. local dealer, man. branch office, 3rd party organization under contract to manufacturer
18. In a business, after all expenses are paid, the leftover money is called ___________. A. liabilities B. accounts receivable C. profit Your answer is correct. D. revenue E. wages
profit
The consideration of nonverbal symbols, local competition, and cultural differences affects which of the following areas in international expansion?
promotion
Competition in free-market system competition
rivalry among businesses for the same customers situation in which two or more suppliers of product rivals in the pursuit of the same customers - varies widely product category, industry, geography
Supply Curve dynamic affected by variety internal/external factors
relationship between prices and quantities that sellers will offer for sale, regardless of demand * a graph of the quantities of a products that sellers will offer for sale, regardless of demand, at various prices shifts to the right -------> - cost of production decreases - competition decreases - technology decreases production costs - taxes and regulatory costs decrease shifts to the left <---------- - cost of production increases - competition increases - technology increases production costs - taxes and regulatory costs increase
economic discrimination
relegated to low-paying, menial jobs and prevented from taking advantage of many opportunities solely on basis of race, gender, disability or religion Civil Rights Act of 1964 est. Equal Employment Opportunity Commission (EEOC) - regulatory agency addresses job discrimination. - responsible monitor hiring practices, investigate complaints of job-related discrimination - has power to file legal charges against companies that discriminate/force them to compensate ind./groups victimized by unfair practices - Civil Rights Act of 1991 amended original act response Supreme Court decisions in intervening quarter-century - among key provisions - limiting amt of damage awards, making it easier to sue for discrimination, giving employees right have trial by jury in discrimination cases, extending protections to overseas employees of US companies
regulation
relying more on laws and policies than on market forces to govern economic activity * argument for more regulation asserts that companies can't be counted on to act in ways protect the stakeholder interests/market not relied on as mechanism to prevent/punish abuses/failures
deregulation
removing regulations to allow the market to prevent excesses and correct itself over time
capital-intensive businesses
require large amounts of money, equipment, land, and other resources to get started and to operate, goods-producing businesses are often capital-intensive businesses.
business model
result of decisions - a clearly stated outline of how the business intends to generate revenue. concise description of how a business intends to generate revenue
10. __________is the money a company generates through the sale of products and services.
revenue
20. ________________ is the money a company generates through the sale of products and services. A. Costs B. Profit C. Accounts payable D. Expenses E. Revenue
revenue
strategic CSR * makes more sense
social contributions that are directly aligned with a company's overall business strategy the company helps itself and society same time such as develop workforce through job training or volunteer programs help train employees i.e. UPS's Community Internship Program - management candidates volunteer in community programs help them understand needs/challenges various population groups while developing essential skills IBM, Microsoft among many who invest in assistive technologies help people w/ disabilities while expanding market opportunities/access employee talent makes more sense: 1- business & society mutually dependent choices weaken one will weaken other, ultimately weaken both 2- investments that benefit company likely sustained over time 3- sizable investments in strategically focused areas yield greater benefits to society than spreading smaller amounts money through general philanthropy
Which term describes individuals who apply entrepreneurial strategies to enable large-scale social change? A.Not-for-profit business owners B.Public entrepreneurs C.Multinational change agents D.Social entrepreneurs E.Private entrepreneurs
social entrepreneurs
Which type of environment involves trends and forces such as changing population trends?
social environment
30. Which of the following has helped shift the power of commerce from the sellers to the buyers? A. Identity theft B. The Consumer Product Safety Commission C. Consumerism D. Social media Your answer is correct. E. Consumer Affairs departments
social media
Which of the following has helped shift the power of commerce from the sellers to the buyers? A.Identity theft B. The Consumer Product Safety Commission C.Consumerism D.Consumer Affairs departments E.Social media
social media
Which of the following is an economic system that involves a good amount of government planning and some government ownership with a focus on industries critical to societal well-being? A. Socialism B.Communism C.Capitalism D.Free-market system E.Oligopoly
socialism
International Franchising
some companies expand into foreign markets by franchising - involves selling the right to use a business system including brand names, business processes, trade secrets & other assets i.e. McDonalds - 18,000+ McDs more than 100 countries outside US - majority run by independent franchises attractive option for many companies b/c reduces costs/risks expanding internationally while leveraging investments in branding and business processes.
bribery
some countries - payments to govt & business officials so commonplace considered standard operating practice w/ some companies fearful can't compete w/o paying bribes used to facilitate actions i.e. - winning contracts for public works projects (roads, power plants) to govt services (customs inspections) or preferential treatment (approval raise prices) **discourages investments in developing countries, undermines democratic processes, weakens trust in govt. raises prices for consumers by inflating business costs, can present security risk by putting officials actions up for highest bid some argue trying to place US values on other cultures, but **Transparency International (watchdog group works to reduce business-govt corruption around the world says "abuse of power for personal gain - siphoning off public/common resources into private pockets unacceptable in ALL cultures/societies"
pricing
standardized strategy adds to cost of business - transportation to communication, customized international strategies add more before moving internationally, businesses need to consider afford costs AND offer competitive prices
economic indicators
statistics that measure the performance of the economy statistics such as interest rates, unemployment rates, housing data and industrial productivity that let business and political leaders measure and monitor economic performance - leading indicators - lagging indicators - housing starts - durable-goods orders
revenue
the money a company brings in through the sale of goods and services
profit
the money left over after expenses
corporate social responsibility (CSR)
the notion that business has obligations to society beyond the pursuit of profits. assumption that CSR both moral imperative for business and good for society - issues not clear
equilbrium point
the point at which quantity supplied equals quantity demanded demand/supply curves intersect - the point demand/supply are equal compromise - where demand and supply curves intersect goals: buyers want to buy lowest price sellers want to sell highest price when prices goes down, quantity demanded increases, quantity supplied may or may not decline
understanding how supply and demand interact the equilibrium point
the point where supply and demand curves for a given good or service intersect
unemployment rate
the portion of the labor force (everyone over 16 who has or is looking for a job) currently without a job indicates the percentage of the labor force currently without employment Types: * frictional - leaves one job before finding another * structual - mismatch between worker's skills current employer needs * cyclical - caused by economic fluctuations - demand for goods/services drops, businesses reduce production, fewer workers required * seasonal - predictable increases/decreases in need for workers in industries w/seasonal fluctuation customer demand
ethics
the principles and standards of moral behavior that are accepted by society as right and wrong. practicing good business ethics involves (minimum) competing fairly/honestly, communicating truthfully, being transparent, not causing harm to others.
disruptive technologies
those that fundamentally change the nature of an industry can be powerful enough to create or destroy entire companies - can shake up multiple industries many used today * one of newest disruptive technologies - mobile connectivity (smartphones, tablets, app software, networking infrastructure that connects all) - employee collaoration systems to banking to retail mobile apps millions w/ mobile device their only way to access Internet globally 80% Internet users access web at least some of the time with mobile device primary communication business tool professionals majority execs under 40 Ranks: email/web browsing first/second mobile plays major/ever-expanding role keeping people connected 24/7
cultural differences
through globalization, cultural differences are experienced what is unethical in one culture could be accepted practice in another managers may need consider - working conditions, minimum wage levels, product safety issues, environmental protection
Merger and Acquisition Approvals
to preserve competition/customer choice govt occasionally prohibit companies from combining through mergers or acquisitions may approve w/conditions such as divesting (selling) some parts of the company or other concessions
balance of trade exports minus imports
total value of the products a nation exports minus the total value of the products it imports, over some period of time the total value of a country's exports minus the total value of its imports over period of time determines its balance of trade
44.A(n) ___________ is a collection of countries that promotes trade among member nations. A. trading bloc Your answer is correct. B. Organization for Economic Co-operation and Development C. embargo D. International Monetary Fund E. World Trade Organization
trading bloc
Why Nations Trade
volume of international business tripled last 30 years one result is economic globalization
foreign exchange
when companies buy/sell goods/services in global marketplace, complete transaction by exchanging currencies. the conversion of one currency into an equivalent amount of another currency
trade deficit
when country imports more than it exports an unfavorable trade balance created when a country imports more than it exports
means of protectionism tarriffs, import quotas, embargoes, restrictive import standards, export subsidies, antidumping measures, sanctions
when govt believes free trade not in best interest of its national security, domestic industries, workforce or consumers can intervene in these methods: may help short-term - but many measures hurt groups intended to help when industry isolated from real-life competition too long can fail to develop & become strong enough compete efficiently root cause of trade conflict is every country has natural interest to protect own security and support own industies, workers, consumers resulting in countries deviate from free trade intervening in means of protectionism
ethical decision making
when right/wrong clear, ethical decisions easy but implementing may be difficult choose wrong commit ethical lapse if choices not clear, face ethical dilemma -
19. Kim is an employee at XYZ Corporation. She recently witnessed illegal activity at her company. She asked a co-worker whether he had noticed anything suspicious. He informed Kim that the last person who questioned such dealings within the company was fired immediately. So instead of going to management with her concerns, Kim decided to report the illegal activities to the authorities. Which of the following describes Kim's actions? A. Whistle-blowing Your answer is correct. B. Ethical lapse C. Conflict of interest D. Insider trading E. Affirmative action
whistle-blowing
4. ________occur(s) when an employee witnesses illegal or unethical actions within the company and chooses to reveal the evidence through formal means such as the media or the authorities.
whistle-blowing
