Contemporary Business Chapter 1

private property

Namesh recently sold his Ford Taurus to a personal friend. Namesh's sale of his automobile illustrates the right to _____.

True

Not-for-profit organizations are commonly exempt from federal, state, and local taxes.

human resources

A company that values employees as sources of ideas and innovation is utilizing its _____.

False

The current philosophy among managers today is best described as transaction management.

True

When government sets ground rules for competitive activity, the intent is to reduce "cutthroat" competition.

Labor union

Which of the following is a public sector, not-for-profit organization?

The right to private property

Which of the following is considered to be the most fundamental right of the private enterprise system?

Businesses are nonprofit organizations that provide services to the public.

Which of the following statements is NOT true regarding businesses?

competition

a natural force that guides free market capitalism.

critical thinking

ability to analyze and assess information to pinpoint problems or opportunities.

business

all profit-seeking activities and enterprises that provide goods and services necessary to an economic system.

diversity

blending individuals of different genders, ethnic backgrounds, cultures, religions, ages and physical and mental abilities.

transaction management

building and promoting products in the hope that enough customers will buy them to cover costs and earn profits

social era

business era in which companies seek ways to connect and interact with customers using technology.

relationship era

business era in which firms seek ways to actively nurture customer loyalty by carefully managing every interaction

consumer orientation

business philosophy that focuses first on determining unmet consumer wants and needsand then designing products to satisfy those needs.

not-for-profit organizations

businesslike establishments that have primary objectives other than returning profits to their owners

creativity

capacity to develop novel solutions to perceived organizational problems.

relationship management

collection of activities that build and maintain ongoing, mutually beneficial ties with customers and other parties.

Private enterprise system

economic system that rewards companies for their ability to identify and serve the needs and demands of customers.

capitalism

economic system that rewards companies for their ability to perceive and serve the needs and demands of consumers; also called the private enterprise system.

crowd sourcing

enlisting the collective talent of a number of people to get work done.

factors of production

four basic inputs: land, labor, capital and entrepreneurship.

labor

includes anyone who works, including both the physical labor and the intellectual inputs contributed by workers.

capital

includes technology, tools, information, and physical facilities.

land

is used in the production of a good, and includes all production inputs or natural resources that are useful in their natural states such as oil, gas, minerals, and timber.

private property

most basic freedom under the private enterprise system; the right to own, use, buy, sell, and bequeath land, buildings, machinery, equipment, patents, individual possessions, and various intangible kinds of property

brand

name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors' offerings

nearshoring

outsourcing production or services to locations near a company's home base or closer to customers.

branding

process of creating an identity in consumers' minds for a good service, or company; a major marketing tool in contemporary business.

offshoring

relocation of business processes, both production (manufacturing) and services (accounting), to lower-cost locations over seas.

profits

rewards earned by business people who take the risks involved in blending people, technology, and information to create and market want-satisfying goods and services.

competitive differentiation

unique combination of organizational abilities, products, and approaches that sets a company apart from competitors in the minds of customers

outsourcing

using outside vendors-contracting work out to another party-for the production of goods or fulfillment of services and functions previously performed in house.

Entrepreneurship

willingness to take risks to create and operate a business

True

Managers are beginning to recognize the different needs of workers of different ages.

False

When farmers rent land in order to increase crop production, they are acquiring capital.