BA 101 Midterm #3

countries in NAFTA (North American Free Trade Agreement)

USA, Canada, Mexico

keep: maintain current customers

customers are your best source of new ideas, referrals, and revenue

organizations culture

de-emphasizes ethics and considers primarily economic consequences

decision making process

define, describe, develop, decide, do, and determine outcome

licensing benefits

gaining revenue, spending little or no money to product/market ie.) paw patrol Kraft dinner, Nestle-Starbucks coffee

patent

gives inventors exclusive rights to their inventions

contract manufacturing (outsourcing) benefits

- can allow a firm to experiment in a new market without heavy start-up costs - temporarily meet an unexpected increase in orders

Dodd-Frank Act

- comprehensive regulation of financial markets - consolidation of regulatory agencies - consumer protection reforms - tightened regulation of Credit Rating Agencies

cons of free trade

1) domestic workers (esps manufacturing based jobs) can lose their jobs due to increased imports/productions shifts to low-wage global markets 2) workers may be forced to accept pay cuts and threats of moving jobs to lower-cost global markets 3) moving operations overseas because of intense competitive pressure often means loss of service jobs / growing numbers of white-collar jobs 4) domestic companies can lose their comparative advantage when competitors build advanced production operations in low-wage countries

strategies for reaching global markets, in order of risk (least to most)

1- licensing 2- exporting 3- franchising 4- contract manufacturing 5- foreign direct investment

anticompetitive behavior

actions aimed at harming actual or potential competitors

arbitration

binding and non-binding dispute resolution. 3rd party makes final decision

mutually beneficial exchange

countries with abundant nature resources need access to foreign markets or technological resources from other countries

integrity based ethic codes

defines the organizations guiding values, creates an environment that supports ethically sound behavior, and promotes shared accountability

environmental degradation

directly or indirectly take actions that result in environmental harm

criminal law

dispute between the government and individual (fines or imprisonment

Organization for Economic Cooperation and Development (OECD) & Transparency International

fight to end corruption and bribery in foreign markets and have had limited success

fraud triangle: perceived pressure

financial pressure / personal pressure

subsidies

government payment to a domestic producer - helps DPs compete against low-cost foreign goods

grow: sell more to your customer base

it is less expensive to sell more to existing customers than to find new customers

common law

judges establish when deciding disputes

What is the branch of government chosen to oversee the legal system through the court system?

judiciary

private enterprise

market turns self-interest into social good

technical skills

skills that involve the ability to perform tasks in a specific discipline or department

7 instruments of trade policy

tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administrative policies, and antidumping duties

tariffs

tax levied on imports, raising the cost of imported products relative to domestic products

What is the purpose of the Uniform Commercial Code (UCC)?

to standardize commercial law and facilitate commercial transactions

balance of trade

total value of a nation's exports compared to its imports measured over a particular period

balance of trade

total value of a nations exports compared to imports over a particular period

opportunistic exploitation

unethical behavior sometimes used by managers to unilaterally rewrite the terms of a contract with suppliers, buyers, or complement providers in a way that favors to the firm

licensing

when a firm (licensor) provides the right to manufacture its product or use its trademark to a foreign company (licensee) for a fee (royalty

trade deficit (unfavorable)

when the value of country's exports is less than that of its imports

trade surplus (favorable)

when the value of the country's exports is more than that of its imports

fraud

where someone hurts another by deception or manipulation, said or done in a dishonest way to trick people

personal ethics

will have a profound influence on behavior as a businessperson

2.) customer segments

your customers do not exist to buy... you exist for them geographical, social, demographic, etc who are they, and why would they buy?

Freeman Stakeholder Theory

** corporations are no longer simply 'profit-machines' ** cannot be thought of as being responsible to only one group, but must be seen to bear responsibilities to all of the individuals their activities affect, and upon whom their existence depends.

fraud triangle: rationalization

- 'i'll pay it back" - "i deserve a pay raise" - "it's for a good purpose"

What two questions do entrepreneurs often ask themselves?

- What really irritates me, and what product or service would help? - What do I want, but can never find?

examples of torts

- assault - slander - libel - product liability - fraud

a person can legally protect their ideas by obtaining...

- copyright - patent - trademark

environmental forces

- developing countries have transportation and storage systems that make international distribution difficult or impossible. - often, technological capabilities are far from those in the US. which makes for a tough business environment.

as a manager, you shape the organization and the world your employees inhabit through...

- employment agreement - structure of the job (task) - interpersonal interaction

ethics in global business

- employment practices - human rights - environmental regulations - corruption

government intervention

- ensures fair competition, private property, freedom of choice, and right to keep profits - promotes economic health & social responsibility - corrects market failures & ethical lapses

what are the functions of export assistance centers? (EAC's)

- hands-on exporting assistance - trade-finance support

5.) revenue model

- how does the company make money from each customer segment? - what value is the customer paying for? - revenue models (direct sales) are the strategy, pricing is the tactics

why globalization?

- increase revenue - access different markets - reduce costs - access different materials

3 major factors of Corporate Social Responsibility

- maximize positive societal impact - minimize negative societal impact - act in the company's best interest for profit

control (in management)

- measures performance relative to the planned objectives and standards -rewards people for work well done - takes corrective action when needed.

legal and regulatory forces

- no global/international system of laws - laws may be inconsistent from country to country - US firms must follow US laws when conducting global business

What two advantages do small businesses have over larger companies?

- personalized customer service - quick response time to new opportunities

problems with business

- power of business vs consumer - actions of business vs consumer - public reaction - governments reaction

requirements of private enterprise

- private property - freedom of choice - right to keep profits - fair competition

business model thinking

- product development to startup ventures language for communicating - understand the startup process - positioning for launch and growth

What two items are described in a business plan?

- resources and qualifications of its owner(s) - the target market

global trade with 7.7 billion potential customers is attractive, but the threats to trading globally include which of the following?

- rogue states - terrorism - income inequality - nuclear proliferation

joint venture benefits

- shared technology - shared risk - shared marketing

forces affecting trade in global markets

- sociocultural forces - economic and financial forces - legal and regulatory forces - physical and environmental forces

intentional tort

- the required intent is the desire to cause harm - include acts that harm property or other persons

basic rights of consumers

- the right to safety - the right to be informed - the right to choose - the right to be heard

ethical dilemmas occur when...

- there is no agreement over what the accepted principles - none of the available alternatives seem ethically acceptable

Causes of small business failure

- underpricing or overpricing goods or services - starting with too little capital - going into business without first learning something about the industry / market - underestimating how much time it will take to build a market.

fraud triangle: perceived opportunity

- weak internal controls - ineffective monitoring of controls - assets susceptible to fraud

Small business

-independently owned and operated -not dominant in its field - meets certain standards of size in terms of employees or receipts

CRM (Customer Relationship Management)

-acquire new customers -retain existing customers -upsell to existing customers

Business incubators

-centers that offer new businesses in the critical stage of early development -low-cost offices with basic services such as accounting, legal advice, and secretarial help

Intrapreneur

-creative person who works within a corporation - uses company's resources to launch new products -generates profits by leveraging a firm's human, financial , and physical resources.

knowledge managers

-keep information in a readily accessible place -find the right information - make information known to everyone in the organization

3 levels of ethical standards

1.) the law 2.) organizational policies and procedures 3.) the moral stance employees take when faced with decisions not governed by formal rules

CEO

Introduces change into an organization

the Friedman doctrine

Milton Friedman's position that the only social responsibility of business is to increase profits ** as long as the company stays within the law and the rule s of the game without deception or fraud **

passed in 1890 to stop large organizations from stifling competition

Sherman Antitrust Act

example of foreign subsidiary

a company in another country that is owned by a U.S. company

patent trolls

a company or person that acquires a lot of the patents without the desire to actually develop the products

foreign subsidiary

a company owned in a foreign country by another company, called the parent company

franchising

a contractual agreement where someone with a good idea for a business sells the rights to use the business name and sell a product / service in a specific territory franchisors need to carefully adapt product to countries

absolute advantage

a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries

comparative advantage

a country should sell the products it produces most efficiently and buy from other countries the products it cannot produce as efficiently

import quotas

a direct restriction on the quantity of a good that can be imported into a country

contract manufacturing (outsourcing)

a foreign company produces private-label goods to which a domestic company then attaches its own brand name / trademark

joint venture

a partnership in which two or more companies, often from different countries, join to undertake a major project

common market (trading bloc)

a regional group of countries that have a common external tariff and no internal tariffs coordinate laws to facilitate exchange

The Environmental Protection Agency (EPA) was created by Congress and has the authority to create rules and regulations regarding the environment. The EPA is an example of a ...

administrative agency

traits of a good boss

allows independence, acknowledges others' actions, set standards for staff and self, walk the talk, is trustworthy, timely feedback, shows respect

organizational ethics

begins at the top; managers can help instill corporate values in employees trust between workers/managers must be based on fairness, honesty, openness, and moral integrity

judiciary

branch of government which settles disputes through the application of law

which behaviors are illegal in the US, but potentially put companies at a disadvantage overseas?

bribery & influence peddling

strategic planning

broad, long-range goals set by top managers

ethics

business ethics are the accepted principles of right or wrong governing the conduct of busied people

importing

buying products from another country

COO

chief operating officer. Implements CEO's changes

human relations skills

communication and motivation; enable managers to work with people

uniform commercial code

comprehensive commercial law that covers sales laws and other commercial laws

what is a business model?

describes the rationale of how an organization... - creates - delivers - captures value

civil law

dispute between two individuals (fines)

trial courts

dispute is first heard

information manipulation

distort or hide information to enhance their personal situation

low value of the dollar

dollar is trading for less foreign currency; foreign goods are more expensive

high value of the dollar

dollar is trading for more foreign currency; foreign goods are less expensive

compliance based ethic codes

emphasize preventing unlawful/unethical behavior by increasing control and penalizing wrong-doers

statutory law

enacted by a federal or state legislature

unrealistic performance goals

encouraging and legitimizing unethical behavior

external customers

end users and dealers

A(n) ______ team is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.

entrepreneurial

Sarbanes-Oxley Act of 2002

establishes new or enhanced standards for all US public company boards, management, and public accounting firms

administrative agencies

federal or state institutions and other government organizations created by congress / state legislatures with delegated power to create rules and regulations within their area of authority

negotiable instruments

forms of commercial paper that are transferable among businesses and individuals and represent a promise to pay a specified amount

deregulation

government withdrawal of certain laws and regulations that seem to hinder competition

warranty

guarantees that the product sold will be acceptable for the purpose for which the buyer intends to use it

staffing

hiring, motivating, and retaining the best people available to accomplish the company's objectives

What is product liability?

holds businesses liable for harm that results from the production, design, or inadequate warnings of products they market

4. customer relationships

how does a company get, keep, and grow customers? just like channels, these are different ways to market and interact with consumers in order to build up rapport

3. channels

how does the product get from our company to the customer? speech, web/mobile channels, signage, vending machines, etc.

Customer Acquisition Costs (CAC)

how much does it cost to get a customer? what percent close on that sale? (sales funnel) (1000 leads, 100 prospects, 10 customers)

tactical planning

identification of specific, short-term goals set by lower-level managers

A favorable balance of trade occurs when...

imports are less than the value of exports

whistleblowers

insiders who report illegal or unethical behavior

globalization

integration and free movement of people, goods, services, and capital across national borders

1.) value propositions

it's not about your idea or product, it's about solving a need or problem and satisfying a customer's need

bankruptcy

legal process by which a person, business, or government entity, unable to meet financial obligations, is relieved of those debts by a court

CIO

makes decisions requiring IT equipment and/or creation of new IT systems

autocratic leadership

making managerial decisions without consulting others

self-dealing

managers weather their nest with corporate money

______ want to maintain a balanced life style while doing the kind of work they want to do.

micro-preneurs

free trade

movement of goods and services among nations without political or economic barriers

mediation

non binding, 3rd party just there to bounce off of

CFO

obtains funds, plans budgets, collects money

strategic alliances

partnerships in which two or more companies combine resources and capital to create competitive advantages in a new market

Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

passed in order to reduce the total number of bankruptcy filings and eliminate the perceived ease of filing for bankruptcy

Dodd-Frank Wall Street Reform and Consumer Protection Act

passed in response to the financial crisis of 2008- the most significant changes to financial regulation of the US since the Great Depression

document that gives inventors exclusive rights to their inventions for 20 years

patent

SWOT analysis

planning tool which aims to define strengths, weaknesses, opportunities, threats

P.O.L.C

planning, organizing, leading, and controlling (process used to accomplish organizational goals)

top management

president, vice president, CEO, CFO, COO

outsourcing

process by which a firm contracts with other companies to do some or all of its functions.

the part of tort law that holds businesses liable for harm that results from the production, design, or use of products they market is called...

product liability

copyrights

protects a creator's rights to materials such as books, articles, cartoons, and paintings

trademark

protects name, symbol, or design

value proposition development

question assumptions, get out of the building (talk to potential customers), and iterate through learning (try try again!)

administrative law

regulations passed by state and federal administrative agencies

what most influences a company's effectiveness and financial performance most?

responsible management of human resources

Principle characteristic of an entrepreneur

self-discipline

dumping

selling goods in a foreign market below the cost of production or selling goods in a foreign market below their fair market value, a method to unload excess production predatory behavior- provide from home markets to subsidize prices in a foreign market

exporting

selling products to another country

sociocultural forces

set of values, beliefs, rules, and institutions held by a specific group of people includes: social structures, religion, manners, customs, manners, customs, values/attitudes, language, and personal communication

operational planning

setting work standards and schedules needed to implement the company's tactical objectives

consumerism

social movement that seeks to increase and strengthen the rights and powers of buyers in relation to sellers

What type of law is referred to as a written law?

statutory law

social audit

systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs

a major advantage of licensing is...

the bulk of the revenues gained by licensing come back to the licenser

foreign direct investment (FDI)

the buying of permanent property and businesses in foreign nations

corporate social responsibility

the concern businesses have for the welfare of society, not just its owners

corporate policy

the dimension of social responsibility that refers to a position a firm takes or statement it makes on social and political issues

appellate court

the dispute can be heard again if lower court errors

bad apple theory

the notion that blame for unethical behavior rests with a few unsavory individuals

contigency planning

the process of preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives

trade protectionism

the use of government regulations to limit the import of goods and services

True or false: The principles of management are similar for a small neighborhood business and a giant global firm.

true

substandard working conditions

underinvest in working conditions or pay below market wages

exchange rates

value of one nation's currency relative to currencies of other countries

What term is given to individuals or companies that invest in new businesses in exchange for partial ownership in those businesses?

venture capitalists

traits of a bad boss

weak, political, micromanager, invisible, task master

6.) key resources

what are the most important assets required to make the business model work? - finance (raising money, line of credit) - physical (manufacturing, machines, vehicles) - intellectual (patents, customer lists, people) - human (software engineering)

9.) cost structure

what are the most important costs to operate the business model? - fixed or variable? - economies of scale? - what are the most important costs? - what are the most expensive resources? - what key activities are the most expensive?

8.) key activities

what are the most important things the company must do to make the business model work? - production - problem-solving (consulting, engineering) - supply chain management

7.) key partnerships

whom are the key partners and suppliers needed to make the business model work? - what key resources are we getting from them? - what key activities do they perform - strategic alliances between non-competitors