BUS 100H Exam 1

Monopoly

*A single producer that dominates the whole industry *Most are illegal

Active vs. Passive Voice

*Active: Subject of your sentence is doing the action *Passive: subject of the sentence is not doing the action

Stakeholders

*Any groups that have a stake or personal interest in the success of an organization

Communism

*Economic and political system that calls for public ownership of virtually all enterprises under the direction of a strong central gov't *Outlined by Karl Marx and designed to enrich the lives of the working class at the expense of the rich

Socialism

*Economic system based on the principle that the gov't should own and operate key enterprises that directly affect public welfare like utilities, telecommunications, and healthcare *Higher taxes

Sarbanes-Oxley Act

*Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms *Limits conflict of interest issues by restricting the consulting services that accounting firms can provide for the companies they audit *Also requires that financial officers and CEOs to to personally certify the validity of their financial statements

Unemployment Rate

*Includes everyone 16+ who is looking for work

Monopolistic Competition

*Many competitors selling differentiated products *Producers have some control over prices depending on the value they bring to the customer *New producers can enter relatively easy, and new products normally attract suppliers pretty quickly *Ex. Clothing, restaurants

Pure Competition

*Many competitors selling virtually identical products *No single producer has control over the price because there is no distinction between products. *Easy to enter and leave this market *Ex. Corn

Consumer Price Index (CPI)

*Measures the change in weighted-average price over time in a consumer "market-basket" of goods and services that the average person buys each month *Includes groceries, housing, haircuts, transportation etc.

GDP (Gross Domestic Product)

*Measures the total value of all final goods and services produced within a country's physical borders over a given period of time, adjusted for inflation. *Nominal GDP does not include inflation

Oligopoly

*Only a handful of competitors selling selling products that can be similar or different *Hard to break into the market because of big up front costs *Typically avoids intense price competition because it only harms everyone *Ex. Gasoline stations, car companies, soft drinks, computers, network TV

Whistle-Blowers

*People who report illegal or unethical behavior *Protected by Sarbanes-Oxley (SOX) Act

Communication Barriers

*Physical: temperature, hard to read documents *Language: Slang, jargon, accents, different languages *Body Language *Perceptual: how your audience perceives you *Organizational: "people at the top of a company don't talk to those at the bottom" *Cultural

Active listening

*Strong listening skills *Hourly employees spend 30% of their time listening, while upper level employees might spend 60%, and executives more around 75%

Supply vs Demand Curve

*Supply has an actual curve, demand is just a diagonal line *Price on vertical/y-axis, quantity on horizontal/x-axis

Marketing Era

After World War II, the balance of power shifted away from producers and toward consumers, flooding the market with enticing choices. To differentiate themselves from their competitors, businesses began to develop brands, or distinctive identities, to help consumers understand the differences among various products. The marketing concept emerged: a consumer focus that permeates successful companies in every department, at every level. This approach continues to influence business decisions today as global competition heats up to unprecedented levels

Capitalism

An economic system, also known as private enterprise or free market system, based on private ownership, economic freedom, and fair competition

Noise

Any interference that causes the message you send to be different from the message your audience receives

Non-Profit

Business-like establishments that want to improve society by focusing on areas such as health, religion, art, education, human services, and culture, but do not focus on making profit

Planned Obsolescence

Deliberately designing products to fail in order to shorten the consumer time between repurchases

Types of Business Environments (5)

Economic Social Global Technological Competitive

Entrepreneurship

Entrepreneurs are people who take the risk of launching and operating their own businesses, largely in response to the profit incentive. They tend to see opportunities where others don't, and they use their own resources to capitalize on that potential. Entrepreneurial enterprises can kick-start an economy, creating a tidal wave of opportunity by harnessing the other factors of production. But entrepreneurs don't thrive in an environment that doesn't support them. The key ingredient is economic freedom: freedom of choice (whom to hire, for instance, or what to produce), freedom from excess regulation, and freedom from too much taxation. Protection from corruption and unfair competition is another entrepreneurial "must."

Microeconomics

Focuses on smaller economic units such as individual consumers, families, and individual businesses.

Production Era

In the early part of the 1900s, major businesses focused on further refining the production process and creating greater efficiencies. Jobs became even more specialized, increasing productivity and lowering costs and prices. In 1913, Henry Ford introduced the assembly line, which quickly became standard across major manufacturing industries. With managers focused on efficiency, the customer was an afterthought. But when customers tightened their belts during the Great Depression and World War II, businesses took notice. The "hard sell" emerged: aggressive persuasion designed to separate consumers from their cash.

Entrepreneurship Era

Large-scale entrepreneurs emerged in the second half of the 1800s, building business empires. These industrial titans created enormous wealth, raising the overall standard of living across the country. But many also dominated their markets, forcing out competitors, manipulating prices, exploiting workers, and decimating the environment. Toward the end of the 1800s, the government stepped into the business realm, passing laws to regulate business and protect consumers and workers, creating more balance in the economy.

Legal-Ethical Matrix

Legal vs. Illegal and Unethical vs. Ethical (in any combination of 2)

Factors of production (4)

Natural Resources Capital Human Resources Entrepreneurship

Monetary Policy

Refers to actions that shape the economy by influencing interest rates and the supply of money. The Federal Reserve manages U.S. monetary policy.

Fiscal policy

Refers to government efforts to influence the economy through taxation and spending decisions that are designed to encourage growth, boost employment, and curb inflation.

Ethics

Sets of beliefs about right and wrong, good and bad

Industrial Revolution Era

Technological advances fueled a period of rapid industrialization in America from the mid-1700s to the mid-1800s. As mass production took hold, huge factories replaced skilled artisan workshops. The factories hired large numbers of semiskilled workers who specialized in a limited number of tasks. The result was unprecedented production efficiency but also a loss of individual ownership and personal pride in the production process.

Relationship Era

The Relationship Era: Building on the marketing concept, today, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term relationships. Satisfied customers can become advocates for a business, spreading the word with more speed and credibility than even the best promotional campaign. And cultivating current customers is more profitable than constantly seeking new ones. One key tool is technology. Using the Web and other digital resources, businesses gather detailed information about their customers and use these data to serve them better, "bringing a level of customer centricity that we've never seen before."

Macroeconomics

The study of a country's overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies.

Human Resources

This factor encompasses the physical, intellectual, and creative contributions of everyone who works within an economy. As technology replaces a growing number of manual labor jobs, education and motivation have become increasingly important to human resource development. Given the importance of knowledge to workforce effectiveness, some business experts, such as management guru Peter Drucker, break out knowledge as its own category, separate from human resources.

Natural Resources

This factor includes all inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. Most natural resources must be extracted, purified, or harnessed; people cannot actually create them. (Note that agricultural products, which people do create through planting and tending, are not a natural resource.) The value of all natural resources tends to rise with high demand, low supply, or both.

Capital

This factor includes machines, tools, buildings, information, and technology—the synthetic resources that a business needs to produce goods or services. Computers and telecommunications capability have become pivotal elements of capital across a surprising range of industries, from financial services to professional sports. You may be surprised to learn that in this context, capital does not include money, but, clearly, businesses use money to acquire, maintain, and upgrade their capital.