MCE test 1
franchisor
a company that develops a product concepts and sells others the rights to make and sell the products
accounting
keeping records, sales, tax planning, financial forecasting
monopolisitc competition
large number of sellers produce very similar products that buyers perceive as different (burger king, mcdonalds, wendys)
corporation
legal entity that is separate and distinct from its owners
partnership
legal form of business with two or more owners
limited liability company (LLC)
like an s corp, but without special eligibility requirements
PPI (producer price index)
looks at wholesale prices for things that will eventually be sold
stakeholders
managers are accountable to stakeholders because they are the "Face" of the organization
operations
manufacturing plan, supply chain consideration
perfect competition
many sellers but none is large enough to dictate the price of a product
free market economies
market largely determines what goods and services get produced
cost of goods sold
measure of the cost of merchandise sold or cost of resources used for producing items
productivity
measures effectiveness and efficiency, amount of output generated given amount of input
effective
meeting the objective
planning
need a mission, vision, and value for a business
financing
need money to start a business
cyclical unemployment
occurs when there is a downfall in the economy
profit
the amount of money earned above and beyond what it spends
equilibrium point
the price determined by supply and demand (market price)
management
the process of getting things done effectively and efficiently through people
supply
the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time
demand
the quantity of products that people are willing to buy at different prices at a specific time
accountability
the requirement of one person to answer to a higher authority
revenue
total amount of money a business takes in during a given period by selling goods or services
gross domestic product
total value of final goods and services produced in a country in a given year
recession
two or more consecutive quarters of decline in GDP
efficient
using the smallest amount of resources
merger
vertical: joining of two companies involved in different stages of related business conglomerate: joining of firms in unrelated industries horizontal: joining of two firms in related industry
upside down pyramid
view of organization that puts consumers at the top and positions of upper levels as supporters of lower management
recovery
when economy stabilized and starts to grow, eventually leading to economic boom
referent power
when people idolize individuals so they trust them
structural unemployment
workers skills don't match the jobs that are open
globalization
world trade- has had significant growth due to technological advancement
free-market capitalism
all or most factors of production and distribution are privately owned and operated for profit
business
an activity that seeks to provide goods and services to others while operating at a profit
non profit
an organization whose goals do not include making a personal profit for its owners or organizers
CPI (Consumer Price Index)
cost of thing to the consumer
operating costs
costs involved with operating the organization
Crowd funding
donation based or lending
communism
economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production
frictional unemployment
expected, exists naturally when people leave a job or time between graduation to starting a job
inflation
A general and progressive increase in prices
socialism
An economic system based on the premise that some, if not most basic businesses should be owned by the government so that profits can be distributed among people
resource development
How to increase resources and to create conditions that will make better use of those resources
four functions
Plan: establish goals, objectives organize: create shape for organization lead: getting people enthused, excited, inspired control: measuring work performance
state capitalism
System in which companies are privately run, but work closely with the government in forming laws and regulations
loss
When a business expenses are more than its revenues
organization
a deliberate arrangement of people brought together to accomplish a specific purpose
Entrepreneur
a person or team that risks time and money to start and manage a business
manager
a person that uses influence to set and achieve goals
disinflation
a reduction in the rate of inflation
C corporation
a state chartered legal entity with authority to act and have liability separate from its owners
S corporation
a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
coercive power
ability to harm, penalize, or punish someone
limited partnership/partner
an owner who invests money in the business but does not have managing responsibilities or liability for losses beyond investment
general partnership/ partner
an owner/partner who has unlimited liability and is active in managing the firm
stakeholders
any constituencies in an organization's environment that are affected by that organizations decisions and actions
Franchise agreement
arrangement where someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory
legitimate power
associated with having status or formal job authority
microeconomics
behavior of people and organizations in particular markets (cost/benefit calculations, purchasing decisions)
human resources
deciding labor needs, recruiting right people, training and development for growth
economic boom
business is booming
cooperative (co-op)
business owned and controlled by the people who use it (employees, consumers, producers)
pure risk
can only result in a loss, no chance of profit (threat of fire, theft, accident)
speculative risk
can result in either a profit or loss (buying new machinery, acquiring more inventory)
three skills
conceptual: analytical skills Human: being able to read situations, manage relationships technical: perform tasks proficiently, do your job
social power- positional
derived from the formal roles you hold in an organization, a social system, or society
social power- personal
derived from your unique personal attributes and skills that lead others to respect, idolize, adore and trust you
oligopoly
few sellers dominate the market (car companies, gaming systems)
levels of management
frontline managers, middle managers, top managers
command economies
government largely determines what goods and services get produced, and who gets them and how the economy grows
price indexes
help gauge the health of the economy by measuring levels of inflation, disinflation, deflation, and stagflation
Flow through entity
income is passed straight to shareholders or owners
venture capitalists
individuals or companies that invest in new business in exchange for partial ownership of those businesses
expert power
influence others by possessing knowledge or skills that they value
three roles
informational: collecting info, analyzing interpersonal: dealing with other people decisional: make decisions and be able to weight the risk
productivity
input in a given amount of time
acquisition
one company's purchase of another company
monopoly
one seller controls the total supply of a product or service (they determine price)
Macroeconomics
operation of a nation's economy as a whole (GDP, unemployment rate, price indexes)
sole proprietorship
owned and usually managed by one person, owner manages all areas of the business
consumer market
people with unsatisfied wants and needs who have both resources and willingness to buy
unemployment rate
percentage of civilians at least 16 who are unemployed and tried to actively find a job in the last 4 weeks
franchisee
person who buys a franchise
deflation
prices are dropping
stagflation
prices are going up more drastically
Angels
private individuals who invest their own money in potentially hot new companies before they go public
limited liability
responsibility of a business's owners for losses only up to the amount they invest
unlimited liability
responsibility of business owners for all debts of the business
seasonal unemployment
results because of different needs in different seaons
franchise
right to use a specific business's name and sell its products or services in a given territory
depression
severe recession, usually accompanied by deflation
SBA
small business administration: agency that advices and assists small businesses
mixed economies
some decisions are made by the market and some are made by the government
reward power
someone controls something that you want
Demography
statistical study of human population with regard to its size, density, and other characteristics such as age, gender, and income
economics
study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals