BUS 101 Ch. 1-5

corporate responsibility

business contributions to the community through the actions of the business itself rather than donations of money and time

e-commerce

business transactions conducted online, typically via the Internet

non-profits

business- like establishments that employ people and produce goods and services

foreign outsourcing

contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production

sociocultural differences

differences among cultures in language, attitudes, and values

sustainable development

doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs

whistle blowers

employees who report unethical or illegal actions of their employers to either the authorities or the media

Universal ethical standards

ethical norms that apply to people across a broad spectrum of situations

Factors of Production

four fundamental resources- natural resources, capital, Human Resources, entrepreneurship- to achieve their objectives

countertrade

international trade that involves the barter of products for products rather than for currency

cause related marketing

marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit

Gross Domestic Product (GDP)

measures the total value of all final goods and services produced within a nation's physical boundaries over a given period of time, adjusted for inflation

protectionism

national policies designed to restrict international trade, usually with the goal of protecting domestic businesses

communication barriers

obstacles to effective communication, typically defined in terms of physical, language, body language, cultural, perceptual, and organizational barriers

Business Cycles

periodic contraction and expansion that occur over time in virtually every economy Contraction: a period of economic downturn, marked by rising unemployment and falling business production Recession: an economic downturn marked by a decrease in the GDP for 2 consecutive quarters

active voice

sentence construction in which the subject performs the action expressed by the verb

balance of trade

the difference between a country's total exports and total imports

social responsibility

the obligation of a business to contribute to society

Standard of living

the quality and quantity of goods and services available to a population

Business environment

the setting in which business operates. The five key components are economic environment, competitive environment, technological environment, social environment, and global environment

North American Free Trade Agreement (NAFTA)

the treaty among the US, Mexico, and Canada that eliminated trade barriers and investment restrictions over a 15-year period starting in 1994

free trade

the unrestricted movement of goods and services across international borders

European Union (EU)

the world's largest common market, composed of 28 European nations

trade surplus

total value of exports is higher than the total value of imports

trade deficit

total value of imports is higher than the total value of exports

dynamic delivery

vibrant, compelling presentation delivery style that grabs and holds the attention of the audience

direct investment

when firms either acquire foreign firms or develop new facilities from the ground up in foreign countries

joint ventures

when two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities

How do companies evaluate their efforts to be socially responsible?

1. Firms are monitoring themselves -Social audit -Success is evaluated using a double bottom line→ one accounts for traditional financial indicators and other accounts for social-responibility indicators 2. Companies are motivated to self-regulate because of -groups such as activist customers, investors, unions, environmentalists, and community groups -The threat of government legislation

Consumerism

A social movement that focuses on four key consumer rights: (1) the right to be safe (2) the right to be informed (3) the right to choose (4) the right to be heard.

Why do nations trade?

Access to factors of production Reduced risk→ diversifying allows spreading of businesses Inflow of innovation

How do you choose the right words for effective communication?

Analyze the audience Be concise Avoid slang and bias Use the Active Voice whenever possible

How do we measure trade?

Balance of trade Balance of payments Exchange rates Countertrade

What is the role of non-profits in the economy?

Contribute to society, not in the business financial gain, improve quality of life in our society

How are business trends impacting careers?

Diversity trends would mean that there would be accomodations to each kind of person. Aging population affects retirement and mentoring. Rising worker expectations for hours, environment. Ethics and social responsibility. Different expectations such as younger people wanting to work at home and older people wanting to work at the workplace.

What are the elements of the environment affecting business?

Economic environment, technological environment, competitive environment, social environment, global environment

How does ethics relate to the individual and the organization?

Ethics and the individual -Influenced by personal needs, family, culture, religion, and personality traits -People with a lot of empathy exhibit high levels of ethical leadership Ethics and organization -Organizations influence the ethical conduct of employees

What tools are used to evaluate economic performance?

Gross domestic product (GDP) Employment level Business cycle Price levels Productivity

What are the core factors of production?

Natural resources, capital, human resources, entrepreneurship (business needs these to achieve their objective)

What is the role of business in economy?

Provides jobs that allow people to make money and goods services people can buy with money they make Successful firms embrace change No business= inefficient economy

What are the benefits and criticisms of the free trade movement?

Reasons to create trade restrictions -Protect domestic industry and jobs -Protect national security interests -Retaliate against countries who have engaged in unfair trade practices -Pressure other countries to change their policies and practices Reasons to eliminate trade restrictions -Reduce prices and increase choices for consumers -Increase job opportunities -Build exporting opportunities through better relationships with other countries -Use resources more efficiently on a worldwide basis

How do companies reach global markets?

Seek foreign suppliers through outsourcing and importing Seek foreign customers through exporting, licensing, franchising, and direct investment

passive voice

Sentence construction in which the subject does not do the action expressed by the verb; rather the subject is acted upon. Passive voice tends to be less effective for business communication

What is social responsibility and how does it impact stakeholder groups?

Social responsibility: the obligation of business to contribute to society Stakeholders: any groups that have a stake--or a personal interest-- in the performance and actions of an organizations Responsibility to employees: creating jobs that work Responsibility to customers: delivering value, honesty, and communication by providing quality products at fair prices Responsibility to investors: meeting legal requirements, being honest, and spending money wisely Responsibility to community: contributing to society Responsibility to the environment

barriers to international trade

Sociocultural differences: among cultures in language, attitudes, and values -To be in other countries, businesses need to adapt -Vital to understanding and responding -Require cultivating firsthand knowledge and practicing extreme sensitivity -Nonverbal communication, forms of address, attitude towards punctuality, religious celebration and customs, business practices, and expectations regarding meals and gifts Economic differences: communist, socialist, capitalist Political and legal differences Sometimes don't allow foreigners to own land

How do you compose effective business memos, letters, and emails?

Strike the right tone Don't make grammar goofs Use block paragraphs Use headings and bulleted lists whenever appropriate

What is the free market system and the supply and demand relationship?

The free market system, also known as capitalism, is the economic system of the United States based on private ownership, economic freedom, and fair competition. Paramount importance given to individuals, innovation, and hard work Individuals, businesses, or non-profit organizations privately own the vast majority of enterprises (with only a small fraction owned by the government) Buyers and sellers determine the selection of products and prices available in the economy Supply curve shows the relationship between price and quantity from a supplier standpoint→ as price rises, quantity produced rises correspondingly Demand curve shows relationship between price and quantity from a demand standpoint→ quantity demanded tends to drop as prices rise

How has business evolved?

With more technology becomes more demand. It hasn't always been about what consumers want

embargo

a complete ban on international trade of a certain item, or a total halt in trade with a particular nation

Consumer Price Index (CPI)

a measure of inflation that evaluates the change in weighted-average price of goods and services that the average consumer buys each month

Producer Price Index (PPI)

a measure of inflation that evaluates the change over time in the weighted-average wholesale prices

exchange rates

a measurement of the value of one nation's currency relative to the currency of other nations

World Trade Organization (WTO)

a permanent global institution to promote international trade and to settle international trade disputes

foreign franchising

a specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements

social audit

a systematic evaluation of how well a firm is meeting its ethics and social responsibility goals

corporate philanthropy

all business donations to nonprofit groups, including money, products, and employee time

communism

an economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government

Socialism

an economic system based on the principle that government should own and operate key enterprises that directly affect public welfare, such as utilities, telecommunications, and healthcare

World Bank

an international cooperation of 189 member countries, working together to reduce poverty in developing world

International Monetary Fund (IMF)

an international organization of 188 member nations that promotes international economic cooperation and stable growth

General Agreement on Tariffs and Trade (GATT)

an international trade treaty designed to encourage worldwide trade among its members

stakeholders

any persons or groups who will be affected by an action

business technology

any tools- especially computers, telecommunications, and other digital products-- that businesses can use to become more efficient and effective

foreign licensing

authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area