Business Dynamics

Which of the following statements is true of offshoring?

A firm often offshores processes by directly investing in its own foreign facilities.

Which of the following is a difference between a job description and job specifications?

A job description defines the jobholder's responsibilities, whereas job specifications define the qualifications necessary to do a job.

_____ is a guaranteed line of credit in which a bank makes a binding commitment to provide a business with funds up to a specified credit limit at any time during the term of the agreement.

A revolving credit agreement

_____ is similar to a virus, except that it is an independent program that can spread across computer networks without being attached to other files.

A worm

Which of the following can be achieved by marketers by acquiring customer loyalty?

Acquisition of new customers

Which of the following statements is true of ethics?

Actions that are completely legal can still be unethical.

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

Angel investors are wealthy individuals, whereas venture capital firms are companies.

_____ refer to noncash compensation, including programs such as health insurance, vacation, and childcare.

Benefits

Which of the following is a similarity between demographic segmentation and psychographic segmentation?

Both divide markets based on consumer characteristics

_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period.

Budgeting

_____ are safe and highly liquid assets that many firms list with their cash holding on their balance sheet.

Cash equivalents

Which of the following are the elements of distribution strategy?

Channels of distribution and physical distribution

Who among the following individuals is practicing green marketing?

Claire, who sells solar-powered watches

_____ software takes the electronic design for a product and creates the programmed instructions that robots must follow to produce that product as efficiently as possible.

Computer-aided manufacturing

_____ is the description of how people act when they are buying, using, and discarding goods and services for their own personal consumption.

Consumer behavior

_____ is the ongoing process of acquiring, maintaining, and growing profitable customer associations by delivering unmatched value.

Consumer relationship management

_____ is a widely accepted social movement that supports a buyer's right to be informed, to be safe, to choose, and to be heard.

Consumerism

Which of the following is the rationale behind using the approach of integrated marketing communication?

Consumers do not think about the specific source of a message, but they instead combine the messages from all the sources to create a coherent impression about the product.

_____ refers to planning for unexpected events, usually involving a range of scenarios and assumptions that differ from the assumptions behind the core plans.

Contingency planning

The _____ requires senders of unwanted commercial email to label their messages as ads and to tell the recipient how to decline further messages.

Controlling the Assault of Non-Solicited Pornography and Marketing Act

_____ is a form of unemployment that involves layoffs during recessions.

Cyclical

_____ refers to marketing, buying, selling, and servicing of products over a network, usually the Internet.

E-commerce

Which of the following statements is true of human resources departments?

Effective HR people remain open to exceptions even as they enforce broad company policies.

Which of the following statements is true in the context of employee separation?

Employers might transfer or lay off employees in response to changing business needs.

_____ is the process of continually collecting information from the external marketing surroundings.

Environmental scanning

Who among the following is likely to enjoy job autonomy?

Esther, who has a free hand and authority in her role as project coordinator

_____ means establishing only one retail outlet in a given area.

Exclusive distribution

The __________ established a minimum wage and overtime pay for employees working more than 40 hours a week.

Fair Labor Standards Act of 1938

The _____ required firms with 50 or more employees to provide up to 12 weeks of job-secure, unpaid leave on the birth or adoption of a child or the serious illness of a spouse, child, or parent.

Family and Medical Leave Act of 1993

_____ remain constant regardless of how many products are sold.

Fixed costs

__________ set objectives for their followers but give them autonomy to choose how they accomplish those goals.

Free-rein leaders

Which of the following is a characteristic of a well-chosen target market?

Good accessibility

_____ refers to the physical components used to collect, input, store, and process data, and to display and distribute information.

Hardware

_____ involves using all the media platforms to promote a product.

Integrated marketing communication

_____ involves placing a producer's products in as many stores as possible.

Intensive distribution

Which of the following is true of cloud computing?

It allows lower costs and excess capacity to its users.

Which of the following statements is true of radio frequency identification?

It can be used to help track goods and other resources.

Which of the following statements is true of cost-based pricing?

It determines the price by adding a fixed margin to the per-unit cost of a product.

Which of the following statements is true of copyright law?

It gives the creators of intellectual property the exclusive right to produce, perform, and sell their work for a specified time period.

Which of the following statements is true of telecommuting?

It increases annual cost savings for employers.

Which of the following is true of licensing?

It involves a payment of fee to the core brand.

Which of the following statements is true of equity theory?

It is based on perceptions, which are not always on the mark.

Which of the following statements best defines a channel of distribution?

It is the network of organizations and processes that links producers to consumers.

Which of the following is true of a goods and services spectrum?

It provides a tool for analyzing the relationship between goods and services.

Which of the following statements is true of a specialty store?

It sells a wide selection of merchandise within a narrow category.

In the context of bringing the code of ethics of a company to life, which of the following statements is true when experts try to advocate a forceful, integrated approach to ethics?

It should be ensured that the company's ethics code is both local and global scope.

__________ is the examination of specific tasks that are assigned to each position, independent of who might be holding the job at any specific time.

Job analysis

In the context of line-and-staff organizations, which of the following is a difference between line managers and staff managers?

Line managers supervise the functions that contribute directly to profitability, whereas staff managers supervise the functions that provide advice and assistance to the line departments.

_____ measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year.

Liquidity ratios

In the context of human resource management challenges, which of the following statements is true of older workers?

Many companies have started offering flexible schedules, training opportunities, and creative pay schedules to retain their best older employees.

_____ refers to promoting goodwill for a company by providing information and assistance to customers.

Missionary selling

_____ involves hiring independent contractors to sell products to their personal network of friends and colleagues and to recruit new salespeople in return for a percentage of their commissions.

Multilevel marketing

__________are brands that the producer owns and markets.

National brands

__________ refers to moving production or support processes to foreign countries.

Offshoring

__________ is the first step in the training and development process, designed to introduce employees to the company culture and provide key administrative information.

Orientation

__________ is a scam in which official-looking emails are sent to individuals in an attempt to get them to divulge private information such as passwords, usernames, and account numbers.

Phishing

Which of the following marketing strategies can be best employed for attracting tourists?

Place marketing

Which of the following is an internal recruitment method?

Promotions

_____ is a technology that stores information on a microchip and transmits it to a reader when it is within range.

Radio frequency identification

Which of the following is a traditional promotional tool?

Sales promotion

Which of the following is the last step of a complete human resource (HR) plan?

Separation

In the context of a SWOT (strengths, weaknesses, opportunities, and threats) analysis, which of the following exemplifies an external threat to a company?

Significant changes in the taxation policies implemented by the government

Identify a benefit of holding larger inventories.

Smoother production schedules

Which of the following statements is true of the members of a distribution channel?

Some distributors act as both wholesalers and retailers.

Which of the following is a difference between strategic planning and tactical planning?

Strategic planning is done by top-level managers, whereas tactical planning is done by middle managers.

_____ includes all organizations, processes, and activities involved in the flow of goods from the raw materials to the final consumer.

Supply chain

_____ is often referred to as the world's largest computer network.

The Internet

_____ forecasts the types and amounts of assets a firm will need to implement its future plans and help financial manager determine the amount of additional financing the firm must arrange in order to acquire those assets.

The budgeted balance sheet

__________ involves determining how a product will flow through a channel from the producer to the consumer.

The physical distribution strategy

Which of the following statements is true of online retailing?

There is a lack of security on the Web.

Which of the following is true of augmented products?

They are additional goods or services that are attached to the main purchase or actual good.

In the context of strategic planning, which of the following is true of mission statements?

They provide a clear, long-term focus for an organization.

_____ is a spontaneous financing granted by sellers when they deliver goods and services to customers without requiring immediate payment.

Trade credit

_____ is designed to stimulate wholesalers and retailers to push specific products more aggressively over the short term.

Trade promotion

In the context of supply chain, which of the following statements is true of modes of transportation?

Transportation by planes is the fastest mode but has low flexibility in handling.

Which of the following is a difference between total quality management (TQM) and Six Sigma?

Unlike TQM, Six Sigma aims to reduce defects of any process to a level of no more than 3.4 per million opportunities.

__________is the ability of goods and services to satisfy consumer wants.

Utility

Websites that incorporate interactive and collaborative features to create a richer, more interesting, and more useful experience for their users are known as _____.

Web 2.0 sites

An example of a pure good is ...

a dual-colored reversible jacket.

For successful product differentiation, ...

a product should not only be different from its competitor products but also be better.

Autocratic leadership tends to be the best option when:

a quick decision is paramount.

In the context of e-commerce, most websites transmit online payment information using _____ to ensure safe transactions.

a secure socket layer protocol

An advantage of cobranding is that ...

both partners leverage their strengths to enter new markets.

In the introduction stage of the product life cycle, companies are primarily focused on:

building customer awareness of the product.

A _____ falls between the product layout and the process layout.

cellular layout

In the context of legal and ethical dimensions of business conducts, it is illegal but ethical to ...

collaborate with other medical clinics to guarantee low prices in low-income counties.

Understanding the _____ begins with analysis of market share.

competitive environment

Enterprise resource planning (ERP) systems are:

complex.

Computer-integrated manufacturing results when:

computer-aided design or computer-aided manufacturing software system is integrated with robots.

Effectiveness means producing products that:

create value.

The _____ is a project-management tool that illustrates the relationships among all the activities involved in completing a project and identifies the sequence of activities likely to take the longest to complete.

critical path method

The tangible and intangible features of a product are sometimes called the _____.

customer benefit package

In _____, marketers determine prices based on what consumers are willing to pay and then subtract their desired margins to yield target costs.

demand-based pricing

Which of the following elements is a personal influence on the consumer decision-making process?

demographics

In operations management, _____ means using resources to create value by providing customers with goods and services that offer a better relationship between price and perceived benefits.

effectiveness.

When properly implemented, intranets enhance communication and collaboration among:

employees.

Odd pricing refers to the practice of ...

ending prices in numbers below even dollars and cents.

A _____ is used for goods that must be produced at a specific site or that are so large and bulky that it isn't feasible to move them from station to station.

fixed position layout

Financial capital refers to the ...

funds a firm uses to acquire its assets and finance its operations.

In the context of business market segmentation, _____ refers to dividing the market based on the concentration of customers.

geographic segmentation

Companies employ _____ when they actively promote the ecological benefits of their products.

green marketing

A whole range of public and private organizations market beliefs that are meant to change how people think or act. This is referred to as _____

idea marketing.

One of the benefits of licensing is ...

instant name recognition.

A benefit that cloud computing provides to individual users is that:

it allows them to store large files without taking up valuable space on their computers' hard drive.

Which of the following is a drawback of primary data?

it tends to be expensive

A _____ typically has a clear, simple chain of command from top to bottom.

line organization

A __________ is an organization with a flexible structure that brings together specialists from different areas of the organization to work on individual projects on a temporary basis.

matrix organization

In low-income countries, a high percentage of entrepreneurs are considered ...

necessity entrepreneurs.

In the context of financial statements of a company, cash flow statements commonly begin with ...

net income.

In the context of challenges to effective communication, the term _____ refers to any interference that causes the message you send to be different from the message your audience understands.

noise

A(n) _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit.

partnership

An assumption of Theory Y is that:

people can accept and even seek responsibility.

A _____ is a set of related activities that transform inputs into outputs, thus adding value.

process

A _____ doesn't require work to be performed in a specific sequence; instead, the product can be moved from one type of machinery to another in whatever sequence is necessary.

process layout

Human resource (HR) managers can nurture human investment so that it yields the highest possible return by _____.

promoting career development

Trade restrictions were created to ...

protect national security interests.

One of the major sources of equity financing for corporations is ...

retained earnings.

In the context of equal employment opportunities, affirmative action:

seeks to make up for the systematic discrimination of the past by creating more opportunities in the present.

The span of control is also called the _____.

span of management

A(n) _____ is a corporation that has limited number of owners that operates under simple, less formal rules than a C corporation.

statutory close corporation

The two broad categories of software are:

system software and application software.

In the context of an acquisition, the firm that is purchased by another firm is called the ...

target firm.

An advantage of a centralized organization is that it:

tends to have a uniform customer approach across the front lines.

A downside of publicity is that ...

the marketer has no control over how the media present the company or its products.

In the context of monetary policy, if the Fed decreases the reserve requirement, ...

there will be more loans available.

Financial managers emphasize the goal of maximizing the market price of stock because ...

they have a fiduciary duty.

One of the first steps in the human resource (HR) planning process should be:

to figure out where the company stands in terms of human resources.

The _____ of a firm includes managers who set the overall direction of the firm, articulating a vision, establishing priorities, and allocating time, money, and other resources.

top management

Which of the following is a difference between a C corporation and an S corporation?

A C corporation is double taxed, whereas an S corporation is taxed as a partnership.

In the context of international trade, which of the following companies is facing the barrier of legal differences?

An Asian company that can only import a limited amount of crude oil from an Arab country because of international trade restrictions.

Which of the following countries most likely has a comparative advantage?

An Asian country that produces quality automobiles with little opportunity cost compared to other countries.

In the context of monitoring ethics and social responsibility, which of the following is the starting point of a social audit?

Establishing goals.

_____ refers to selling products in foreign nations that have been produced or grown domestically.

Exporting

Consumerism is a widely accepted social movement. Which of the following can be considered a consumer's right?

Expressing legitimate complaints easily.

Which of the following is a difference between managerial accounting and financial accounting?

Financial accounting is governed by a set of generally accepted accounting principles, whereas managerial accounting uses procedures developed internally that are not required to follow general accepted accounting principles.

Which of the following strategies for reaching global markets is a specialized type of licensing?

Foreign franchising

Which of the following is a difference between inflation and deflation?

Inflation is a period of rising average prices across the economy, whereas deflation is a period of falling average prices across the economy.

The basic mission of the _____ is to promote global economic cooperation and stable growth.

International Monetary Fund

In the context of the strategies for reaching global markets, which of the following is a key risk of foreign outsourcing?

Involvement of social responsibility.

Who among the following is most likely to benefit in a case where there is a weak dollar against a euro?

John; an American who exports goods to Europe.

Which of the following factors is most likely to be covered by the social environment dimension of a business?

Population Size

Which of the following scenarios exemplifies a nonverbal communication that is most likely to have a negative impact on the outcome of a conversation?

Rudolph fidgets frequently when he delivers a PowerPoint presentation to his sales team.

_____ are local offices - affiliated with the US Small Business Administration - that provide comprehensive management assistance to current and prospective small business owners.

Small Business Development Centers (SPDCs)

Which of the dimensions of a business environment embodies the values, attitudes, customs, and beliefs shared by groups of people?

Social

Felix lost his job because of downsizing. To keep himself financially stable, he opened a food truck. Which of the following advantages of entrepreneurship initially motivated Felix to start the food truck?

Survival

Which of the following is a disadvantage of franchising for a franchise?

The negative halo effect

In the context of accounting, which of the following best defines cost?

The value of what is given up in exchange for something else.

Which of the following is a characteristic of entrepreneurs?

They risk their time, money, and other resources to start and manage their business.

In the context of a company's responsibility to the environment, which of the following is the idea behind sustainable development?

To meet the needs of the current generation without harming the ability of future generations to meet their needs.

_____ has a high channel richness, and especially with the state-of-the-art equipment, it conveys much of the richness of actually being there.

Videoconferencing

A high inventor turnover ratio is good because it indicates that ...

a firm can continue its daily operations with a small amount of inventory on hand.

A sole proprietorship is a form of business ownership in which ...

a single owner actively manages the company.

In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs. When such workers decide to start their own businesses, they ...

are called necessity entrepreneurs.

In the context of opportunities and threats, overhead costs for small businesses ...

are often lower than big companies.

In the context of the US economy, small businesses ...

are often the first to contract when times are tough.

In the context of balance sheets, resources owned by a firm are known as ...

assets.

The three kinds of basic financial statements that are prepared in financial accounting are ...

balance sheet, income statement, and statement of cash flows.

When writing high-impact messages, a _____ is an invaluable tool that you can use to engage your reader's attention whenever you have more than one of anything in your writing.

bulleted list

The various ways in which a message can be sent, ranging from one-on-one in-person meetings to internet message boards, are called ...

communication channels.

A(n) _____ is a combination of two firms that are in unrelated industries.

conglomerate merger

The nonprofit, nonpartisan Character Counts organization has worked with various groups of educators and community leaders to establish a set of ...

core ethical values that transcend political, religious, class, and ethnic divisions.

Costs are deducted form revenue in several stages to show how net income is determined. The first step in this process is to deduct ...

costs of goods sold.

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks tot he Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, ...

credit becomes tighter.

In the context of balance sheets, accounts receivable is an example of ...

current assets.

During a period of inflation in the US, the Federal Reserve sells treasure bonds. Buyers of these bonds write checks to the Fed, and the Fed cashes these checks from banks. Given this information, the banks will most likely...

cut back on the loans they make.

Small business start-ups are likely to find that getting commercial loans is ...

difficult because lenders are reluctant to give loans to firms that do not have a track record.

A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it.

distributorship

In the context of statement of cash flows, cash flows from operating activities show the amount of cash that flowed into the company from ...

dividends.

The primary reason people choose to become entrepreneurs is to ...

earn more money.

An advantage of franchising is ...

easier access to funding.

A(n) _____ is a structure for allocating limited resources.

economic system

In the context of universal ethical standards, being open-minded and not taking advantage of others exemplifies the core value of ...

fairness.

People with an external locus of control ...

feel buffeted by forces such as random luck.

Which of the following is a negative factor that affects socialist economic systems?

inefficiencies and corruption

In the context of budgeting, a flexible budget ...

is designed to show the appropriate budgeted level of costs for each different level of sales.

A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.

limited liability company

In the context of active listening, one of the dos for better listening is the use of ...

nonverbal communication.

A corporation is a separate entity from its owners where the ...

owners are not personally responsible for the obligations of the company.

In the context of international trade restrictions, _____ are limitations on the amount of specific products that may be imported from certain countries during a given time period.

quotas

In the context of the income statement of an organization, accountants use accrual-basis accounting when recognizing ...

revenues.

In the context of social responsibility, _____ include employees and investors who have a personal interest in the performance and actions of an organization.

stakeholders

David is the chief of a mining company. He wants to implement a new procedure that would ensure that future generations will be able to meet their needs. The mining company is embracing the idea of ...

sustainable development.

During a period of grave financial crisis in the US, Congress is pressured to raise the limit on government borrowing. Sharp tax hikes and across-the-board spending cuts will likely create ...

the fiscal cliff.

Macroeconomics involves the study of ...

the gross domestic product of a company.

Buying an established business is a better plan than starting your business from scratch because ...

the organizational structure is in place.

If an auditor doesn't find any problems with the way a firm's financial statements were prepared and presented, the report will offer a(n) _____ opinion.

unqualified

To strike the right tone while writing a business message, it is suggested that an individual ...

uses the active voice to facilitate concise communication.

A large film production company merges with a popular sound processing studio, resulting in the formation of a new company out of the two previously independent firms. This is most likely an example of a ...

vertical merger.

Alfred thinks everyone should have an equal opportunity, but it's okay to give the open job to his friend that really needs it. Which of the following statements is most likely true of Alfred?

He views ethics as relative.

Who among the following individuals uses nonverbal communication?

Herbert, who maintains eye contact with his employees while talking to them.

Which of the following is an intimidating obstacle that small businesses face?

High Health Insurance Costs

Which of the following is a drawback of buying a franchise?

If the national brand suffers, so does the business.

In the context of creating and delivering successful verbal presentations, which of the following statements is true of dynamic delivery?

It begins and ends with preparation.

In the context of global trade, which of the following statements is true of balance of payments?

It includes foreign borrowing and lending.

Which of the following statements is true of profit in a business?

It is the financial reward that comes from starting and running a business.

In the context of factors of production, which of the following is a natural resource?

Land

In the context of balance sheets, which of the following is a difference between liabilities and owners' equity?

Liabilities indicate the claims outsiders have against the firm's assets, whereas owners' equity refers to the claims the ones have against their firm's assets.

When a business brings in less money than it needs to cover expenses, it incurs a ______.

Loss

_____ are market structures with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones.

Natural Monopolies

_____ is the profit or loss a firm earns in the time period covered by the income statement.

Net income

_____ is a form of communication that does not involve the use of words.

Nonverbal communication

The _____ limits conflict-of-interest issues by restricting the consulting services that accounting firms can provide for the companies they audit.

Sarbanes-Oxley Act

In the context of the history of American business, which of the following statements is true of the production era?

The assembly line became standard across major manufacturing industries.

In the context of the history of American business, what is true of the marketing era?

The balance of power shifted away from producers and toward consumers.

James is always keen on putting his ideas into action regardless of the outcome. Which entrepreneurial characteristic is highlighted in the given scenario?

Vision

In the context of ethics and social responsibility in the global arena, which of the following statements is true of a business's responsibility to workers abroad?

When deciding living wages, companies must bring together their own values with the laws of both the US and their host countries.

Which fo the following is a difference between limited partnerships and limited liability partnerships?

In limited liability partnerships, all the partners actively participate in the management of the company, whereas in limited partnerships, only the general partners actively manage the company.

Which of the following communication channels should ideally be used when you need to reach a large audience with an important message?

In-person presentation

In the context of an organization dedicated to promoting corporate social responsibility, which of the following statements is true of measuring a company's success by evaluating a double bottom line?

It accounts for traditional financial indicators, such as earnings.

Which of the following communication channels should ideally be used when you must communicate lengthy or detailed uncontroversial information?

Memos

In the context of a business environment, computers, telecommunications, and other digital tools are considered to be part of the _______.

Technological Environment

Which of the following communication channels should ideally be used when the content is uncontroversial and a quick response regarding relatively simple issues is required?

Texting