Business Final
Hallie owns 20% of the common stock of the Bean Brothers Coffee Company. The company announced plans to offer an additional 10,000 shares of common stock for sale. If Hallie exercises her preemptive rights, Bean Brothers must offer her the opportunity to purchase
2,000 shares.
Which of the following statements best describes the current legal interpretation of insider trading?
Anyone who has securities information about a particular firm that is not known by the general public.
________ is the characteristic of work concerned with the degree of freedom, independence and discretion an employee has in scheduling work and determining procedures.
Autonomy
Mini-CaseBriana, a successful executive, is also a cardio queen. For years she worked out at Forever Fitness Gym, the only gym in her small hometown. However, she felt that the environment at Forever Fitness was too masculine, and discovered that her female friends agreed. They disliked the small, smelly locker room, and the limited selection of cardio equipment. Most of them eventually quit going to Forever Fitness. Briana talked to Jim Nasium, the owner of Forever Fitness, about things he could do to attract more women, but he had little interest in making any changes. "I've got all the business I can handle," he told Briana. "Why should I spend a bunch of money to redecorate and add extra equipment? Besides, lots of the guys who work out here tell me they like the simple, no-frills atmosphere."Frustrated by Jim's indifference, Briana began looking into the possibility of starting a gym to appeal to young, well-educated women. After visiting gyms in other towns and talking to several friends to get ideas, she came up with a detailed plan for her gym. She then described her ideas to women in the community to see how much interest there was in this type of facility. The extremely positive response encouraged her to go ahead with her plans. It took a while, but she ultimately obtained the financial backing to go into business.Briana calls her new health club ShapeUP. It offers a spacious and attractive locker room, better cardio equipment, a child care area so young mothers can have someone watch their toddlers while they work out, and exercise classes designed to appeal to young women. When a woman joins her club, Briana schedules a free session with a personal trainer who works with the new member to design a personalized workout program. Briana tries hard to keep close to her customers by maintaining a social media presence, sending them a monthly e-mail newsletter, and routinely sending surveys asking what they like and don't like about ShapeUP. She wants to please her existing customers and keep them coming back. In fact, now that ShapeUP has a strong membership base, Briana believes it is more important to keep existing customers loyal than to attract new customers. In addition to the comments from her own customers, Briana also spends a lot of time tracking economic, social, and competitive trends in the fitness industry, trying to identify factors that can affect the marketing success of her club. She subscribes to several journals and magazines that cover trends and report on research findings related to the business. She has found that these publications provide her with an inexpensive source of useful information.Which of the following statements about Briana's marketing approach is most accurate?
Briana's marketing strategy appears to be consistent with several key aspects of relationship marketing.
Which of the following strategies provides an example of the most current era whose principles today's businesses are embracing?
Comfy Corner Hotels is all about the experience. Their goal is to make certain that every guest leaves their properties with a better feeling than when they first arrived. The CEO of Comfy Corner says, "We want you to think of our brand first when you make a hotel reservation."
________ represents the most basic form of company ownership and includes voting rights and dividends, if and when the firm elects to pay dividends.
Common stock
Which of the following statements describes past processes that existed in manufacturing that negatively affected a firm's competitive advantage?
Companies tended to produce a large quantity of the same product at a very low cost
Game Guys announced a 2-for-1 common stock split for investors on record. Which of the following will occur?
Each share will be worth ½ of its previous value, but shareholders' total value of Game Guys will remain the same.
The Hawthorne studies were conducted by ________ and his colleagues from Harvard University.
Elton Mayo
McKinley, an employee at Green Goddess Lawncare, is pleased that his old supervisor Russell retired. Russell seemed like a pretty nice guy, but rarely told McKinley if his work was acceptable until something went wrong. The new supervisor starts each day with reviewing yesterday's successes and challenges, and gives everyone opportunity to voice their concerns. One of the best assets of ________ managers is their ability to provide timely feedback and to understand that employees want regular performance reviews.
Gen X
________ is based on the notion that setting ambitious but attainable goals will improve motivation and performance if the goals are accepted, accompanied by feedback, and facilitated by organizational conditions
Goal-setting theory
Seedling Plant Science invented a drought resistant grass seed that only needs watering three times each year. In order to expand distribution worldwide, the company whose product produces lush green foliage needs a large amount of funding—fast! The handful of seed scientists that own the company decide to offer shares of stock to general investors. This first-time offering is a(n)
Initial Public Offering (IPO).
The ________ National Quality Award is given to firms that achieve an outstanding level of overall quality based on performance in seven key areas.
Malcolm Baldrige
Which of the following statements about facility location is most accurate?
Manufacturers often seek to reduce time-to-market by locating facilities in areas with access to key modes of transportation
The Four Seasons hotel chain offers restaurants with the finest service, elevators that run smoothly, and a front desk that checks people in quickly. Many times fresh-cut flowers are in the lobbies and dishes of fruit are in each room. ________ is responsible for implementing these customer benefits.
Operations management
________ is the creation of goods and services using land, labor, capital, entrepreneurship, and knowledge.
Production
If "fun and stimulation" are rated as important job criteria by Millennials, which of the following might be a way to motivate this generation?
Provide opportunity for innovation and job rotation.
________ represent a favorable source of meeting long-term financing needs because there are no interest payments, dividends, or underwriting fees required when using this source.
Retained earnings
________ blends Japanese and American management practices into a hybrid approach which calls for long-term employment, collective decision making, and individual responsibility for the outcome of decisions.
Theory Z
________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to pay for their purchases until some future date.
Trade credit
Which of the following is a part of the marketing concept?
a consumer orientation
The concept time value of money indicates
a dollar received today is worth more than a dollar received a year from today.
A strength of Generation X managers is likely to be their
ability to provide feedback to employees.
Which of the following is a likely reason that a company would move its facility from one location to another?
access to various modes of transportation
An effective budget requires
accurate forecasts.
Diversification means
allocating your investment funds to several types of investments.
As the chief financial officer (CFO), you identify that your firm needs to raise additional funds by selling new shares of stock. Which of the following refers to a specialist that assists corporations in the issue and sale of new securities?
an investment banker
Which of the following activities is most likely to be performed by a financial manager?
analysis of the tax implications of various managerial decisions
Game Guys, Inc., needs several million dollars to expand and follow its strategic plan. In negotiations with the investment banker, they agree to issue 50 million shares of common stock, at $25/share. If the investment banker's fee for underwriting the total sale is 5.82%, what is the discounted price that the investment bank is willing to pay Game Guys for the shares?
around $1,200,000,000
The stock of well-known, high-quality firms, such as Coca-Cola, General Electric, and Procter & Gamble, fit the characteristics of ________ stocks, because investors can almost always be assured a dividend and consistent stock price appreciation.
blue chip
Teeny Toys hopes to raise long-term capital by promising in writing to repay the principal provided by potential creditors in ten years. Additionally, the certificate issued by Teeny Toys promises to pay 5% interest annually for the ten-year life of the security. Teeny Toys intends to issue
bonds.
Engineers at Epic Electronics have designed a new smartphone ready to rival iPhone. The marketing department wants to find a way to identify the new phone in the minds of current smartphone consumers and differentiate it from products made by Epic's competitors. An important part of this effort is likely to be the selection of a ________ for the new phone.
brand name
The term ________ refers to investors who anticipate increases in stock prices.
bulls
The budget that estimates a firm's projected cash inflows and outflows, as well as cash shortages or surpluses during a given time period, is called the ________ budget.
cash
While Maslow's research categorized a person's needs in terms of higher-order and lower-order needs, Herzberg's research recognized that
certain work-related factors satisfied higher-order needs, while other work-related factors satisfied lower-order needs.
The Securities and Exchange Commission developed ________ to halt trading in the stock market for a short time when the market has experienced a dramatic decrease in prices.
circuit breakers
Jacob impresses his friends by stating that he just cast four votes in the election of the board of directors of Epic Electronics, indicating that Jacob owns ________ stock in Epic Electronics.
common
Mini-CaseBriana, a successful executive, is also a cardio queen. For years she worked out at Forever Fitness Gym, the only gym in her small hometown. However, she felt that the environment at Forever Fitness was too masculine, and discovered that her female friends agreed. They disliked the small, smelly locker room, and the limited selection of cardio equipment. Most of them eventually quit going to Forever Fitness. Briana talked to Jim Nasium, the owner of Forever Fitness, about things he could do to attract more women, but he had little interest in making any changes. "I've got all the business I can handle," he told Briana. "Why should I spend a bunch of money to redecorate and add extra equipment? Besides, lots of the guys who work out here tell me they like the simple, no-frills atmosphere."Frustrated by Jim's indifference, Briana began looking into the possibility of starting a gym to appeal to young, well-educated women. After visiting gyms in other towns and talking to several friends to get ideas, she came up with a detailed plan for her gym. She then described her ideas to women in the community to see how much interest there was in this type of facility. The extremely positive response encouraged her to go ahead with her plans. It took a while, but she ultimately obtained the financial backing to go into business.Briana calls her new health club ShapeUP. It offers a spacious and attractive locker room, better cardio equipment, a child care area so young mothers can have someone watch their toddlers while they work out, and exercise classes designed to appeal to young women. When a woman joins her club, Briana schedules a free session with a personal trainer who works with the new member to design a personalized workout program. Briana tries hard to keep close to her customers by maintaining a social media presence, sending them a monthly e-mail newsletter, and routinely sending surveys asking what they like and don't like about ShapeUP. She wants to please her existing customers and keep them coming back. In fact, now that ShapeUP has a strong membership base, Briana believes it is more important to keep existing customers loyal than to attract new customers. In addition to the comments from her own customers, Briana also spends a lot of time tracking economic, social, and competitive trends in the fitness industry, trying to identify factors that can affect the marketing success of her club. She subscribes to several journals and magazines that cover trends and report on research findings related to the business. She has found that these publications provide her with an inexpensive source of useful information.When Briana developed a detailed description of her ideas for a gym and asked for feedback from women about the proposal, she was engaging in
concept testing.
A widely used technique commonly used for collecting primary data is
conducting a survey.
The managers of Comfort Clothing regularly compare actual profits with the firm's projected profits. When deviations occur, the managers use the feedback to take corrective action when necessary. The management of Comfort Clothing is exercising financial
control.
By buying a ________ bond, investors will have an option to exchange their bond for shares of common stock in the company at a future date.
convertible
The first step in the marketing research process is to
define the problem and determine the present situation.
Which of the following is considered a step in the marketing research process?
defining the question and determining the present situation
The Six Sigma approach to quality control
detects potential problems early to prevent their occurrence.
Which of the following is most consistent with a relationship marketing strategy?
developing a website that seeks customer feedback and allows customers to communicate with the company
Today manufacturers are relying more heavily on
developing close relationships with just a few suppliers to secure affordable prices
Job ________ combines a series of tasks into one assignment that is more challenging, interesting, and motivating.
enlargement
Herzberg's research indicated that employees are motivated by job content. Modern managers focus on ________ by increasing the significance of the job, and even providing the employee with important feedback.
enriching the job
Green Goddess Lawncare, Inc., has enjoyed growing profits for 10 years. When new-product development made it feasible for underground sprinkling systems to be installed at a reasonable price, business soared. Recently, through ________ the owner of Green Goddess learned about a seed that only needs to be watered two times each year. This innovation could have serious consequences on healthy revenues and profits. The owner is analyzing the ________ environment in order to remain knowledgeable about new trends that may affect his business.
environmental scanning; technological
By selling shares of ownership in their company, Seattle Scientific acquires the funds needed to finance their research and development projects. Seattle Scientific provides for their long-term funding needs through ________ financing.
equity
Mini-CaseTishian's Funeral Home has been in business for over 80 years. Throughout its history, the firm has been a family-run operation. Today, the business is managed by Mort Tishian, a grandson of the founder. Unfortunately, Mort Tishian's tenure has been plagued with problems neither his father nor grandfather before him experienced. The reason is simple: the funeral business is undergoing rapid change. Small, family-owned funeral homes are losing ground to a new type of competitor, a large national network service that resembles a franchise system. More and more families "in their time of need" are choosing the new, highly promoted competitors instead of the traditional small family-operated funeral homes. This trend has required a response from organizations like Tishian's Funeral Home. Bigger and better facilities are needed to remain competitive. All of this puts more pressure on the family owners to be more active in the financial side of the business. Mort summed it up best when he said, "Grandpa told people, 'You pay me when you can, I ain't goin' nowheres.'" His creditors did the same with him. Today, it's a different game. Cash flow is key, and obtaining funds is no simple task. Additionally, creditors want their money now, not later. Banks are also more demanding. "Heck, Grandpa knew all the bankers he dealt with personally. I see new faces every time I go to the bank. If things don't get better, I suspect after eighty years of service, Tishian's Funeral Home will have its own funeral."To raise the funds for the major improvements needed at the funeral home, Mort has talked to two investors about incorporating his business and selling them shares of stock in the company. Mort is considering the use of
equity financing.
A comparison of the marketing concept and customer relationship management indicates that customer relationship management
extends the marketing concept by calling for the firm to learn more about its customers so that it not only satisfies them, but exceeds their expectations over time.
Rewards that come from someone else in recognition of good work are ________ rewards.
extrinsic
A(n) ________ job includes forecasting, budgeting, cash flow analysis, cost control, taxes, and credit management.
financial manager's
Production creates
form utility.
New developments in information technology have
given firms even greater flexibility in their location decisions
A central characteristic of management by objectives is that
goals are set through a process involving all members of the organization.
The purpose of the SEC's circuit breakers rule is to
halt trading for a short time following a dramatic drop in stock prices.
Comparing the business practices of the 1950s to those of today indicates that today's marketing managers
have a more ambitious goal of not just satisfying customers, but of exceeding their expectations.
A company becomes lean by ________ its capacity to produce high-quality goods, while ________ its need for resources.
increasing; decreasing
A(n) ________ refers to the first public offering of a corporation's stock.
initial public offering (IPO)
The Securities and Exchange Commission has accused Martha of benefiting unfairly from information secured from a corporate officer of Stewart Engineering. Because Martha used that information to profit in the stock market, she faces ________ charges.
insider trading
Undercapitalization refers to the problem of
insufficient start-up funds.
Sheldon has just successfully negotiated a new long-term sales agreement with a major client. The personal satisfaction Sheldon has about his efforts is his ________ reward.
intrinsic
A benefit of CAD is
it permits customization without a significant increase in price
Until recently, Visual Electronics manufactured Blu-ray players on an assembly line with each worker performing only one simple task. Three months ago, the company began allowing individual employees to assemble entire systems, test the components, and even install the software that Visual Electronics includes with each of its players. Visual Electronics's new production method is an example of
job enlargement.
According to the Spotlight on Small Business box, small businesses can make big money by
jumping on board with technological advances as they evolve.
With the ________ inventory control system, producers hold only the amount of materials and parts that they need for a short period of time, sometimes just a few hours.
just-in-time (JIT)
A ________ forecast predicts the revenues, costs, and expenses a firm will incur for a period longer than one year.
long-term
Lyell is a sales representative for the Nutty Boys Nut Butter Company. He is about to meet with his manager to review his progress toward meeting the sales objectives they agreed to at the beginning of the year. Lyell likes the fact that managers at Nutty Boys listen to their subordinates' ideas and get everyone involved in setting goals and objectives. Lyell's experience suggests that Nutty Boys is utilizing
management by objectives (MBO).
Rick, a marketing manager for Fix-It Tools, is discouraged with the way his organization markets its products. Currently Fix-It-Tools utilizes a strategy aimed toward the largest possible number of people. The company also relies heavily on television and online advertising. Rick protests to management that the company is not listening to its customers and is in danger of losing many of them to firms that create a personal dialogue with their buyers. What does Fix-It currently practice?
mass marketing
Roman, the finance manager at Outdoor Adventure Sporting Goods, has asked his assistant, Vincent, to prepare the ________ budget. Vincent will gather as much information as possible by utilizing the firm's other budgets and any documents that summarize proposed financial activities.
master
The operations planning practice of using sales forecasts created by a computer to accurately predict the amount and timing of materials needed to complete products and projects is
materials requirement planning.
Enterprise resource planning (ERP) goes beyond the capabilities of materials requirement planning (MRP) because it
monitors the computerized functions of all the divisions and subsidiaries of the firm in a single software program.
Frank and Lillian Gilbreth developed the principle of ________, which said that every job could be broken down into a series of elementary motions.
motion economy
Some analysts refer to ________ stocks as issues that sell for less than $2 (others say for less than $5).
penny
Marketers define a ________ as any physical good, service, or idea that satisfies a want or need
product
Outdoor Adventure, a company that designs and manufactures sportswear, focuses their marketing efforts on people who participate in strenuous outdoor activities such as running, hiking, and climbing. For example, the firm advertises heavily in Runner's World and Women's Running. Outdoor Adventure is using ________ factors to segment its market.
psychographic
Which of the following would normally involve long-term financing?
purchase of modern equipment
Maintaining ________ involves producing what the customer wants while reducing errors before and after delivery to the customer.
quality
After earning $50 million in net income, Marshall Manufacturing distributed $15 million in dividends to their stockholders. Marshall's board of directors decided to invest the remaining $35 million back into the business. This $35 million reinvestment of profits represents
retained earnings.
One of the elements essential to Frederick Taylor's approach to improving worker productivity was
rules of work.
Recently, Epic Electronics borrowed $600,000 from Dinero Finance to secure financing for a planned expansion. The ________ loan agreement requires that Epic Electronics provide the title to their factory as collateral.
secured
The U.S. economy is now driven by
services.
One implication of goal-setting theory is that goals should be
set through a process that involves all persons responsible for formulating and implementing the goals.
Luna, a marketing manager for a retailer of lighting products, will likely be involved in which of the following?
setting a price for the light fixtures her firm produces
A ________ forecast predicts the revenues, costs, and expenses a firm will incur for a period of one year or less.
short-term
If a company secures a one-year bank loan this is considered
short-term financing.
An organization whose members can buy and sell securities for companies and investors is known as a
stock exchange.
A firm's marketing mix refers to the combination of
strategies regarding product, price, place, and promotion.
To maximize the benefits of using financial leverage, a firm should
strive to minimize their cost of capital.
Jet Magazine focuses its marketing efforts on reaching young African Americans. The firm believes that they are positioned to profitably serve this group of consumers. Jet utilizes the strategy of:
target marketing
H2 O'Yeah has designed a water purification device that is drastically different and far superior to any product currently on the market. Although consumer response was positive to the idea of the new product, management wants to find out more before committing to full-scale production. The next step H2 O'Yeah's marketing department is likely to take is to:
test market the product among potential users.
The basic reason the term operations management is favored over the term production management is that
the United States is now largely driven by services rather than manufacturing.
An important criterion that helps to determine the type of management style (Type A, J, or Z) that works best for firms is
the general culture of the firm.
When reflecting upon the newer generation, each older generation says the same thing:
the newer generation "breaks the rules."
According to the Reaching Beyond Our Borders box, one way Germany is remaining competitive in industrial jobs is
they implement apprenticeships to provide on-the-job education for young workers.
Your Uncle Mike is approaching retirement and he asks for your advice for a safe place to invest several thousand dollars. He wants to receive some kind of payment each year for investing his money without a great deal of risk. You explain
treasury and top-grade corporate bonds pay interest two times each year.
Tee Time Golf Resort found that Jordan Spieth wants to put his name on golf course designs. However, for any course to be acceptable, it will cost at least $20 million to build. The plan is to purchase real estate for four new golf resorts. Proceeding with their venture, the owners have calculated that they will need approximately $100 million. But putting together an IPO is another matter. After meeting with their investment banker, they believe that investors will be willing to pay $22/share for the IPO. As the ________ for this issue, the investment bank requires 3% of the revenues generated by the sale. Tee Time will need to issue ________ shares in order to have the $100 million they need to proceed with their plan.
underwriter; 6.25 million shares
A firm that is certified as meeting both ISO 9001 and ISO 14001 standards has demonstrated
world-class management of both quality and environmental standards.