Intro to business study guide

Embargo (def)

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

code of ethics (def)

A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations

Limited Liability Company (LLC) (def)

A hybrid form of business ownership that is similar in some respects to a corporation while having other characteristics that are similar to a partnership

Ethics (def)

A set of beliefs about right and wrong, good and bad. business ethics involve the application of these issues in the workplace.

consumerism (fact)

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, and (4) the right to be heard

Social audit (def)

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

Consumerism (def)

A widely accepted social movement-suggest that consumer rights should be the starting point.

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

Gross domestic product (fact)

All domestic production is included in the GDP, even when the producer is foreign owned. GDP is a vital measure of economic health. Businesspeople, economists, and political leaders use GDP to measure the economic performance of individual nations and to compare the growth among nations.

Trade deficit (fact)

Although a trade deficit signals the wealth of an economy that can afford to buy huge amounts of foreign products, a large deficit can be destabilizing. It indicates, after all, that as goods and services flow into a nation, money flows out—a challenge with regard to long-term economic health

Socialism (fact)

Although the official government goal is to run these enterprises in the best interest of the overall public, inefficiencies and corruption often interfere with effectiveness. Socialist economies also tend to have higher taxes, which are designed to distribute wealth more evenly through society

Recession

An economic downturn marked by a decrease in the GDP for two consecutive quarters.

Socialism (def)

An economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare.

Listening (def)

Attentive listening that occurs when the listener focuses their complete attention on the speaker. Plays an obvious role in business success.

Standard of living (fact)

Business drives up the standard of living for people worldwide

Federal debt (fact)

By the end of 2020, the total U.S. federal debt stood at $26.95 trillion and growing, a staggering $82,000 for every U.S. citizen.

Code of ethics (fact)

Clearly, an ethics code becomes even more important for multinational companies, since it lays out unifying values and priorities for divisions that are rooted in different cultures. But a written code is worthless if it doesn't reflect living principles. An effective code of ethics flows directly from ethical corporate values and leads directly to ongoing communication, training, and action.

Effective communication (fact)

Communication must be dynamic, fluid, and two-way, which includes listening. Seeking and understanding feedback from your audience—and responding appropriately—form the core of successful business communication

Nonverbal communication (def)

Communication that does not use words. Used to reinforce the meaning of your message

General partnership (def)

Each partner has the right to participate in the company's management and share in its profits. Each partner has unlimited liability for company debts

Advantages of Sole Proprietorship

Ease of formation, retention of control, pride of ownership, retention of profits, possible tax advantage

Social audit (fact)

Establishing goals is the starting point for a social audit, but the next step is to determine how to measure the achievement of those goals, and measurement can be a bit tricky. As You Sow, an organization dedicated to promoting corporate social responsibility, recommends that companies measure their success by evaluating a "double bottom line," one that accounts for traditional financial indicators, such as earnings, and one that accounts for social-responsibility indicators, such as community involvement.

Free trade (fact)

Even though complete free trade is not a reality, the emergence of regional trading blocks, common markets, and international trade agreements has moved the world economy much closer to that goal.

Effective Communication (def)

Happens only when you transmit meaning - relevant meaning - to your audience

Importing (fact)

Imported products, of course, don't carry the brand name of the importer, but they also don't carry as much risk. Pier 1 Imports, a large, now exclusively online retail chain, has built a powerful brand around the importing concept, curating a range of merchandise that gives the customer the sense of a global shopping trip without the cost or hassle of actually leaving the country.

Direct investment (fact)

In foreign production and marketing facilities represents the deepest level of global involvement. The cost is high, but companies with direct investments have more control over how their business operates in a given country.

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

Debt ceiling (fact)

In theory, this is meant to limit the amount that the government can borrow, but in practice, voting on the debt ceiling happens separately from voting on taxes and spending, so the debt ceiling ends up being mostly about whether the federal government can pay for debts that it has already incurred.

Corporate philanthropy (fact)

Includes donations of employee time, in other words, some companies pay their employees to spend time volunteering at nonprofits.

Dynamic delivery (fact)

It begins and ends with preparation, but keep in mind that practice doesn't always make perfect—in fact, practice more often just makes permanent. So be sure that you practice with an eye toward improvement. If possible, you should set up a practice situation that's close to the real thing. If you'll be standing to present, stand while you practice, since standing makes many people feel more vulnerable. Consider practicing in front of a mirror to work on eye contact and gestures. Also, try recording your voice to work on a lively tone.

Joint venture (fact)

Joint ventures are a popular, though controversial, means of entering foreign markets. Often a foreign company connects with a local firm to ease its way into the market.

Limited liability company (LLC) (fact)

Like a corporation, an LLC is considered a legal entity separate from its owners. Also like a corporation—and as its name implies—an LLC offers its owners limited liability for the debts of their business. But it offers more flexibility than a corporation in terms of tax treatment; in fact, one of the most interesting characteristics of an LLC is that its owners can elect to have their business taxed either as a corporation or a partnership

Advantages of a C corporation

Limited liability, Permanence, Ease of transfer of ownership, Ability to raise financial capital, Ability to make use of specialized management

Debt ceiling (def)

Maximum amount Congress lets the government borrow

Capitalism

One core capitalist principle is the paramount importance of individuals, innovation, and hard work. In a capitalist economy, individuals, businesses, or nonprofit organizations privately own the vast majority of enterprises (with only a small fraction owned by the government)

trade surplus

Overage that occurs when the total value of a nations exports is higher than the total value of its exports

C Corporation (fact)

Ownership of C corporations is represented by shares of stock,Common stock represents the basic ownership interest in a corporation, but some firms also issue preferred stock. One key difference between the two types of stock involves voting rights; common stockholders normally have the right to vote in stockholders' meetings, while preferred stockholders do not

Characteristics of entrepreneurs

People who risk their time, money, and other resources to start and manage a business

nonprofit organization (fact)

Play a critical role in the economy, often working hand in hand with businesses to improve to quality of life in our society. Focusing on areas such as health, humas service, education, art, religion, and culture.

Monopolistic competition (fact)

Producers have some control over the price of their wares, depending on the value that they offer their customers. And new producers can fairly easily enter categories marked by monopolistic competition. in fact, in monopolistic competition, a successful product usually attracts new suppliers quite quickly

Quotas (fact)

Quotas, VERs, and embargoes are relatively rare compared to tariffs, and tariffs are falling to new lows.

Nonverbal communication (fact)

Random facial expressions and disconnected body language— arbitrary arm thrusts, for example—are at best distracting, and at worst clownish. But strong, deliberate nonverbal communication can dramatically magnify the impact of your messages such as eye contact, tone of voice, facial expressions, or gesture and posture.

monetary policy (def)

Refers to the actions that shape the economy by influencing interest rates and the supply of money.

Social Responsibility (fact)

Similar to ethics, the broad definition is clear, but specific implementation can be complex. Obviously, the number-one goal of any business is long-term profits; without profits, other contributions are impossible

Industrial Revolution

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.

Federal reserve (fact)

The U.S. economy continued to stagger through 2010 and 2011, with unemployment remaining stubbornly high, although signs of recovery began to emerge in late 2012, and certainly in 2013. Took unprecedented, proactive steps to encourage an economic turnaround

International trade (fact)

The benefits of international trade for individual firms include access to factors of production, reduced risk, and an inflow of new ideas from foreign markets. Overall, industries tend to succeed on a global basis in countries that enjoy a competitive advantage. Measuring the impact of international trade on individual nations requires a clear understanding of balance of trade, balance of payments, and exchange rates

monetary policy (fact)

The federal reserve manages US monetary policy. The board of governors set the monetary policy

Embargo (fact)

The intention of most embargoes is to pressure the targeted country to change political policies or to protect national security.

C Corporation (def)

The most common type of corporation, which is a legal business entity that offers limited liability to all of its owners, who are called stockholders

Discount rate (def)

The rate of interest that the Federal Reserve charges when it loans funds to banks.

Macroeconomics (def)

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

Microeconomics

The study of smaller economic units such as individual consumers, families, and individual businesses

federal debt (def)

The sum of all the money that the federal government has borrowed over the years and not yet repaid.

Partnership (fact)

There are many different types of partnerships, each with their own specific characteristics.

General partnership (fact)

There is no limit on the number of partners who can participate in a general partnership, but most partnerships consist of only a few partners—often just two. The partnership is formed when the partners enter into a voluntary partnership agreement. It is legally possible to start a partnership on the basis of a verbal agreement, but doing so is often a recipe for disaster. It's much safer to get everything in writing and to seek expert legal assistance when drawing up the agreement. A typical partnership agreement spells out details, such as the initial financial contributions each partner will make, the specific duties and responsibilities each will assume, how they will share profits (and losses), how they will settle disagreements, and how they will deal with the death or withdrawal of one of the partners. Well-written agreements can prevent common misunderstandings, and even potential lawsuits.

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.

Green marketing (fact)

This means marketing environmental products and practices to gain a competitive edge. green marketing has represented a tough challenge: while most people supported the idea of green products, the vast majority wouldn't sacrifice price, performance, or convenience to actually buy those products.

Face to face communication (def)

Very high richness, your audience experiences your full message even more directly.

direct investment (def)

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

Discount rate (fact)

When the Fed reduces the discount rate, banks can obtain funds at a lower cost and use these funds to make more loans to their own customers. the Fed is most likely to reduce the discount rate during recessions.

Joint venture (def)

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

Face to face communication (fact)

When your message is personal, emotional, complex, or high priority (but if the recipient might be volatile, consider using a less immediate channel) When you need or want instant feedback from your audience

Macroeconomics (fact)

While macroeconomic issues may seem abstract, they directly affect your day-to-day life, influencing key variables such as what jobs will be available for you, how much cash you'll actually take home after taxes, or how much you can buy with that cash in any given month.

Ethics (fact)

While your individual ethics stem from who you are as a human being, your family, your social group, and your culture also play a significant role in shaping your ethics. ethics relate to individuals and their day-to-day decision making. Just as clearly, the decisions of each individual can affect the entire organization.

Sole Proprietorship (def)

a business that is owned, and usually managed, by a single individual.

Ethical dilemma

a decision that involves a conflict of values; every potential course of action has some significant negative consequences

monopolistic competition (def)

a market structure in which many competitors selling differentiated products; barriers to entry are low

Balance of payments (def)

a measure of the total flow of money into or out of a country

Partnership (def)

a voluntary agreement under which two or more people act as co-owners of a business for profit

Advantages of General Partnership

ability to pool financial resources, ability to share responsibilities and capitalize on complementary skills, ease of formation, possible tax advantages

corporate philanthropy (def)

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

Capitalism (def)

an economic system based on the private ownership, economic freedom, and fair competition. also known as a "private enterprise system" or a "free market system"

Business

any organization or activity that provides goods and services in an effort to earn a profit

About entrepreneurs

as they create wealth for themselves, they produce a ripple effect that enriches everyone around them. The impact of one successful entrepreneur can extend to the far reaches of the economy

Non profits (def)

business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain

Disadvantages of LLC

complexity of formation, annual franchise tax, foreign status in other states, limits on types of firms that can form LLCs, differences in state laws

green marketing (def)

developing and promoting environmentally sound products

Sole Proprietorship (fact)

far as the law is concerned, a sole proprietorship is simply an extension of the owner. Company earnings are treated just like the owner's income. Likewise, any debts the company incurs are considered the owner's personal debts. This means that a business owner's personal financial assets, such as cash, bank accounts, their home or investments, can be seized to pay unpaid company debts. known as unlimited liability

International trade (def)

gives access to factors of production, reduced risk, inflow of innovations

Listening (fact)

higher you go in an organization, the more you find that people are listening. Hourly employees may spend 30% of their time listening, while managers often spend 60%, and executives might spend 75% or more. Interestingly, top salespeople also tend to spend about 75% of their communication time listening.

Quotas (def)

limitations on the amount of specific products that may be imported from certain countries during a given time period

Disadvantages of Sole Proprietorship

limited financial resources, unlimited liability, limited ability to attract and maintain talented employees, heavy workload and responsibilities, lack of permanence

Advantages of LLC

limited liability, tax pass-through, simplicity and flexibility in management and operation, flexible ownership

Importing (def)

means buying products from overseas that have already been produced, rather than contracting with overseas manufacturers to produce special orders.

Balance of payment surplus (fact)

means that more money flows in than out, while a balance of payments deficit means that more money flows out than in.

Balance of payments surplus (def)

overage that occurs when more money flows into a nation than out of that nation

trade deficit (def)

shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports

Channel richness

the amount of information that can be transmitted during a communication episode. Can range from very low such as texting to very high such as face to face communication

Balance of payments (fact)

the balance of trade plays a central role in determining the balance of payments. But the balance of payments also includes other financial flows such as foreign borrowing and lending, foreign aid payments and receipts, and foreign investments

Federal reserve (def)

the central bank of the US which bails out shaky firms during a financial crisis and managing the US monetary policy

Social responsibility (def)

the obligation of a business to contribute to society

Standard of living (def)

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

Value

the relationship between the price of a good or a service and the benefits that it offers its customers

Protectionism

the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports also called trade restrictions

Gross domestic product (def)

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.

Free trade (def)

the unrestricted movement of goods and services across international borders

Disadvantages of general Partnership

unlimited liability, potential for disagreements, lack of continuity, difficulty in withdrawing from a partnership

Dynamic delivery (def)

vibrant, compelling presentation delivery style that grabs and holds the attention of the audience and it is a learned skill

Loss

when a business's expenses are more than its revenues (When a business brings in less money than it needs to cover expenses)