Management Theory
What are the major ethical issues business people face?
-Employee behaviors and legal issues -Employee working conditions -Supplier and customer relations -Small business ethics
What are the 3 components of the circular flow in mixed economies?
-Household -Business -Gov
What are major consumerism forces?
-Individual consumer advocates and organizations -Consumer education programs -Consumer laws
What's ethical behavior?
Acting in ways consistent with that society and individuals typically thinkin are good values -Tends to be good for business and involves demonstrating respect for key moral principles ->Like honesty, fairness, equality, diginity, diversity, and individual rights
What are common measures used to evaluate a nation's econ's health?
Balance of trade: Total of the value of a nation's export minus the total value of its imports over a specific period of time Consumer confidence Inflation Rate National Income Corporate Profits: Total amount of profit made by corporations over selected New Housing Starts: The total of new homes started during the specific time period Prime Intrest Rate: The lowest interest rate that banks charge their credit-worthy customers
What are trade associations role in encouraging ethics?
Trade associations can and often do provide ethical guidelines for their members These organizations are in an excellent position to exert pressure on members to stop engaging in questionable business practices that may harm all firms in the industry Enforcement and authority vary from association to association Because trade associations exist for the benefit of their members, harsh measures may be self-defeating
What's Trading company?
Are firms that provide a link between buyers and sellers in different countries -Buys products in one country at the lowest price consistent with quality and sells to buyers in another country -Takes title to the product and perform all the activities necessary to move the products from one country to another
What Revenue Tariffs?
Are imposed soley to generate income for the gov
What's a protective tariff?
Are imposed to protect a domestic industries from competition by keeping the price of competing imports levels with or higher than the price of similar domestic products
What's Social responsibility?
activities have an impact on society and the consideration of that impact in business decision making
What's General Agreement on Tariffs and Trade and the World Trade Organization
an international organization of 160 nations dedicated to reducing or eliminating tariffs and other barriers to world trade •Account for more than 97% of the world's merchandise trade •Most-favored-nation ensures that any tariff reductions or trade concessions apply to all •Eight rounds of negotiations between 1947 and 1994 •The Uruguay Round created the World Trade Organization (WTO)
What's whistle blowing?
informing the press or government officials about unethical practices within an organization
What's Equal Employment Opportunity Commission (EEOC)
is a government agency with the power to investigate complaints of employment discrimination and the power to sue firms that practice it
The Export-Import Bank of the US?
is an independent agency of the U.S. government whose function it is to assist in financing the exports of American firms
What's Consumerism?
undertaken to protect the rights of consumers Consumer Bill of Rights: •Right to Safety •Right to be Informed •Right to Choose •Right to be Heard •Right to Consumer Education •Right to Service
For a business to be organized, it must combine four types of resources:
workers, natural resources, capital, and information.
What's a profit?
$ I got minus $ I had to spend to provide my service. (Amount of money received from a payer less the actual cost to provide the service)
What are the levels of ethical behavior?
*Individual factors Individual knowledge of an issue Personal values Personal goals• -Social factors Cultural norms Coworkers Significant others Use of the Internet -Opporunity Presence of opportunity Ethical codes Enforcement
What are the early gov regulations?(CH.2)
-Interstate COmmerce Act (1887): 1st federal act to regulate business practices; provide regulation of railroads and shipping rates -Sherman Antitrust Act (1890): Prevented monopolies or mergers where competition was endangered -Pure Food and Drug Act(2906):Est limited supervision of interstate sales of food and drugs -Meat Inspection Act(1906):Provide for minited supervision of interestate of meat and meat products -Federal Trade Commission Act(1914): Created the Federal Trade Comission to investigate illegal trade practices -Clayton Antitrust Act(1914): Eliminated many forms of price discrimination that gave large businesses a competitive advantage over smaller firms
What are 3 common forms of business ownership in the US are the sole:
-Proprietorship -Partnership -Corporation
What are the 3 basic concepts?
-What do you want? -Why do you wan it? -Write it down
What are the 10 principles of change management?
1. Address the "human side" systematically 2.Start at the top 3.Involved a layer 4.Make a formal case 5.Create Ownership 6.Communicate the message 7.Assess the cultural landscape 8.Address culture explictly 9.Prepared the unexpected 10.Speak to the individual
What are the steps entering INT markets?
1. Identify exportable products 2.Identify key foreign markets for the products 3.Analyze how to sell in each priority market 4.Set export prices and payment terms, methods, and techniques 5. Est resources requirements and return 6.Est overseas distribution network 7.Determined shipping, traffic, and documentation, procedures, and requirement 8.Promote, sell, and be paid 9.Continuously analyze current marketing, economic, and political situations
What are the guidelines for making ethical decisions
1. Listening and learn 2.Identify the ethical issues 3.Create and analyze options 4.Identify the best option from your point of view 5. Explain your decision and resolve any differences that arise
Why do people fear change?
1. Loss of job 2.Bad communication strategy 3.Shock and fear the unknown 4.Loss of control 5.Lack of reward 6.Poor Timing 7.Lack of Reward 8.Office Politics 9.Loss of SUpport System 10. Former Change Experience 11.Empathy and peer pressure 12.Lack of trust and support
What are the 4 basic management functions?
1. Planning 2.Organizing 3.Leading and Motivating 4. Controlling What are important skills to achieve it: -Interpersonal -Tech -Analytical -Conceptual
What's the evolution of social responsibility in business?
In the first quarter of the 20th century, there were very few government protections for workers or consumers Early 1900s: caveat emptor—"let the buyer beware"
What are the fundamental issues that Adam's Smith capitalism is based on?
1. The creation of wealth is the concern of private individuals, not the gov 2.Individuals must own private property and resources to create wealth 3.Econ freedom ensures the exisiting of competitive markets as they choose 4. Role of gov should be limited to providing defense against foreign enemies, ensuring internal order and furnishing public works and edu
What's Recession?
2 consecutive quarters of negative GDP growth
What percent does business fail within the 1st 10yrs?
70% Reasons for it: -Undercapitalization -Bad Customer Service -Unqualified and Untrained Employees -Bad location -Fraud -Lack business plan -Didn't seek help
What's Proprietorship?
A business that's owned by 1 person -There are 23million approx Advantages: Ease of start-up and closure Pride of ownership Retention of all profits No special taxes The flexibility of being your own boss Disadvantage: Unlimited liability Lack of continuity Lack of money Limited management skills Difficulty in hiring employees
What's Embargo?
A complete halt to trading with a particular nation or particular product
Who was the 1st to create a factory in 1793
A dude name Samuel Slater for textile -Cotton into thread
What's deflation?
A general decrease in level of prices
What's Inflation?
A general rise in level of prices
What's Import Quota?
A limit on the amount of a particular good that may be imported during a given time
What's oligopoly?
A market (or industry) in which there are few sellers
What's Consumer Price Index (CPI)?
A monthly index that measures the changes in prices of a fixed basket of goods purchase by a typical consumer in an urban area
What's Affirmative Action Programs?
A plan designed to increase the number of minority employees at all levels of an organization Written plans are required for employers with federal contracts of more than $50,000 per year Problems arise from the use of quotas and charges of reverse discrimination
What's federal defcit?
A short fall created when the federal gov spends more in a fiscal yr than it receives
What's Barter?
A system of exchange in which goods and services are traded directly for other goods and services without using money
What's code of ethics?
A written guide to acceptable and ethical behavior as defined by an organization• It outlines uniform policies, standards, and punishments for violations
What is a Stakeholer?
All different people or groups of people who are affected by an organization policies, decisions, and activities
What's a mixed economy?
An economy that exhibits elements of both capitalism and socialism
What is Producer Price Index (PPI)?
An index that measures prices that produces received for their final goods
What's Multilateral Development Bank (MDB)?
An internationally-supported bank that provides loans to developing countries: •World Bank •Inter-American Development Bank (IDB) •Asian Development Bank (ADB) •African Development Bank (AFDB) •European Bank for Reconstruction and Development (EBRD)
Since WW2 what are the average business cycle, recovery, and recession
Business cycle: Little less than 6yrs Recovery: Has been 58 months Recession: 11 months
What are business response to environmental concerns?
Companies can reduce their impact on the environment by: •Identifying and eliminating inefficiencies •Finding alternative uses for waste •Recycle as much as possible Recycling: involves converting used materials into new products or components for new products in order to prevent their unnecessary disposal GREENMARKETING
What's Licensing ?
Contractual Agreements in which one firm permits another to produce and market its product and and use its brand name in return for a royality or other compensation Advantages: -Allows expansion into foreign markets with little or no direct investment -Good for small manufacturers wanting to launch a well-known domestic brand internationally Disadvantages: -The product image maybe damage if standards are not upheld -The original producer does not gain foreign marketing experience
What's a market economy?
Econ system in which business and individuals decide what to produce and buy and the market determines quantity sold and prices
What are the 2 views of social responsibility:
Economic Model Emphasis: -Production -Exploitation of natural resources -Internal, market-based decisions -Economic return -Firm's or manager's interest -Minor role for government Socioeconomic Model Emphasis: -Quality of life -Conservation of natural resources -Market-based decisions with some community controls -Balance of economic return and social return -Firm's and community's interests -Active government
What's Int Business?
Encompass all business activities that involve exchanges across national boundaries
What's dumping?
Exporting of large quantities of a product at a price lower than that of the same product in the home market
What's monetary policy?
Federal Reserve decisions that determine the size of the supply of money in the nation and level of interest rates
What's Multinational Enterprise?
Firms that operate on a worldwide scale without ties to any specific nation or region
What's the Sarbanes-Oxley Act?
IS legislation passed by the US to protect shareholders and the general public from accounting errors and fradulent practices in the enterprise, as well as improve the accuracy of corporate discolures
What's Organizational Change Management (OCM)?
Is a framework for managing the the effect of new business process, changes in organizational structure or cultural changes within entrprise
What's a trade deficit?
Is a negative (unfavorable) balance of trade where imports exceed exports in value
What's Joint Venture?
Is a partnership formed to achieve a specific goal or to operate for a specific goal or to operate for a specific period of time Advantages: -Immediate market acknowledgment and access -Reduced Risk -Control over the product attribute Disadvantages: -Complexity of est agreements across national borders -High levels of commitment required of all parties involved
What's Countertrade?
Is an int barter transaction -Countertrade avoids restriction on converting domestic currency to foreign
What's International Monetary Fund (IMF)?
Is an international bank with 188 member nations that makes short-term loans to developing countries experiencing balance-of-payment deficits
What's comparative advantage?
Is the ability to produce a specific products more efficently than any other product
Whats a letter of credit?
Issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficary
What's bill of lading?
Issued by a transport carrier to an exporter to prove merchandise has been shipped
What's draft?
Issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank
What are the components of organizing for International Business?
Licensing Exporting Joint Venture Totally Owned Facilities Strategic Alliances Trading Companies Counter Trade Multifunctional Firms
What's laissez-faire?
Loose translation french term: Let them do (As they seem fit)"
What are some things about public health?
Many believe that businesses have a basic responsibility to contribute to the general wellbeing of the public Beyond the basic responsibility, there is contention with regard to how far businesses' responsibility to public health extends, especially about issues such as:•Obesity •Smoking •Heart disease •Alcohol use •Smartphone use while driving
Who should pay for clean environment?
Many business leaders think tax dollars should be used to clean up the environment and keep it clean •Businesses are not the only source of pollution •Businesses should not absorb the entire cost Environmentalists think the cost of proper treatment and disposal of industrial wastes is an expense of doing business
What's a tariff?
Most common trade restriction
What are most managers today doing when it comes to ethics?
Most managers today are finding new ways of balancing a growing agenda of socially responsible activities with the drive to generate profits
What's NAFTA?
North American Free Trade Agreement Joins the United States with its first and second-largest export trading partners: Canada and Mexico Supports: Contributes to significant increases in trade and investment Benefits companies in all three countries Results in increased sales, new partnerships, and new opportunities Creates high-paying export-related jobs Leads to better prices and selection in consumer goods Criticism: Has not achieved its goals Resulted in job losses Erodes labor standards and lowers wages Undermines national sovereignty and independence Does nothing to help the environment Hurts the agricultural sector
What's the European Union?
Now an economic force, with a collective economy larger than that of the United States or Japan Formed in 1957 Since 2002, 19 member nations have shared common currency: euro
What are some characteristics of economic modle of social responsibility?
Originated in the 18th century Society will benefit most when business is left alone to produce and market profitable products that society needs Company's primary responsibility is to make a profit for its shareholders Social responsibility is the problem of government, environmental groups, and charities Business should be concerned with the impact of its decisions on society Firms take pride in their social responsibility obligations It is in the best interest of firms to take the initiative in social responsibility matters
What's a strategic alliance?
Partnership formed to create competitive advantage on a worldwide basis
What's totally owned facility?
Production and marketing facilities developed by a firm in one or more foreign nations Advantages: -Direct Investment provides complete control over operations Disadvantages: -Risk is greater than a join venture 2 Types: -Building new facilities in the foreign countries -Purchasing an existing firm in a different countries
What's ethical fashion?
Production of textiles items with a conscience
What do stockholders an business owners believe it is the bottom line or the most important goal for a business?
Profit
What are the Pros and Cons of Social Responsibility?
Pros: As a part of society, business can't ignore social problems Business has the means to tackle social problems Addressing social problems can create a more stable environment Socially-responsible decision making prevents government intervention Cons: Businesses are primarily responsible to shareholders Corporate time, money and talent should be used to create profit Individual businesses can't be expected to solve problems affecting society in general Social issues are the problem of government officials elected for that purpose
What's a business cycle?
Prosperity - > Recession - > Depression - > Recovery - > Prosperity...
What's Factors of production?
Resources used to produced goods and services
What's foreign-exchange control?
Restriction on amount of foreign currency that can be purchased or sold
What's an organization?
Social unit of people that's structured and managed to meet a need to or to pursue collective goods
What did Adam Smith's book, "Wealth of Nations" argued about?
Society's interest are best served when the individuals within that society are allowed to pursue their own interest
What's macroeconomics?
Study of national and global economy
What's microeconomics?
Study of the decisions made by individuals and business
What's free enterprise?
System of business in which individuals are free to decide what to produce it and at what price to sell it
What's a Invisible hand?
Term cerated by Adam Smith to describe how an individual's personal gains benefits others and a national's econ
What's Absolute Advantage?
The ability to produce a specific product more efficenctly than any other nation -Ex: Saudi Arabia with oil Australia with wool South Africa with diamonds
What's Int Trade?
The exchange of goods or services along international borders -The competition results in more affordable products for consumer -The exchange of goods also affects the economy of the world as dictated by supply and demand
What's Change Management?
The process tools and techniques to manage the people side to achieve a required business outcome
What's currency devaluation?
The reduction of the value of a nation's currency relative to the currencies of other countries
What's ethics?
The study of right and wrong and the morality of choices individuals makes
What's Balance of payments?
The total flow of money into a country minus the total flow of money out of that country over some period of time
What's the balance of trade?
The total value of a nation's exports minus the total value of its imports over some period of time -Negative balance of trade is unfavorable because the country must export money to pay for its excess imports
What is the ultimate goals for a business?
To meet and satisfy the needs of its customers
What's command economy?
What gov say what goods and services will be provided
How wealth is distributed simply means?
Who gets what
what's monopolistic competition
a market situation in which there are many buyers along with a relatively large number of sellers who differentiate their products from the products of competitors
What are the reasons for trade restrictions?
to equalize a nation's balance of payments, to protect new or weak industries, to protect national security, to protect the health of citizens, to retaliate for another nation's trade restrictions, to protect domestic jobs, Higher prices for consumers, Restriction of consumers' choices, Misallocation of international resources, Loss of jobs
