MCE test 1

franchisor

a company that develops a product concepts and sells others the rights to make and sell the products

accounting

keeping records, sales, tax planning, financial forecasting

monopolisitc competition

large number of sellers produce very similar products that buyers perceive as different (burger king, mcdonalds, wendys)

corporation

legal entity that is separate and distinct from its owners

partnership

legal form of business with two or more owners

limited liability company (LLC)

like an s corp, but without special eligibility requirements

PPI (producer price index)

looks at wholesale prices for things that will eventually be sold

stakeholders

managers are accountable to stakeholders because they are the "Face" of the organization

operations

manufacturing plan, supply chain consideration

perfect competition

many sellers but none is large enough to dictate the price of a product

free market economies

market largely determines what goods and services get produced

cost of goods sold

measure of the cost of merchandise sold or cost of resources used for producing items

productivity

measures effectiveness and efficiency, amount of output generated given amount of input

effective

meeting the objective

planning

need a mission, vision, and value for a business

financing

need money to start a business

cyclical unemployment

occurs when there is a downfall in the economy

profit

the amount of money earned above and beyond what it spends

equilibrium point

the price determined by supply and demand (market price)

management

the process of getting things done effectively and efficiently through people

supply

the quantity of products that manufacturers or owners are willing to sell at different prices at a specific time

demand

the quantity of products that people are willing to buy at different prices at a specific time

accountability

the requirement of one person to answer to a higher authority

revenue

total amount of money a business takes in during a given period by selling goods or services

gross domestic product

total value of final goods and services produced in a country in a given year

recession

two or more consecutive quarters of decline in GDP

efficient

using the smallest amount of resources

merger

vertical: joining of two companies involved in different stages of related business conglomerate: joining of firms in unrelated industries horizontal: joining of two firms in related industry

upside down pyramid

view of organization that puts consumers at the top and positions of upper levels as supporters of lower management

recovery

when economy stabilized and starts to grow, eventually leading to economic boom

referent power

when people idolize individuals so they trust them

structural unemployment

workers skills don't match the jobs that are open

globalization

world trade- has had significant growth due to technological advancement

free-market capitalism

all or most factors of production and distribution are privately owned and operated for profit

business

an activity that seeks to provide goods and services to others while operating at a profit

non profit

an organization whose goals do not include making a personal profit for its owners or organizers

CPI (Consumer Price Index)

cost of thing to the consumer

operating costs

costs involved with operating the organization

Crowd funding

donation based or lending

communism

economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

frictional unemployment

expected, exists naturally when people leave a job or time between graduation to starting a job

inflation

A general and progressive increase in prices

socialism

An economic system based on the premise that some, if not most basic businesses should be owned by the government so that profits can be distributed among people

resource development

How to increase resources and to create conditions that will make better use of those resources

four functions

Plan: establish goals, objectives organize: create shape for organization lead: getting people enthused, excited, inspired control: measuring work performance

state capitalism

System in which companies are privately run, but work closely with the government in forming laws and regulations

loss

When a business expenses are more than its revenues

organization

a deliberate arrangement of people brought together to accomplish a specific purpose

Entrepreneur

a person or team that risks time and money to start and manage a business

manager

a person that uses influence to set and achieve goals

disinflation

a reduction in the rate of inflation

C corporation

a state chartered legal entity with authority to act and have liability separate from its owners

S corporation

a unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

coercive power

ability to harm, penalize, or punish someone

limited partnership/partner

an owner who invests money in the business but does not have managing responsibilities or liability for losses beyond investment

general partnership/ partner

an owner/partner who has unlimited liability and is active in managing the firm

stakeholders

any constituencies in an organization's environment that are affected by that organizations decisions and actions

Franchise agreement

arrangement where someone with a good idea for a business sells the rights to use the business name and sell a product or service to others in a given territory

legitimate power

associated with having status or formal job authority

microeconomics

behavior of people and organizations in particular markets (cost/benefit calculations, purchasing decisions)

human resources

deciding labor needs, recruiting right people, training and development for growth

economic boom

business is booming

cooperative (co-op)

business owned and controlled by the people who use it (employees, consumers, producers)

pure risk

can only result in a loss, no chance of profit (threat of fire, theft, accident)

speculative risk

can result in either a profit or loss (buying new machinery, acquiring more inventory)

three skills

conceptual: analytical skills Human: being able to read situations, manage relationships technical: perform tasks proficiently, do your job

social power- positional

derived from the formal roles you hold in an organization, a social system, or society

social power- personal

derived from your unique personal attributes and skills that lead others to respect, idolize, adore and trust you

oligopoly

few sellers dominate the market (car companies, gaming systems)

levels of management

frontline managers, middle managers, top managers

command economies

government largely determines what goods and services get produced, and who gets them and how the economy grows

price indexes

help gauge the health of the economy by measuring levels of inflation, disinflation, deflation, and stagflation

Flow through entity

income is passed straight to shareholders or owners

venture capitalists

individuals or companies that invest in new business in exchange for partial ownership of those businesses

expert power

influence others by possessing knowledge or skills that they value

three roles

informational: collecting info, analyzing interpersonal: dealing with other people decisional: make decisions and be able to weight the risk

productivity

input in a given amount of time

acquisition

one company's purchase of another company

monopoly

one seller controls the total supply of a product or service (they determine price)

Macroeconomics

operation of a nation's economy as a whole (GDP, unemployment rate, price indexes)

sole proprietorship

owned and usually managed by one person, owner manages all areas of the business

consumer market

people with unsatisfied wants and needs who have both resources and willingness to buy

unemployment rate

percentage of civilians at least 16 who are unemployed and tried to actively find a job in the last 4 weeks

franchisee

person who buys a franchise

deflation

prices are dropping

stagflation

prices are going up more drastically

Angels

private individuals who invest their own money in potentially hot new companies before they go public

limited liability

responsibility of a business's owners for losses only up to the amount they invest

unlimited liability

responsibility of business owners for all debts of the business

seasonal unemployment

results because of different needs in different seaons

franchise

right to use a specific business's name and sell its products or services in a given territory

depression

severe recession, usually accompanied by deflation

SBA

small business administration: agency that advices and assists small businesses

mixed economies

some decisions are made by the market and some are made by the government

reward power

someone controls something that you want

Demography

statistical study of human population with regard to its size, density, and other characteristics such as age, gender, and income

economics

study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals