Bus 101 Midterm

What percentage of revenue is taken in by C-Corps? (Corporations)

82%

Why do people start their own businesses?

-to be your own boss -to accommodate a desired lifestyle -To achieve financial independence -to enjoy creative freedom -to use your skills and knowledge

What is a Gift vs Bribe?

A bribe is a gift given that may seem overly generous. It may come at a time during an important decision. Look at the price, timing, and type of gift, along with the connection between the receiver and the giver.

What is a business and its purpose?

A business is anything that sells or exchanges goods/services for profit.

What is a business code of conduct?

A document describing the principles and guidelines that all employees must follow. It is important because it tells employees how to act and what repercussions will be for any wrongdoings.

Difference between merger and acquisition. What is a hostile takeover?

A merger is when two companies merge to form a new company. Acquisition is where one company purchases the other but no new business is formed. Hostile takeover is when a company buys another company that didn't want to be bought.

What is a whistleblower and which companies were exposed due to one?

A whistleblower is an individual who exposes illegal/unethical behavior in a business. WorldCom was exposed by Cynthia Cooper.

What are the various management styles and skills?

Autocratic style -make decisions without soliciting input from subordinates. Democratic style -seek input from subordinates while retaining authority to make final decisions. Laissez-fairs style -"hands off" approach. Provide little direction and allow freedom for subordinates to solve problems and make decisions. Skills Technical skills-to perform specific tasks Interpersonal skills-get along and motivate with others. Conceptual skills-analyze and reason in complex situations. Communication skills Time management skills Decision making skills

What is the best course of action if you receive a gift?

Check the company's policy. JC Penny for example doesn't allow gifts greater than $50 cash value.

Supply, demand, equilibrium

Demand is the amount of a product that buyers are willing to purchase. Supply is the amount of product sellers are willing to sell. Equilibrium is where the two intersect. It is the perfect price where supply equals demand

What is an entrepreneur and entrepreneurial activities?

Entrepreneur is someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of said opportunity. Entrepreneurial activities include: Innovation, running a business, and risk taking.

What are the challenges with ethical delemmas and ethical decisions.

Ethical dilemma is a morally problematic situation, while an ethical decision is a right vs wrong decision. Making an ethically incorrect decision is called ETHICAL LAPSE.

What are the components of a business plan?

Executive summary, description of proposed business, industry analysis, mission statement, core values, management plan, goods or services, marketing, global issues, and financial plan.

What makes up a small business?

It is independently owned and operated, exerts little influence on its industry, and has fewer than 500 employees

What is SWOT analysis and why is it used?

It is matching the strengths of your business with the opportunities available to it. It stands for Strengths, Weaknesses, Opportunities, and Threats. It is used to identify opportunities that could benefit the company as well as threats to its success.

What is a conflict of interest?

It is when you must make a decision that promote your personal interests over that of others. You may look to throw business toward a family member even if that isn't in the company's best interest.

What are the functional areas of a business?

Management, operations, marketing, accounting, and finance.

Micro vs macro economics

Micro is individual and business economics while macro is government and country economics.

What are the two general economic systems?

Planned and Free Market systems. Planned is closely related to communism. High government involvement. Free market is closer to capitalism. Limited government involvement, but high competition.

What are the 4 interrelated functions of management?

Planning, organizing, directing, and controlling resources to achieve specific goals.

What is price stability, deflation, and inflation?

Price stability is when the prices for goods and services changes very little or not at all. Deflation is when price levels go down (rarely happens). Inflation is when prices go up.

What is the difference between non-profit and for profit businesses?

Profit businesses look to maximize their profits, while non-profits look to provide society with its needs. Non-profit just wants their profits to outweigh the costs so they can continue providing what society needs from them.

Pros and cons of franchising

Pros -help in picking a location -right to use a companies brand and sell its products -help starting and operating the business -help advertising. Cons -expensive -play by the franchisers rules -they dictate what you can sell, the methods to store prepare and serve the food, and the price you sell it at. -franchisers don't always keep promises.

What is the purpose of SBA and what role does it play in small businesses?

SBA offers programs to help current and prospective small business owners. They won't loan money, but they will help you get a bank loan by guaranteeing the loan to the bank. Other programs are offered like the SBDC and SCORE which provided free training and individualized advice.

Different forms of business ownership

Sole Proprietorship -business owned by only one person. -High responsibility and risk -all business profit is your profit. Partnership -business owned by two or more people -still high risk due to unlimited liability -more diverse group of people -easier financing -shared decision making Corporation -limited liability -stake holders are not responsible for the obligations of the corporation. -longevity S-corps Limited-liability companies Cooperatives Non-for-profit corporations

What is the most common form of business ownership?

Sole proprietorship

What are the 3 main ways you can own a business?

Starting from scratch, buying an existing business, and getting a franchise.

What external factors influence a business?

The economy, government, consumer trends, and public pressure to act as good corporate citizens.

What are the two major industries or sectors small businesses participate in?

The goods-producing sector and the service-producing sector

What is GDP

The market value of all goods and services produced by the economy in a given year. If GDP is going up then the economy is improving.

Why do businesses succeed and fail and what is the survival rate of business startups?

They succeed because the owner knows the business, knows the basics of management, has proper attitude, has funding, manages time, money, and people effectively, satisfies customers, and knows how to compete. They fail because of bad business ideas, cash problems, inexperience, lack of customer focus, inability to handle growth. Survival rate is one third go out of business within 2 years, more than half close by the 4th year, and 70 percent don't make it past 7 years.

What are the benefits of corporate social responsibility?

Those who run the company must increase the value of owners investments. Employees get safe healthy places to work. Freedom from sexual harassment. Equal opportunity and diversity. Equal pay. Fair treatment toward customers.

What are 3 common levels of management

Top managers Middle managers First-line managers