Business

autocratic leadership style

A manager who makes one-directional decisions and seeks no input from her subordinates

capitalism

An economic system based on complete freedom of trade and little, if any, government control

Feedback is an important part of which function of management

Controlling

type of business organization generates the most total sales:

Corporation

With its ease of registration and pro-corporate policies, _____ is called the "state of incorporation."

Deleware

Ethics Training

Ethics training is formal training to develop awareness of inappropriate behavior and to practice appropriate responses

The major difference between a good and a service is how the producer uses the factors of production to create each.

False

The philosophy of utilitarianism is used to explain why restaurants, theaters, and hotels should make themselves handicapped accessible

False

The two sources for debt financing are angel investors and venture capitalists

False

To be a useful code of ethics, the code should offer broad policies and procedures rather than detailed rules

False, Codes of ethics can be effective in either format.

Double taxation is a distinct advantage that corporations have over other forms of ownership.

False, Double taxation is a distinct disadvantage

Enlightened firms are realizing that empowerment puts too much stress on employees and are eliminating empowerment programs

False, Enlightened firms are realizing the value of empowerment in improving employee satisfaction.

Ethics training programs typically teach how to disguise unethical behavior and not how to avoid unethical behavior.

False, Ethics training programs teach employees to develop an awareness of questionable business ethics and how to solve ethical dilemmas

Corporate philanthropy excludes any noncash donations.

False, Gifts-in-kind can be donated as a part of corporate philanthropy.

Strategic planning is long-range, formulated by top management, and made as if the company operated in a vacuum

False, Strategic planning must always consider the organization's external and internal environment

A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship

False, The franchisee has to abide by the rules set by the franchisor or risk losing his or her investment.

Registration procedures for incorporation are uniform from state to state across the U.S.

False, The incorporation process differs from state to state

When Whole Foods Market, the world's largest natural foods supermarket, acquired Select Fish, a fish processing company, it was an example of a conglomerate merger.

False, This is an example of a vertical merger.

If the sole proprietorship acquires a legal business name, the owner then has limited liability.

False, With a sole proprietorship, the owner has unlimited liability

The two types of cooperatives are wholesale and retail

False, the two types of cooperatives are buyer and seller

Direct Small Business Administration (SBA) loans are made from funds set aside each year by Congress

False, they aren't from Congress

A positive aspect of opening a small business is that it takes very little management skill because it is small

False, they require just as much skill as other businesses

capital expenditures

Funds invested in long-lived assets, such as land, buildings, machinery, and equipment

Which of the following is NOT one of the five key types of power? a. Reward b. Expert c. Referent d. Legitimate e. Influential

Influential

factors of production

Inputs, such as natural resources, labor, capital, and entrepreneurship

controlling

One of the basic functions of management

Outsourcing

One of the reasons small businesses continue to thrive in the United States

The world's largest bank, Deutsche Bank, set as its objective to make its name more recognizable in the United States. The success of its decision to sponsor a PGA golf tournament to accomplish this organizational objective will ultimately depend on which management function?

Planning

Wal-Mart has announced that it will only sell fresh and frozen fish that come from environmentally sound sources and bear the label of the Marine Stewardship Council. Wal-Mart's size gives it a unique opportunity to improve the fishing industry. This concern for _____ is one of many initiatives Wal-Mart is introducing to improve our environment

Social Responsibility

economic responsibility

The most basic responsibility of all businesses

entrepreneur

The person who takes the risk of starting and managing a business to make a profit

horizontal merger

When companies in the same industry merge to achieve economies of scale and to expand their product lines

One of the biggest advantages that a small business has over a large business

a greater ability to serve specialized markets.

credit union

a nonprofit, member-owned financial cooperative

Utilitarianism is

a philosophy that focuses on the consequences of an action to determine whether it is right or wrong. This philosophy holds that an action that affects the majority adversely is morally wrong.

commercial paper

a short-term unsecured debt issued by a financially strong corporation.

generally accepted accounting principles

accountants follow rules known as ________ to ensure accuracy and consistency in the way financial information is reported

business as a partnership, ...

agree to share the business's profits and losses

limited partner

agrees not to participate in day-to-day management of the firm

A well-written business plan should contain: a. executive summary or company overview b. a marketing plan c. a vision and mission statement d. a management plan e. all of these

all of these

The Banking Act of 1933 gave the Federal Reserve System the authority to: a. tell banks how much reserve to maintain b. ban interest on demand deposits c. regulate interest rates on time deposits d. keep banks from investing in specific securities e. all of these

all of these

In 2004, Albertson's Inc. (a grocery story chain) purchased Southern California's premier fresh, gourmet, and specialty food retailer, Bristol Farms. This was an example of ....

an acquisition

Freedom from government regulation

an advantage of sole proprietor ownership

Intrapreneurs: a. have a high degree of autonomy in spite of the fact they work for a large corporation b. have the characteristics of creativity, vision, and risk taking. c. receive regular salaries and employee benefits d. run mini-companies within large corporations e. are accurately described by all of these

are accurately described by all of these

Stakeholders

are all the individuals or groups to whom a business has a responsibility

Factors of production

are common to all productive activities, regardless of the economic system.

Autocratic leaders

are directive leaders who prefer to make decisions and solve problems on their own with little input from subordinates.

Angel investors

are individual investors or groups of experienced investors who provide funding for start-up businesses

Entrepreneurs

are people with vision, drive, and creativity, who are willing to take the risk of starting and managing a business to make a profit.

Andy Pearson ran PepsiCo Inc. for nearly 15 years, driving revenues from $1 billion to $8 billion. In 1980, Fortune named him one of the 10 toughest bosses in the United States. Pearson was singled out for the relentless demands that he put on his people. As one employee put it, Pearson's talents were often "brutally abrasive." Every year, without hesitation, he fired the least productive 10% to 20% of his workforce. Pearson used a(n) _____ leadership style

autocratic

Which of the following businesses provides its customers with a good? a. hotel b. hair salon c. accounting firm d. movie theater e. bicycle manufacturer

bicycle manufacturer

Kathy Elliot has decided that she will start a web-based company to sell reliable used cars to customers nationwide. She has decided to use the sole proprietorship business format. Elliot's next step is to write a formal _____ before she applies for a business loan

business plan

Which of the following provides the legal and managerial guidelines for operating the firm? a. articles of incorporation b. bylaws c. constitution d. corporate structure e. annual report

bylaws

Financial managers focus on _____, the inflow and outflow of cash

cash flows

Mark Ghermizian had quit his job and was looking to start a small business so he could be his own boss. When he read that people spend up to fifteen minutes every day staring at a bathroom stall door, he decided he would find advertisers who wanted to pay to have their advertising messages on bathroom stall doors. Since he has his idea, Ghermizian's next step is to:

choose a form of business organization

The U.S. money supply is composed of:

currency, demand deposits, and time deposits

The major advantage of debt financing is the:

deductibility of interest expenses

A corporation:

does not have a size limitation

Micropreneurs

entrepreneurs who start small and plan to stay small

A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities

ethical

A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities.

ethical

Who owns a corporation

everyone who owns a share of stock in the corporation

Corporations..

face many more government restrictions and regulations than sole proprietorships and partnerships

Unlike large corporations, sole proprietorships do not need a business plan

false, they need a business plan too

Which of the following is NOT a form of unemployment? a. frictional unemployment b. seasonal unemployment c. fiscal unemployment d. cyclical unemployment e. structural unemployment

fiscal unemployment

The Small Business Administration (SBA):

helps people start and manage small businesses

Social factors

influence what, how, where, and when to purchase products or services

Accounting

involves the summarizing of the financial activities for firms.

entrepreneur

is a person who opens and manages his or her own business

Social responsibility

is a voluntary obligation.

Credit terms

specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed.

Goods

tangible items manufactured by businesses

Profit

the amount of money remaining from a firm's sales revenue after it deducts production costs, interest costs, and taxes

Financial Management

the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

risk-return trade-off

the concept of a balance between the opportunity for profit and the potential for loss, a financial manager is deals with

Social responsibility is

the concern of businesses for the welfare of society as a whole

Financial managers constantly strive for a balance between:

the opportunity for profit and the potential for loss

Planning

the process of deciding what needs to be done to achieve organizational objectives; identifying when and how it will be done, and determining by whom it should be done

Depreciation

the process of distributing the original cost of a long-term asset over the years of its useful life

Management

the process of guiding the development, maintenance, and allocation of objectives

Ethics

the set of moral standards for judging whether something is right or wrong

An advantage of a small manufacturer over a large manufacturer is

the speed with which new products can be introduced to the marketplace

It is a firm's responsibility to its customers ...

to deliver what it has promised

Many people consider knowledge to be a fifth factor of production

true

The distributive process by which the burdens and rewards that society has to offer are shared:

varies from society to society

Business owners and managers have a great deal of control over the internal environment of business

which covers the day-to-day business decisions

A code of ethics: a. provides employees with the knowledge of what their firm expects in terms of their responsibilities and behavior toward fellow employees, customers, and suppliers b. can offer a lengthy and detailed set of guidelines to employees c. is a summary statement of the firm's goals, policies, and priorities d. is considered by some to be public relations gimmicks e. is accurately described by all of the above

is accurately described by all of the above

inadequate planning

is at the core of most business failures

Venture capital

is financing obtained from investment firms that specialize in financing small, high-growth companies

Control

is the mechanism for making sure the other three managerial functions--planning, organizing, and leadership--are operating smoothly

Amgen, the largest biotechnology company in the world, donates millions of dollars annually to raise the value of science literacy in the community and attract bright young minds into the field of science. Since Amgen, as an employer would benefit from this philanthropy, ....

it would be characterized as strategic giving

Organization's mission

its general purpose or reason for existence

Articles of incorporation

may vary slightly from state to state

Empowerment

means giving employees increased autonomy and discretion to make decisions as well as control over the resources needed to make those decisions

During a two-month period Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, donated ten percent of its retail profits to the Susan G. Komen Breast Cancer Foundation. The action was legal and ethical and allowed the company to still be profitable. According to the pyramid of corporate social responsibility, it was acting at the _____ responsibilities level.

philanthropic

Utilitarianism

philosophy that focuses on the consequences of an action to determine whether it's right or wrong; it seeks the best for the majority.

The Financial Accounting Standards Board (FASB) is a:

private organization that is responsible for establishing financial accounting standards in the United States

Which of the following is NOT one of the key characteristics required in order for money to be an acceptable medium of exchange? a. scarcity b. durability c. divisibility d. profitability e. portability

profitability

The three principal tools of the Federal Reserve System are:

reserve requirements, discount rate, and open market operations

The first step to incorporating a company is to:

select the company's name