Intro to Business Final

_________ exists when the entire supply of a good is controlled by a single seller.

A monopoly

Abraham Maslow believed that motivation arises from the desire to satisfy unmet needs.

True

According to McGregor, Theory X managers assume that employees dislike work, and will avoid it if possible.

True

The primary reason that companies do performance appraisals is to improve worker performance.

True

Three elements were basic to Taylor's approach: time, methods, and rules of work.

True

Which statement is most consistent with today's views on effective marketing?

"Learn about your customers and exceed their expectations."

Under free-market capitalism, people have four (4) basic rights.

1. Own private property 2. Own a business & keep all that business's profits 3. Freedom of competition 4. Freedom of choice

List the four (4) functions of management.

1. Planning 2. Organizing 3. Leading 4. Controlling

The "marketing mix" involes four factors in the marketing process. List the four (4) factors of the "marketing mix," also referred to as the four "P's" of marketing.

1. Product 2. Price 3. Place 4. Promotion

List the three (3) "basic forms" of business ownership:

1. Sole proprietorship 2. Partnership 3. Corporation

Small businesses create about __________ percent of the new jobs in the United States.

65

The fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark is called

A royalty

According to goal-setting theory, in order for goals to enhance motivation and performance they must be

Accompanied by feedback.

An important difference between accounting and other business functions, such as marketing and management, is that

Accounting offers us insight into whether the business is financially sound.

The sixth and final step in the accounting cycle involves

Analyzing major accounting statements to evaluate the financial condition of the firm.

All else being equal, socially responsible firms

Are viewed more favorably by consumers.

In order for standards to be useful in the controlling process, they must have certain characteristics. One of these characteristics is that they must be

Attainable

_________ is the characteristic of work concerned with the degree of freedom, independence and discretion an employee has in scheduling work and determining procedures.

Autonomy

The two major types of e-commerce are

B2B and B2C.

A __________ is a check of a potential employee's work record, academic record, credit history, and recommendations.

Background investigation

The three important financial statements prepared by accountants are

Balance sheet, income statement, and statement of cash flows.

The process of rating an organization's practices, processes, and products against the best of the world is known as

Benchmarking

A comparison of bookkeeping and accounting indicates that

Bookkeeping involves recording financial information, while accounting is concerned with classifying, summarizing, and interpreting this information.

A review of small business successes and failures indicates that the

Businesses with the potential for high profit levels tend to be difficult to start and hard to keep going.

Accounting transactions are important to a firm's operations. What activities would affect the firm's account balances?

Buying and selling goods and services

Creating intense competition between employees within the corporation

Can encourage employees to deceive customers.

The most liquid asset is

Cash

An ethical dilemma refers to a situation where you must

Choose between equally unsatisfactory alternatives.

Even across generations, employee motivation is likely to

Come from the job itself.

A key to effective leadership is the ability to

Communicate a vision and rally others around that vision.

War and terrorism in many parts of the world often lead to

Consumer and economic hardship due to increased military spending.

The two major types of markets are the

Consumer market and the B2B market.

The __________ is a statistic used to measure the pace of inflation or deflation.

Consumer price index

_________ is the term used to describe those functions that a firm can do as well or better than others. It performs these functions in-house, rather than outsourcing.

Core competencies

The form of business ownership best suited to raising large amounts of money for expansion is the

Corporation

Double taxation means

Corporations pay taxes on their profits. If they distribute after-tax profits to the stockholders, the stockholders also pay taxes on the distribution.

Entrepreneurs seeking financial support from bankers and potential investors should

Create a detailed business plan to help the bankers and investors understand why this business will succeed.

The informal organization of a business is probably best suited to

Create a feeling of camaraderie among employees and encourage teamwork.

The first step toward establishing open communication within an organization is to

Create an organizational culture that rewards listening.

Which term describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?

Culture

Firms that have adopted __________ seek to do more than simply sell a product; they seek to learn as much as possible about their customers in order to satisfy them with goods and services over time.

Customer relationship management

In today's competitive environment, successful businesses are keenly focused on their

Customers.

One way to lessen the U.S. government budget deficit is to

Cut spending.

The statistical study of human population to learn its size, density, and characteristics is called

Demographics

_________ is the systematic write-off of the value of a tangible asset over its useful life.

Depreciation

A very critical last step in the process of establishing an ethics code is

Enforcement.

The last step of the human resource planning system is to

Establish a strategic plan for recruiting, selecting, training, appraising, compensating, and scheduling the labor force.

What represents the value of one nation's currency relative to the currencies of another country?

Exchange rate

In recent years, most countries with communist economic and political systems have

Experienced economic depression.

Rewards in recognition of good work that come from someone else are __________ rewards.

Extrinsic

A bookkeeper's first task is to record the firm's transactions in a journal.

False

A chain of command is a line of authority that moves from the lowest level of the hierarchy to the top.

False

A major advantage of sole proprietorships is that an owner has limited liability for the debts of his or her business.

False

A major problem with the MBO approach is that it provides no way for employees to provide input into the goal-setting process.

False

Absolute advantage is the basis for most global trade today.

False

Accountants do the work involved in recording financial events and transactions, but the actual classifying and interpreting of this data is left to financial managers.

False

Although managers who work for large firms must know something about accounting, people who run small businesses only need to know the basics of bookkeeping.

False

Bureaucratic organizations are structured to empower employees and please customers.

False

Double-entry bookkeeping requires that every transaction be approved by two different people before it can be recorded.

False

Few people today start their own business.

False

Herzberg found that the factors associated with job environment ranked the highest as employee motivators.

False

In a high-context culture, group trust is not required in order to accomplish a task.

False

In capitalist countries, the government decides what to produce and how the goods and services will be produced.

False

Laws that protect us from fraud, theft, and violence determine ethical behavior.

False

Marketing research usually begins with secondary data because it is more accurate and more relevant than primary data.

False

Microeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

False

Most entrepreneurs prefer working for someone else.

False

Objectives should be expressed as broad, general principles rather than as specific short-term results.

False

Online businesses avoid the risk of failure faced by traditional start-up businesses.

False

Revenue, minus cost of goods sold equals

Gross profit

Revenue is the amount a business earns above and beyond what it spends for expenses and costs.

False

Since motivation comes from within an individual, there is little that managers can do to help motivate employees.

False

Stockholders in a corporation accept unlimited liability for the corporation's debts.

False

Successful entrepreneurs are exclusively motivated by the desire to become rich.

False

The first step in creating a promotional campaign is to define the objectives for each element of the marketing mix.

False

The main job of modern managers is to watch over people to be sure they do what the manager asks of them.

False

The tremendous demand for consumer goods and services after World War II helped launch the production era of marketing.

False

Under capitalism, the government prohibits people and businesses from competing with each other.

False

Union rules and company policies make the recruitment process easier because they provide guidelines.

False

One of the hurdles small businesses face when deciding to export is

Financing is often difficult to find.

By comparing the types of skills used by managers at different levels within an organization, which statement is true?

First-line managers use mainly technical and human relations skills, while top managers devote most of their time to activities involving human relations and conceptual skills.

The final step of the selling process involves

Follow up

The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials to secure business contracts is the

Foreign Corrupt Practices Act.

A(n) __________ is an arrangement whereby someone with a proven idea for a business sells the rights to use the business model, to sell a product or service to others in a given territory.

Franchise agreement

A person who buys the right to use a business name and sell a product within a given territory is called a

Franchisee

What is a benefit of owning your own business?

Freedom to keep the profits from your business

After personal savings, the most common source of capital for entrepreneurs is from

Friends and family.

B2B markets tend to be

Geographically concentrated

Empowerment means

Giving employees authority to make decisions

__________ are broad, long-term accomplishments an organization wants to achieve.

Goals

The __________ is the nerve center of the informal organization.

Grapevine

The most important technological change likely to affect the marketing success of many firms is the

Growth of consumer databases, blogs, and social networking sites.

One difference between partnerships and sole proprietorships is that partnerships

Have a greater chance of long-term survival due to the accountability of each partner to the other.

Which statement about home-based work is most accurate?

Home-based work allows workers to choose their own hours and interrupt work for childcare and other tasks, but this freedom and flexibility can create problems for some workers.

Which question can help us avoid a decision that would injure our self-esteem?

How will it make me feel about myself?

Leadership, coaching, and morale building are all part of a manager's __________ skills.

Human relations

_________ is illegally obtaining and illegally using private information about a person, such as using someone's credit card number.

Identity theft

Briefly define the terms "Exporting" and "Importing."

Importing - buying products from another country. Exporting - selling products to another country.

Employers provide tools and technology for their employees in order to

Improve their efficiency and productivity.

Which statement about the B2B market is true?

Industrial buyers are usually large.

_________ refers to a general rise in the price level of goods and services over time.

Inflation

One advantage of free trade is

Innovation for new products occurs which keeps firms competitively challenged.

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their

Integrity and sound business idea.

Accountants record, classify, and __________ the results of the financial information they gather.

Interpret

Insider trading involves

Investors using private company information to further their own fortunes.

What is an advantage of hiring contingent workers?

It is good strategy if the economic climate is uncertain.

For a firm to be considered a multinational corporation, which condition must be true?

It must have manufacturing facilities and a physical presence in several countries.

_________ emphasizes motivating the worker through the characteristics of the job itself.

Job enrichment

A __________ is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.

Joint venture

The accounting book or computer program where each day's transactions are first recorded is called a

Journal

The U.S. economic system relies on

Key economic indicators such as GDP, to measure economic progress.

Laws represent the standards of __________ behavior

Legal

Pre-employment physical examinations are

Legal in some states, but only if given to everyone applying for the position.

When companies owe money to creditors, suppliers, and others, these outstanding amounts are recorded on the balance sheet as

Liabilities

_________ are responsible for directly achieving organizational goals.

Line personnel

A __________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

Market

_________ believed that managers were trustworthy and companies would do well if employees simply did what they were told.

Max Weber

A __________ is two firms combining to form one company.

Merger

Today, the economic systems of most nations could most accurately be classified as

Mixed economies.

Free trade between nations generally results in

Mutually beneficial exchange relationships.

What is a marketing strategy in which the focus is on small but profitable market segments?

Niche marketing

Business incubators are usually government-funded facilities intended to

Offer start-up firms low-cost office space and basic business services.

A(n) __________ would be used by a department manager as a tool for making daily and weekly assignments.

Operational plan

A(n) __________ is a visual device that shows relationships among people and divides the organization's work.

Organization chart

The widely shared values within an organization that provide unity and cooperation to achieve common goals are together known as the

Organizational culture.

Managers who listen to their subordinates and allow them to participate in decision making are using the __________ style of leadership.

Participative

A typical demand curve shows that

People tend to buy more of a good when its price decreases.

_________ refers to the face-to-face presentation and promotion of goods and services. This also includes searching for prospects and providing follow-up services.

Personal selling

Management by objectives was developed by

Peter Drucker

The management function concerned with anticipating future trends and determining the best strategies to achieve an organization's goals and objectives is known as

Planning

Two key management functions that need particular attention when starting a business are

Planning and financing.

If global trade experts predict that the value of the dollar will soon fall, it will result in

Prices of imported goods rising, but prices of U.S. goods sold overseas falling.

The selection process may include a(n) __________, where employment is only guaranteed for a specified period of time, until either a permanent offer is extended or the employee is discharged.

Probationary period

In the past, __________ was an important advertising strategy used in movies. Now it is also used with video games. It can be easily altered to reflect another advertiser, depending upon which advertiser has purchased ad time.

Product placement

__________ refers to the amount of output generated with a given amount of input, e.g., the number of pizzas produced per worker per hour.

Productivity

One aspect of Title VII of the Civil Rights Act of 1964 is that it

Prohibits discrimination based on race, religion, sex, creed, or national origin in matters such as hiring, firing, training, and compensation.

The combination of advertising, personal selling, public relations, and sales promotion activities traditionally used by an organization represents its

Promotion mix.

A __________ tariff is designed to raise the price of imported products so that domestic goods are more competitively priced.

Protective

In today's competitive environment, good value means

Providing quality products and services at competitive prices.

A firm's marketing mix consists of four major components, which are generally referred to as the four

Ps

The goal of __________ is to keep individual customers over time by offering them new products that exactly meet their requirements.

Relationship marketing

A command economic system is characterized by

Reliance on the government to determine what is produced and who gets the output.

One disadvantage of a limited liability company is that it

Requires members' approval to transfer ownership.

What is an advantage of a line organization in a large business?

Responsibility and authority are clearly defined.

_________ is the monetary value that is received for goods sold, services rendered, and money received from other sources.

Revenue

A __________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

Royalty

A(n) __________ analysis is used to help companies evaluate their internal strengths and weaknesses, and develop an awareness of external threats and opportunities.

SWOT

A meaningful mission statement should address topics such as the organization's

Self-concept and company philosophy.

The __________ is usually the easiest form of business to start and end.

Sole proprietorship

The optimum number of subordinates a manager can supervise is referred to as the

Span of control.

_________ involves recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives.

Staffing

An owner of a corporation is known as a

Stockholder

What entity elects the board of directors for a corporation?

Stockholders

Consumer decisions regarding the products they buy are often influenced by their nationality, religion, or ethnic origin. Marketers realize that the consumer decision-making process is impacted by the consumers'

Subcultures.

The level of management that is directly responsible for assigning specific jobs to workers and evaluating their daily performance is called

Supervisory management.

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called

The Service Corps of Retired Executives (SCORE).

The effectiveness of direct mail advertising suffers from

The consumer perception that it is junk mail.

All organizations have two organizational systems, which are

The formal organization and the informal organization.

A job analysis results in two written statements. They are

The job description and the job specification.

Which factor helps determine a manager's span of control?

The level of standardization of the work to be done

What is the main difference between a matrix-style organization model and a cross-functional team?

The matrix model is a temporary arrangement, whereas the cross-functional team is a more long-term arrangement.

Any debts or damages incurred by a firm organized as a sole proprietorship are

The responsibility of the owner.

When creating a job description, the HR manager may include

The specific responsibilities of the job.

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on

The value of what the business owns, what it earns, and what makes it unique.

Employees will perceive that their opinions are more valued if

They're provided settings where employees have the opportunity to converse with all levels of management.

Evidence indicates that the best promotional strategy for firms operating globally is

To uniquely design a strategy for each country.

Since 1975, the United States has had a(n)

Trade deficit

A CEO is often the president of the firm and is responsible for developing the strategic plans.

True

A code of ethics designed to avoid criminal misconduct is an example of a compliance-based ethics code.

True

A firm's financial statements represent a health report regarding the condition of the firm.

True

A joint venture is a partnership in which two or more companies join to undertake a major project. All parties commit financing and risk to the project.

True

A key element of Frederick Taylor's approach was the time-motion study, which examined the tasks performed to complete a job and the time needed to complete each task.

True

A recent business trend is the elimination of layers of management, creating flatter organizations and subsequently, a wider span of control.

True

An advantage of hiring from within is that it improves employee morale.

True

As one of the tools included in a firm's promotion mix, public relations is intended to earn public understanding and acceptance.

True

At the equilibrium price, the quantity consumers desire to buy equals the quantity sellers are supplying.

True

Bartering is the exchange of goods or services for other goods or services without the exchange of money.

True

Businesses provide goods, jobs, and services to others.

True

Compared to sole proprietorships, an advantage of partnerships is their ability to obtain more financial resources.

True

Corporations represent 20% of all the businesses in the United States and earn over 80% of the total U.S. business receipts.

True

Customers learn to trust companies that consistently demonstrate good behavior. Those same companies can lose this position with one socially irresponsible activity.

True

Division of labor refers to deciding how many jobs must be accomplished and then dividing them up amongst the labor force.

True

Employee training focuses on short-term skills, while employee development focuses on long-term abilities.

True

Employees observe behavior, which helps instill standards of right and wrong.

True

Empowerment works only when employees are given the proper training and resources to respond.

True

Entrepreneurship involves accepting the risk of starting and running a business

True

Ethical behavior requires more than following the law.

True

Human resource management is the process of deciding the number and types of employees your business needs, and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals.

True

If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques.

True

In a general partnership, all partners share in management of the business and in the liability for the firm's debts.

True

In the past, foreign companies have adapted to U.S. culture more easily than U.S. firms have adapted to foreign cultures.

True

International trade is not limited to multinational corporations. Small businesses do about one-third of all exporting out of the United States.

True

Line organizations clearly define the lines of authority and responsibility.

True

Managers in progressive organizations tend to emphasize teamwork and cooperation rather than discipline and giving orders.

True

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have a value for customers, clients, partners, and society at large.

True

One challenge faced by today's human resource managers is that workers overseas often work for lower wages and are subject to fewer laws and regulations.

True

Organizing the structure of the company means deciding what jobs need to be done and who is responsible for doing them.

True

Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are.

True

Recent accounting scandals raised serious questions about the legitimacy of an accounting firm performing both auditing and consulting work for the same company.

True

Stakeholders are all the people who stand to gain or lose by the policies and activities of a business.

True

Starting a business is a riskier path toward business success than working your way up the ranks of a large business.

True

Surveys show that a majority of Millennials are willing to agree to lower salaries if they know their employer is participating in socially responsible activities.

True

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

True

The B2B selling process may take a long time before a deal is finalized; therefore, gathering information about the customer before you approach them is critical.

True

The Federal Reserve Bank is responsible for controlling the money supply.

True

The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments.

True

The SWOT analysis helps firms identify competitive threats and market opportunities.

True

The United States' highest trade deficit is with China.

True

The accounting book that provides all the information about a single account in one place is called the ledger.

True

The amount of profit or loss earned by a business can be found by subtracting the firm's expenses from its revenues.

True

The business environment refers to the surrounding factors that either help or hinder the development of businesses.

True

The greed of some businesspeople represents a danger to the operation of a free market system.

True

The idea behind customer relationship management is to enhance customer satisfaction and stimulate long-term customer loyalty.

True

The key financial statements are the balance sheet, the income statement, and the statement of cash flows.

True

The marketing process includes decisions about the best way to get the product to the consumer.

True

Today's progressive organizations are designed around the needs of the customer. The idea is to organize systems to be responsive to customer needs.

True

Today, most companies doing business globally believe it is important for their employees to have experience working in other countries.

True

Trust between workers and managers must be based on a foundation of fairness, honesty, openness, and moral integrity.

True

U.S. business success is largely due to an economic and social climate that allows businesses to operate freely.

True

When developing the promotional campaign for a new product, the first step for a firm is to identify their target market.

True

Herzberg found that an employee's salary

Was a hygiene factor rather than a motivator.

When we compare the factors of production in wealthy versus poor nations, we find

Wealthy nations have knowledge and entrepreneurial opportunities, while poor nations are often lacking in these areas.

Unlimited liability means

When you own your own business you are responsible for all the business debts.