Midterm 3
kinds of bankruptcy
Chapter 7: liquidation and erases debt Chapter 11: restructure and repay Chapter 13: repayment plan personal bankruptcy: can't get rid of government debt
In 2019, how much money was spent on online retailers in the US?
$365 billion
control process
(1) Establish Standards. (2) Monitor Performance. (3) Compare Performance against Standards. (4) Take Corrective Action, If Needed.
Partnership
- A business in which two or more persons combine their assets and skills, often more successful than sole proprietorship - How to distribute assets and when a partner can retire needs to be in partner agreement
Corporation
- A business owned by stockholders who share in its profits but are not personally responsible for its debts - A state-chartered legal entity with authority to act and have liability separate from its owners
Limited Liability Company (LLC)
- A company similar to an S corporation but without the special eligibility requirements - Do not have to submit articles of organization, keep minutes, file written resolutions, hold annual meetings
systematic innovation
- A purposeful and organized search for changes in the environment and then a systematic analysis of the opportunities that such changes might offer the economic and social innovation - Many successful innovations exploit change
intrapreneurship (class)
- A way to stimulate innovation in large, established organizations - Intrapreneur acts as an "inside entrepreneur" who focuses on innovation and creativity while operating within the goals of the environment of an organization
Advantages of going public
- Ability to raise large amounts of capital - Improved corporate image - Improved access to future financing - Attracting and retaining key employees - Using stock for acquisitions - Listing on a stock exchange
Entrepreneurship
- Accepting the risk of starting and running a business - (CLASS) one who creates a new business in the face of RISK and UNCERTAINTY for the purpose of achieving PROFIT and GROWTH by identifying opportunities and assembling the necessary resources to capitalize on them
small business
A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts
dumping
Selling goods in another country below market prices Not legal in US
conceptual skills
Skills that involve the ability to picture the organization as a whole and the relationships among its various parts
Sole Proprietorship
a business owned and managed by a single individual
Corporate Social Responsibility (CSR)
a business's concern for society's welfare
foreign subsidiary
a company owned in a foreign country by another company, called the parent company
Naive Immoralist
one who asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either
reasons why people become entrepreneurs
opportunity, profit, independence, challenge
corporate policy
the position a firm takes on social and political issues
crowdsourcing
the practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people and especially from the online community, rather than traditional employees or suppliers
arbitration
the process or act of resolving a dispute out of court, binding and nonbinding
management
the process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources
strategic planning
the setting of broad, long-range goals by top managers
operational planning
the setting of work standards and schedules
ethics
the standards of moral behavior. Behaviors that are accepted by society as right versus wrong
Licensing, exporting, franchising
the three strategies that require the least amount of commitment and effort for getting involved in global business
balance of trade
the total value of a nation's exports compared to its imports measured over a particular period
trade protectionism
the use of government regulations to limit the import of goods and services
exchange rate
the value of a currency in one country compared with the value in another
types of stock
- Common: Voting rights (proxy). Residual claims to assets - Preferred: No vote, First claim on income (preferred dividend). First claim on assets after debt is paid
Separation of ownership (incorporating) advantages
- Company can raise money from investors - Investors are not involved in day-to-day operations
Disadvantages of going public
- Dilution of founder's ownership - Loss of controlLoss of privacy - Regulatory requirements and SEC reporting - Filing expenses - Accountability to shareholders - Pressure for short-term performance - Loss of focus
Sole Proprietorship Advantages
- Easiest to start - Least regulated - Single owner keeps all the profits - Taxed once as personal income
entrepreneurial process
- Entrepreneurial mindset - Idea - Opportunity analysis - Feasibility analysis - Product - Financial - Business plan - Funding
Incorporating disadvantages
- Extensive paperwork - High initial cost - Double taxation
Initial Public Offering (IPO)
- Firm raises capital by selling stock shares to public for first time - Since 2000, average number of IPOs per year = 211 - Few firms with annual sales < $25M make IPOs
Home-Based Franchises Disadvantages
- Isolation - Long hours
avoiding the pitfalls of failure
- Know your business in depth - Prepare a business plan - Manage financial resources - Understand financial statements - Learn to manage people effectively - Set your business apart from the competition
Disadvantages of Franchising
- Large start-up costs - Shared profit - Management regulation - Coattail effects - Restrictions on selling - Fraudulent franchisors
Leadership vs. Management
- Leaders create a vision, managers create goals - Leaders are change agents, managers maintain the status quo - Leaders take risks, managers control risk - Leaders coach, managers direct
Sole Propietorship Disadvantages
- Limited to life of owner - Equity capital limited to owner's personal wealth - Unlimited liability (could lose personal assets as well as business) - Difficult to sell ownership interest
In addition to the rule of law, governments
- Manage money (monetary policy) - Take money out of markets (taxing consumers) - Put money into markets (government spending) Regulate industries
Advantages of Franchising
- Management and marketing assistance - Personal ownership - Nationally recognized name - Financial advice and assistance - Lower failure rate
characteristics of an entrepreneurial team
- Members have complementary skills and are creative - A group of experienced people - Each from different areas of business
Partnership Advantages
- More capital - Workload shared - Loses shared - Easy to form
Equity Capital (Personal Capital)
- Personal investment of owners in the firm - Called RISK CAPITAL because investors assume risk of losing money if business fails - Does not have to be repaid with interest - Entrepreneur must GIVE UP some ownership to outside investors
Angels (class)
- Private investors in emerging start-ups in exchange for equity stakes - Fastest growing segment of small business capital market - 234,000 angels invest $25.6B per year in 51,000 small companies
Home-Based Franchises Advantages
- Relief from commuting stress - Extra family time - Low operating costs
common causes of small business failure
- Starting with too little capital - No experience in that business or industry - Underpricing or overpricing goods or services
attributes of conventional corporation
- State chartered - Legal entity - Corporate liability is separate from owners
personal savings
- The first place an entrepreneur should look for money. - The most common source of equity capital for starting a business
ethical dilemmas occur when
- There is no agreement over what the accepted principles are - None of the available alternatives seem ethically acceptable
Characteristics of Entrepreneurs (class)
- Willingness to take initiative - Preference for moderate risk - Confidence in ability to succeed - Reliance - Perseverance - Desire for immediate feedback - High energy - Competitiveness - Future orientation (serial entrepreneurs) - Skilled at organizing - Value achievement over money
business plan
- a document that outlines a proposed firm's goals, the strategy for achieving them, and the metrics for success - the more money a firm in asking for, the longer the business plan will be
marketing section
- defines the strategy for identifying the target market, and how to reach them through integrated marketing efforts - types of customers, amount of foot traffic, socioeconomic factors, location-specific product
management section
- describes the specialized qualifications for the firm and the managers they plan to hire - includes organizational chart to show how the managers will work together
Advantages of tariffs
- increase gov revenue - provide protection to domestic producers against foreign competitors by increasing cost of imported foreign goods - force consumers to pay more for certain imports - pro-producer and anti-consumer, reduce overall efficiency of world economy
Four Management Functions
- planning, organizing, leading, controlling - not steps, occur simaltaneously
Feasibility Analysis
- the process of determining if a business idea is viable (should we proceed with this business?) - screens out ideas that lack potential for building a successful business BEFORE resources are committed
Organization's Culture
- the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceives, thinks about, and reacts to its various environments - de-emphasizes ethics and considers primarily economic consequences
innovation
- tool of entrepreneurs, exploit change to create business/service - Entrepreneurs understand innovation process
legal section
- whether the company will organize their business as a sole proprietorship, partnership, or corporation - lists required licenses, permits, and insurance
Freemium Model
-Free + premium business model -Provides the basic features free of charge -Users pay for premium services - Such as advanced features or add-ons Examples: - Software trials with an option to buy
rational decision making model
1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Decide which alternative is best 5. Do what is indicated 6. Determine whether the decision was a good one and follow up (number 6 is usually not done)
two functions of a business plan
1. Guiding company by charting its future course and defining its strategy 2. Attracting lenders and investors who will provide capital
Three levels of ethical standards
1. It is not about the law 2. Organizational policies and procedures 3. The moral stance employees take when faced with decisions not governed by formal rules
Two reasons why franchises are attractive to minorities
1. Provide personal ownership of a business 2. Some offer financial support to aspiring business owners
What percent of US adults have considered starting their own business?
72%
What percent of the US population is trying to start a business?
10%
Top 10 reasons a business fails
10. Declining market 9. Lack of succession plan 8. Dysfunctional management 7. Operational inefficiencies 6. Operational mediocrity 5. Lack of cash cushion 4. Poor accounting 3. Out-of-control growth 2. Owners who can't get out of their own way 1. The math just doesn't work
What percentage of all retail sales in the US are online?
12%
bad decision making
44% of lawyers recommend NOT pursuing a career in lawH 40% of senior level hires are pushed out, fail, or quit within 18 month 83% failed to create ANY value for shareholders
Patent Trolls
A company or person that acquires a lot of patents without the desire to actually develop the products
franchising
A contractual agreement whereby someone with a good idea for a business sells others the rights to use the name and sell a product/service in a given territory in a specified manner
patent
A document that gives inventors exclusive rights to their inventions for 20 years.
trade surplus (favorable balance of trade)
A favorable balance of trade; export more than you import
trade secret
A formula, device, idea, process, or other information used in a business that gives the owner a competitive advantage in the marketplace Ex: Coca Cola recipe
licensing
A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty). offers the least amount of commitment, control, risk, and profit potential
entrepreneurial team
A group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product
staffing
A management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives
joint venture
A partnership in which two or more companies (often from different countries) join to undertake a major project
apprentice
A person who works for another in order to learn a trade
SWOT analysis
A planning tool used to analyze an organization's Strengths, Weaknesses, Opportunities, and Threats (planning tool)
common market
A regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. An example is the European Union.
patent (class)
A set of exclusive rights, typically 20 years, granted to an inventor or assignee for a limited period of time in exchange for detailed public disclosure of an invention. An invention is a solution to a specific technological problem and is a product or a process. Patents are a form of intellectual property.
Tariff Rate Quota (TRQ)
A two-level tariff which imposes a lower tariff rate on a given volume of imports and a higher tariff rate on all subsequent imports
S corporation
A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships
breach of contract
A violation of a valid contract where the injured party goes to court to enforce contract and (sometimes) collect damages
agency
Acts on behalf of another (in other's interest)
NAFTA (North American Free Trade Agreement)
Allows open trade between the US, Mexico, and Canada.
franchise agreement
An arrangement whereby 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
copyright (class)
An exclusive right that protects the creators of original works of authorship such as literary, dramatic, musical, and artistic works Copyrighted material is denoted by the Ósymbol
trade deficit
An unfavorable balance of trade; occurs when the value of a country's imports exceeds that of its exports.
crowdfunding
Asking a group of people, most often online, to donate money and be financially involved in a new venture
What can a judge do about a breach of contract?
Award damages, cancel a contract, or direct a party to do or not to do an act
CAFTA
Central American Free Trade Agreement
financial feasibility analysis
Capital requirements - Estimate of start-up capital required to launch Estimated earnings - Forecasted income statements Return on investment - Combining above two estimates to determine how much investors can expect their investments to return
decision making
Choosing among two or more alternatives
managers' roles today
Collaborative Emphasize teams, team building Guide, train, support, motivate, and coach employees ~Skilled communicators~ Team players Globally prepared
merger
Combination of two or more companies into a single firm
How will globalization impact US businesses?
Concerns for product safety Increased competition Loss of jobs in manufacturing
Causes of the Enron Problem
Conflict of interest Lack of attention Lack of truthfulness Enron's culture
environmental degradation
Directly or indirectly take actions that result in environmental harm
types of corporations
Domestic: Operate in state in which it is incorporated Foreign: Operate in states other than state of incorporation Alien: Organized in one country and operate in another
Nike
During the 1990's, this multinational corporation came under scrutiny for child labor in its supply chain
intervention
Ensure fair competition, private property, freedom of choice, right to keep profits Promote economic health, social responsibility Correct market failures, ethical lapses
micropreneur
Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle
trial courts: dispute is first heard
Fed = US district State = circuit superior = common pleas specific state courts = probate or small claims
cross-industry agencies
Federal Trade Commission - FTC - False and deceptive advertising and promotion Consumer Product Safety Commission - CPSC Occupational Safety & Health Administration - OSHA Equal Employment Opportunity Commission - EEOC Environmental Protection Agency - EPA
debt financing
Financing that must be repaid with interest - SBA: Lenders make $600B in loans of less than $1M to small companies each year - Can be difficult to secure - Can be expensive
Knowledge Management (KM)
Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm
industry specific agencies
Food and Drug Administration - FDA Interstate Commerce Commission - ICC Federal Communications Commission - FCC Federal Energy Regulatory Commission - FERC Federal Aviation Administration - FAA Federal Highway Administration - FHA Securities and Exchange Commission - SEC
failure statistics
For every 3,000 product machines: - 4 make it to the development stage - 2 are actually launched - 1 becomes a success in the market
negotiable instruments
Forms of commercial paper (such as checks) that are transferable among businesses and individuals and represent a promise to pay a specified amount
Negligence
In tort law, behavior that causes unintentional harm or injury.
deregulation
Government withdrawal of certain laws and regulations that seem to hinder competition.
effective managers and leaders...
Hire the right employees and constantly improve their skills Build a culture and structure that enables the firm to reach its potential Communicate the shared vision and values and cultivate an environment of trust Motivate workers to high performance levels
customer relationships
How does a company get, keep, and grow customers? (CRM) easiest customer to keep is the customer you already have
revenue model
How does the company make money from each customer segment?
venture capitalist
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses
autocratic leadership
Leadership style that involves making managerial decisions without consulting others Effective in emergencies and training new, unskilled workers
advantages of small business
More personal customer service and the ability to respond quickly to opportunities
Self-Dealing
Managers feather their nest with corporate monies
CSR objectives
Maximize positive societal impact Minimize negative societal impact Act in the company's best interest for profit
Where do CEOs come from?
Most from inside the company and working their way up
opportunistic exploitation
Of other players in the value chain in which the firm is embedded
acquisition
One company's purchase of the property and obligations of another company
Bernie Madoff
Operated largest Ponzi scheme in American history., famous for the Ponzi Scheme in which he took billions from his investors; responsible for largest criminal conspiracy in history; life sentence
three organizing tasks
Organizing places employees and resources where they will be effective in achieving the organization's goals Organizing creates an organization chart showing lines of responsibility and authority Organizing designs the structure of the organization
How many businesses are founded in the US each year?
Over 6 million
Separate ownership from management
Owners/stockholders select Board of Directors, Board hires officers of corporation, officers hire managers, managers hire employees
product liability
Part of tort law that holds businesses liable for harm that results from the production, design, sale, or use of products they market.
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
Passed to reduce the total number of bankruptcy filings and to eliminate the perceived ease of filing
patent vs. trade secret
Patent -Limited in time (20 years) -Registration costs -Immediate effect -Requires compliance Trade Secret -Others may be able to reverse engineer -If discovered, anyone may use it -More difficult to enforce -May be patented by someone else
How does Apple have such unique, sleek designs?
Patents. Patented Apple Pencil for unique technology, as well as rectangle with ROUNDED corners (distinct rounded corners of iPad design), pinch and zoom
sources of equity financing
Personal savings Friends and family Angel investors Partners Corporations Public stock sale
problems with business
Power of business vs. consumer Actions of business vs. consumer Public reaction Government's reaction
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 US goods sold overseas falling
leadership
Process of influencing and inspiring others to work to achieve a common goal and giving them the power and freedom to achieve it
problem solving
Process of solving the everyday problems that occur Less formal than decision making Quicker action
What is the situation now?
SWOT analysis
enterprise zones
Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support
objectives
Specific, short-term statements detailing how to achieve the organization's goals
Partnership agreement
Spell out the requirements of terminating a partnership
How can we get to our goal from here?
Strategic planning --> Tactical planning --> Operational planning --> Contingency planning
responsible management of human resources
Studies have shown that what most influences a company's effectiveness and financial performance is _________.
A Business Plan (class)
Systematic evaluation of a venture's chances for success Determine the risks facing a venture Game plan for managing business successfully Tool for comparing actual and target results Tool for attracting capital "Road map" for the venture
absolute advantage
The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries
goals
The broad, long-term accomplishments an organization wishes to attain
Customer Acquisition Cost (CAC)
The cost of acquiring new paying clients satisfied customers = best advertising
Fiduciary Responsibility
The legal duty of a representative to manage property in the interest of the owner/stockholders
bad apple
The notion that blame for unethical behavior rests with a few unsavory individuals (difficult for organizations to influence ethical decision making)
unlimitied liability
The owner(s) are personally and fully responsible for all losses and debts of the business
opportunity analysis
The process of examining new business opportunities to improve organizational performance - Areas of focus: 1. Determine how attractive an industry is overall as a "home" for a new business 2. Identify possible niches a new entrant can occupy profitably
Alternative Dispute Resolution (ADR)
The resolution of disputes in ways other than those involved in the traditional judicial process. Negotiation, mediation, and arbitration are forms of ADR. - Court is EXPENSIVE
Bribery Influence-peddling
Top officials in countries like Japan, South Korea, and China have faced legal charges in what two areas?
number of trademarks in US and examples
Trademarks can also cover symbols, shapes, colors, and sounds - all part of a firm's "trade dress" - Ex sounds: MGM lion roar, NBC jingle, Intel's five note ding, etc. - Ex visual: Apple, Microsoft, etc. An estimated 1.5 million trademarks are registered in U.S.
The US has around $12 billion dollars of media time
True
socialism
U.S. economist Milton Friedman believed that the only social responsibility of the corporation was to its stockholders. He also believed anything other than that would be considered __________.
Foreign Corrupt Practices Act
U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions
what countries are in CAFTA?
United States El Salvador Nicaragua Costa Rica Honduras Guatemala Dominican Republic
Ethical Sourcing
Using materials, components and services from suppliers that respect the environment, treat their workforce well and generally trade with integrity
bad barrel
Views that people are not inherently ethical or unethical, but are influenced by the corporate culture surrounding them
cost structure
What are the costs to operate the business model?
key resources
What are the most important assets required to make the business model work? finance, physical, intellectual, human
Key Activities
What are the most important things the company must do to make the business model work? - Production - Problem solving - Supply chain management
cottail effect
What happens to your franchise if other franchises fail
Greed
What motivated the unethical behavior of real estate agents, lenders, and borrowers that led to the financial crisis of 2008
Key Partnerships
Who are the key partners and suppliers needed to make business model work? - What key resources are we acquiring from them? - What key activities do they perform?
cooperative (co-op)
a business owned and controlled by the people who use it - producers, consumers, or workers with similar needs who pool their resources for mutual gain
contract manufacturing
a foreign company's production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing
a market
a group of buyers and sellers of a particular good or service
contract
a legally enforceable agreement between two or more parties
World Trade Organization (WTO)
a permanent global institution to promote international trade and to settle international trade disputes
Sustainability
a product's or company's ability to exist without harming the environment
warranty
a promise made by a seller about the quality or performance of goods for sale
consumerism
a social movement that seeks to increase and strengthen the rights and powers of buyers in relation to sellers
social audit
a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs
tariff
a tax levied on imports, raising the cost of imported products relative to domestic products
communication
a two-way exchange in which the receiver understands the message in the same way the sender intended
angel investor
a wealthy private investor who provides capital for a business start-up
tort
a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability.
business ethics
accepted principles of right or wrong governing the conduct of business people
Customer Relationship Management (CRM)
acquire new customers retain existing customers upsell to existing customers
anticompetitive behavior
actions aimed at harming actual or potential competitors
vision
an encompassing explanation of why an organization exists and where it is trying to go
mission statement
an outline of the fundamental purposes of an organization
trademark (class)
any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods on the market. A trademark is noted by the symbol ®
examples of torts
assault, slander, libel, product liability, fraud
copyright
authors have exclusive rights to documents
contingency planning
backup plans in case primary plans fail
ethocentricity
belief that one's own ethnic group or culture is superior to that of others
Problem solving techniques
brainstorming and PMI
incubators
centers that offer new businesses low-cost offices with basic business services
top management
chief executive officer, chief operations officer, chief financial officer, president, vice president, general managers, division heads
ethical dilemma
choose between two equally unsatisfactory alternatives
corruption
companies pay bribes to gain access to lucrative business contracts
contract law
contracts and breaches of contracts
external customers
dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use
hurdles in global markets
dealing with differences in sociocultural forces, economic and financial forces, legal and regulatory forces, and physical and environmental forces
bylaws
describe how the corporation is to be operated from both legal and managerial points of view
executive summary
describes business, marketing potential, competitive advantage
business model
describes the rationale of how an organization creates, delivers, and captures VALUE 1. Value Proposition 2. Customer Segments 3. Channels 4. Customer Relationships 5. Revenue Streams 6. Key Resources 7. Key Partners 8. Key Activities 9. Cost Structure
financial section
details expected annual revenue, monthly cash flow, and profitability timeline
manufacturing section
details the equipment and staff the firm will need as well as how they'll handle inventory and quality control
criminal law
dispute between government and individual punishment: fines and/or imprisonment
civil law
dispute between two individuals punishment: fines
appellate courts
dispute heard again from lower court
information manipulation
distort or hide information to enhance their personal situation
leaders
embrace and manage change establish corporate values and ethics
empowerment
employees are given the authority to make a decision and the responsibility to respond quickly to customer requests
managers
employees who get things done using an organization's financial resources, information, equipment, and workers
statutory law
enacted by a federal or state legislature
integrity-based ethics codes
ethical standards that define the organization's guiding values, create an environment that supports ethically sound behavior, and stress a shared accountability among employees
compliance-based ethics codes
ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers
Personal Property
everything that is not real property (tangible and intangible, including intellectual)
Elements of a business plan
executive summary, introduction, marketing, manufacturing, management, legal, financing
positive balance of trade (trade surplus)
exports greater than imports
Federal Trade Commission
false and deceptive advertising and promotion
limited liability
financial responsibility of business owners only for what they invested in a business
Angels can be ideal when...
firm has outgrown capacity of friends and family but still too small to attract venture capital
Uniform Commercial Code (UCC)
first published in 1952, the UCC seeks to "harmonize" the law of commercial transactions in all 50 states. The UCC addresses such topics as: Warranties - Express: Specifically defined by the seller - Implied: Legally imposed on seller/disclaimed
fraud
form of tort, where someone "hurts" another by deception or manipulation Something said or done in a dishonest way
Mercosur (Common Market of the South)
free trade within, and a common external tariff for, Argentina, Brazil, Paraguay, and Uruguay, since 1994; accounts for 70 percent of South America's total economy
control
function of management that measures performance relative to the planned objectives and standards, rewards people for work well done, and takes corrective action when necessary
antitrust law
governing competitive behavior
tort laws
governing product liability
customer segments
groups of people who share similar needs and thus are likely to desire the same features in a product your customers do not exist to buy, you exist for them
managers...
guide, train, support, motivate, and coach employees rather than telling them what to do
channels
how are you going to get the product to the customer? channels of distribution
2005 personal bankruptcy law
include requiring people with income at certain levels to pay some or all of their financial obligations
corporate philanthropy
includes charitable donations
Whistleblower
insider who reports illegal or unethical behavior
intellectual property
intangible creative work that is embodied in physical form and includes copyrights, trademarks, and patents
securities law
issuing and selling securities
common law
judges establish when deciding disputes, set by precendent
bankruptcy
legal nonpayment of financial obligation relieved of those debts by a court Primary Purposes: - Give an honest debtor a "fresh start" in life by relieving the debtor of most debts - Repay creditors in an orderly manner to the extent that the debtor has property available for payment.
Elements of a Contract
legal purpose, consideration, voluntary agreement
Advantages of Licensing
low development costs and risks
planning
management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives
unintentional tort
negligence
Mediation
negotiation to resolve differences conducted by some impartial party, nonbinding
General Proprietorship
partnership in which partners share equally in both responsibility and liability
Freud Triangle
pressure, opportunity, rationalization
Sherman Antitrust Act of 1890
prevent large organizations from stifling the competition of smaller or newer firms
genericized trademark
primary meaning of the genericized trademark becomes the product or service itself
outsourcing
process of contracting the production of goods to an overseas company
intellectual property law
protection of intellectual property
Export Assistance Centers (EACs)
provide hands-on exporting assistance and trade-finance support for small and medium-sized businesses that wish to directly export goods and services
value proposition development
question assumptions, get out of the building, iterate through learning
Real Property
real estate and anything attached to it
types of property
real property and personal property
industry regulation
regulations and rules that govern the business practices and procedures of specific industries, businesses, and professions
administrative law
regulations passed by state and federal administrative agencies
functions included in staffing
retaining, hiring, recruiting
ethical issues
self-dealing, information manipulation, anticompetitive behavior, opportunistic exploitation, substandard working conditions, environmental degradation, corruption
entrepreneurial
self-directed, self-nurturing, action-oriented, highly energetic, tolerant of uncertainty
exporting
selling products to another country
Corporate Strategy
sets long-term direction for the total enterprise
human relations skills
skills that involve communication and motivation; they enable managers to work through and with people
technical skills
skills that involve the ability to perform tasks in a specific discipline (such as selling a product or developing software)
_________ businesses account for about 1/3 of the US exports.
small
Intrapreneur
someone who works inside an existing organization as an entrepreneur
slander
spoken defamation
managers
strive to produce order and stability carries out vision of company
trademark
symbols used by firms to identify
threats to trading globally
terrorism, rogue states, income inequality
threats to the future of global trade
terrorism, rogue states, nuclear proliferation
comparative advantage
the ability to produce a good at a lower opportunity cost than another producer
absolute advantage
the ability to produce a good using fewer inputs than another producer
Horizontal Acquisition
the acquisition of a company competing in the same industry as the acquiring firm
Foreign Direct Investment (FDI)
the buying of permanent property and businesses in foreign nations
horizontal merger
the combination of two or more firms competing in the same market with the same good or service
vertical merger
the combination of two or more firms involved in different stages of producing the same good or service
balance of trade
the difference between a country's total exports and total imports
corporate responsibility
the dimension of social responsibility that includes everything from hiring minority workers to making safe products
tactical planning
the identification of specific, short-range objectives by lower-level managers
conglomerate merger
the joining of firms in completely unrelated industries
private enterprise
the market turns self-interest into social good requires: - Private property - Freedom of choice - Right to keep profits - Fair competition
free trade
the movement of goods and services among nations without political or economic barriers
Friedman Doctrine
the only social responsibility of business is to increase profits, so long as the company stays within the rules of law
Mission Statement Components
the organization's self-concept its philosophy long-term survival needs customer needs social responsibility nature of the product or service
comparative advantage theory
theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently
friends and family
those most likely to invest, inherent dangers GEM study: - Average family/friends' investment in start up = $27,715
B Corps & Benefit Corps
through products, practices, and profits, businesses should aspire to do no harm and benefit all Ex. Patagonia 3P approach: people, planet, profit
Contractual Capacity
to be a legal contract, the parties must have a legal ability to enter into the contract -- they must have contractual capacity Individuals that lack contractual capacity: - Minors (under the age of 18) - Mentally unstable, mentally incapable, or insane - Intoxicated - Under duress or coercion
key responsibility of legislators in a free market system
to pass laws that promote competitive and fair business practices
Who does strategic planning?
top management
intentional tort
tort in which the defendant means to commit the injurious act
ASEAN (Association of Southeast Asian Nations)
trading bloc of 10 countries in Southeast Asia
substandard working conditions
underinvest in working conditions or pay below market wages
value proposition
what can the product do for you? (features) solving the customer need
libel
written defamation
