UAB BUS 102 - Test 1 Study Guide - Chapters 1-5 (Elizabeth Turnbull)

Bias

a preconception about members of a particular group. Common forms of bias include: gender, age, race, ethnicity, and nationality

Ethics

a set of beliefs about right and wrong, good and bad

Business Technology

any tools - especially computers, telecommunications and other digital products - that businesses can use to become more efficient and effective

Loss

when a business incurs expenses that are greater than its revenue

Direct Investment

when firms either acquire foreign firms or develop new facilities from the ground up in foreign countries, Also known as foreign direct investment

Joint Ventures

when two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities

Embargo

a complete ban on international trade of a certain item, or a total halt in trade with a particular nation

Infrastructure

a country's physical facilities that support economic activity

Social Audit

A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals

The Marketing Era

After World War II, consumers began to gain power. As goods and services flooded the market, the marketing concept emerged: a consumer-first orientation as a guide to business decision making.

Natural resources

All inputs that offer value in their natural state, such as land, fresh water, wind, and mineral deposits. The value of natural resources tends to rise with high demand, low supply, or both.

Ethical Dilemma

A decision that involves a conflict of values; every potential course of action has some significant negative consequences

Code of Ethics

A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations

Create and deliver successful verbal presentations

A great presentation begins with a hook that draws your audience in and engages their attention. The body of the presentation typically focuses on three key points, supported by credible information and persuasive arguments. The close summarizes the key points and often refers back to the opening hook. Dynamic delivery is simply a matter of practice, with a focus on knowing your material.

Economy

a financial and social system of how resources flow through society, from production, to distribution, to consumption

Consumer Price Index (CPI)

a measure of inflation that evaluates the change in the weighted-average price of goods and services that the average consumer buys each month

Write more effective business memos, letters, and emails

Begin with the needs of your audience; their anticipated response should drive the structure of your writing. Determine the bottom line of your communication, and be sure to deliver it up front. Your message itself should have a natural tone and must be completely free of grammatical errors.

Corporate Responsibility

Business contributions to the community through the actions of the business itself rather than donations of money and time

The free market system and the supply and demand relationship

Capitalism, also known as the free market system, is based on private ownership, economic freedom, and fair competition. In a capitalist economy, individuals, businesses, or nonprofit organizations privately own the vast majority of enterprises. As businesses compete against each other, quality goes up, prices remain reasonable, and choices abound, raising the overall standard of living. / The interplay between the forces of supply and demand determines the selection of products and prices available in a free market economy. Supply refers to the quantity of products that producers are willing to offer for sale at different market prices at a specific time. Demand refers to the quantity of products that consumers are willing to buy at different market prices at a specific time, According to economic theory, markets will naturally move toward the point at which supply and demand are equal: the equilibrium point.

Compare, contrast, and choose effective communication channels

Communication channels differ significantly in terms of richness: the amount of information that they offer the audience. The spectrum ranges from written communication at the low-end to face-to-face meetings at the high-end. The best choice depends on your objective, your message, and your audience. To ensure that your communication achieves your goals, always consider the needs and expectations of your audience. If you tailor each message with the audience in mind, you'll give yourself a competitive edge in terms of the time, attention, and response of your audience.

Analyze strategies for reaching global markets

Firms can enter global markets by developing foreign suppliers, foreign customers, or both. Two strategies for acquiring foreign suppliers are outsourcing and importing. Key strategies for developing foreign markets include exporting, licensing, franchising, and direct investment. Exporting is relatively low cost and low risk, but it offers little control over the way the business unfolds. Direct investment, at the other end of the spectrum, tends to be high cost and high risk, but it offers more control and higher potential profits.

The Entrepreneurship Era

During the second half of the 1800s, large-scale entrepreneurs emerged, building business empires that created enormous wealth, but often at the expense of workers and consumers.

The elements of the environment that affect a business

Economic environment: In late 2008, the United States economy plunged into a deep financial crisis. The value of the stock market plummeted, companies collapsed, and the unemployment rate soared. The president, Congress, and the Federal Reserve took unprecedented steps - including a massive economic stimulus package - to encourage a turnaround. / Competitive environment: As global competition intensifies, leading-edge companies have focused on long-term customer satisfaction as never before. / Technological environment: The recent digital technology boom has transformed business, establishing new industries and burying others. / Social environment: The United States population continues to diversify. Consumers are gaining power, and society has higher standards for business behavior. Sustainability has become a core marketplace issue. / Global environment: The United States economy works within the context of the global environment. The worldwide recession has dampened short-term opportunities, but China and India continue their rapid economic development.

Explain the importance of excellent business communication

Effective communication happens when relevant meaning is transmitted from the sender to the receiver. Skillful communicators save time and money, and develop deeper, more trusting relationships with their colleagues. Anything that interferes with the correct transmission of your message is a barrier to communication. Barriers can be physical, verbal, nonverbal, cultural, perceptual, or organizational. To communicate effectively, you should be able to identify and surmount any barriers that stand between you and your audience. The result? Greater chance of long-term success in every aspect of business.

Entrepreneurship

Entrepreneurs take the risk of launching and operating their own business. Entrepreneurial enterprises can create a tidal wave of opportunity by harnessing the other factors of production.

Discuss how ethics relates to both the individual and the organization

Ethical choices begin with ethical individuals. To help people make good choices, expert have developed frameworks for reaching ethical decisions. While the specifics vary, the core principles of most decision guides are similar: Do you fully understand each dimension of the problem? Who would benefit? Who would suffer? Are the alternative solutions legal? Are they fair? Does your decision make you comfortable a "gut feel" level? Could you defend your decision on the nightly TV news? Have you considered and reconsidering your responses to each question? While each person is responsible for his or her own actions, the organization can also have a dramatic influence on the conduct of individual employees. An ethical culture - which includes ethical leadership from top executives, and accountability at every level of the organization - has an outsized impact on individual conduct. But formal ethics programs also play a crucial role. A written code of ethics - a document that lays out the values and priorities of the organization - is the cornerstone of a formal ethics program. Other key elements include ethics training and a clear enforcement policy for ethical violations.

Human resources

The physical, intellectual, and creative contributions of everyone who works within an economy. Education and motivation have become increasingly important as technology replaces manual labor jobs.

Factors of Production

Four fundamental elements - natural resources, capital, human resources, and entrepreneurship - that businesses need to achieve their objectives

The Industrial Revolution

From the mid 1700s to the mid-1800s, technology field a period of rapid industrialization. Factory spring up and cities, leading to mass production and specialization of labor.

The Production Era

In the early 1900s, major businesses focused on further refining the production process, creating huge efficiencies. The assembly line, introduced in 1913, boosted productivity and lowered cost.

Describe how companies evaluate their efforts to be socially responsible

Many companies - even some entire industries - monitor themselves. The process typically involves establishing objectives for ethics and social responsibility and then measuring achievement of those objectives on a systematic, periodic basis. Other groups play watchdog roles as well. Key players include activist customers, investors, unions, environmentalist, and community groups.

Producer Price Index (PPI)

a measure of inflation that evaluates the change over time in the weighted-average wholesale prices

Describe the tools for measuring international trade

Measuring the impact of international trade on individual nations requires a clear understanding of balance of trade, balance of payments, and exchange rates. 1) Balance of trade: the basic measure of the difference between a nation's exports and imports 2) Balance of payments: a measure of the total flow of money into or out of a country, including the balance of trade, plus other financial flows, such as foreign loans, foreign aid, and foreign investments 3) Exchange rates: the measure of the value of one nation's currency relative to the currency of other nations. The exchange rate has a powerful influence on the way global trade affects both individual nations and their trading partners

Discuss barriers to international trade and strategies to surmount them

Most barriers to trade fall into the following categories: sociocultural differences, economic differences, and legal/political differences. Each country has a different mix and barriers. Often countries with the highest barriers have the least competition, which can be a real opportunity for the first international firms to break through. The best way to surmount trade barriers is to cultivate a deep understanding of a country before beginning business. And since conditions change rapidly in many nations, learning am responding our continual processes.

Discuss the role of nonprofit organization in the economy

Nonprofit organizations often work hand-in-hand with business to improve the quality of life in our society. Nonprofits our business like establishments that contribute to economic stability and growth. Similar to businesses, nonprofit generate revenue and incur expenses. Their goal is to use any revenue above and beyond expenses to advance the goals of the organization, rather than to make money for its owners. Some non-profits - such as museums, schools, and theatres - can act as economic magnets for communities, attracting additional investment.

Describe the free trade movement and discuss key benefits

Over the past two decades, The emergence of regional trading blocs, common markets, and international trade agreements has moved the world economy much closer to complete free trade. Key players include: General Agreement on Tariffs and Trade (GATT) and the World Trade Agreement (WTO), The World Bank, The International Monetary Fund (IMF), The North American Free Trade Agreement (NAFTA), The European Union (EU)

Exchange rates

a measurement of the value of one nation's currency relative to the currency of other nations

Tools that are used to evaluate economic performance

Since economic systems are so complex, no single measure captures all the dimensions of economic performance. But each measure yields insight on overall economic health. 1) Gross domestic products (GDP) 2) Unemployment rate 3) Business cycle 4) Inflation rate 5) Productivity

Explain the role of social responsibility in the global arena

Social responsibility becomes more complex in the global arena, largely due to differences in the legal and cultural environments. Bribery and corruption are key issues, along with concern for human rights environmental standards.

Discuss the role of business in the economy

Successful businesses create wealth, which increases the standard of living for virtually all members of society.

Explain the evolution of modern business

The 5 distinct eras of United States businesses: industrial revolution, entrepreneurship era, production era, marketing era, and relationship era

Business Ethics

The application of right and wrong, good and bad, in a business setting

Explain the key reasons for international trade

The benefits of international trade for individual firms include access to factors of production, reduced risk, and an inflow of new ideas from foreign markets. Overall, industries tend to succeed on a global basis in countries that enjoy a competitive advantage. A country has an absolute advantage in a given industries when it can produce more of a good than other nations, using the same amount of resources, and a country has a comparative advantage when it can make products at a lower opportunity cost than other nations. Unless they face major trade barriers, the industries in any country tend to produce products for which they have a comparative advantage.

The core factors of production

The four factors of production are the fundamental resources that both businesses and nonprofits used to achieve their objectives. Natural resources, capital, human resources, and entrepreneurship

Describe the key elements of nonverbal communication

The key element of nonverbal communication include eye contact, tone of voice, facial expressions, gestures, and posture. Studies suggest that, on average, only 7% of meaning during face-to-face communication comes from the verbal content of the message, which magnifies the importance of every element of nonverbal communication. Active listening also plays an influential role. The starting point is empathy: a genuine attempt to understand and appreciate the speaker. You should signal your focus to the speaker through verbal cues, such as "I understand your point", and nonverbal cues, such as nods, eye contact, and leaning forward. The result will be better relationships and better information for you.

Capital

The manmade resources that an organization needs to produce goods or services. The elements of capital include machines, tools, buildings, and technology.

Social Responsibility

The obligation of a business to contribute to society

Quality of Life

The overall sense of well-being experienced by either an individual or a group

Choose the right words for effective communication

The right words can make the difference between a message your audience absorbs and a message your audience ignores. Keep these considerations in mind: analyze your audience, be concise, avoid slang, avoid bias, and use the active voice

Communication

The transmission of information between a sender and a recipient

Communication Channels

The various ways in which a message can be sent, ranging from one-on-one in-person meetings to internet message boards

World Trade Organization (WTO)

a permanent global institution to promote international trade and to settle international trade disputes

Business trends that impact careers

With automation picking up speed, many traditional career choices have become dead ends. But some things - including empathy, creativity, change management, and great communication - can't be digitized. Having these skills can provide you with personal and financial opportunity.

The Relationship Era

With the technology boom in the 1900s, businesses began to look beyond the immediate transaction, aiming to build a competitive edge through long-term customer relationships.

Balance of Trade

a basic measure of the difference in value between a nation's exports and imports, including both goods and services

Define ethics and explain the concept of universal ethical standards

a set of beliefs about right and wrong, good and bad. Who you are as a human being, your family, and your culture all play a role in shaping your ethical standards. The laws of each country usually set minimum ethical standards, but truly ethical standards typically reach beyond minimum legal requirements. Despite some significant cultural and legal differences, people around the globe tend to agree on core values, which can serve as a starting point for universal ethical standards across a wide range of situations: trustworthiness, respect, responsibility, fairness, caring, and citizenship.

Foreign Franchising

a specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements

Economic System

a structure for allocating limited resources

Partnership

a voluntary agreement under which two or more people act as co-owners of a business for profit

Corporate Philanthropy

all business donations to nonprofit groups, including money, products, and employee time

Strategic Alliance

an agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses; typically involves less formal, less encompassing agreements than partnerships

Communism

an economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government

Capitalism

an economic system - also known as the private enterprise or free market system - based on private ownership, economic freedom, and fair competition

Socialism

an economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare

World Bank

an international cooperative of 188 member countries, working together to reduce poverty in the developing world

International Monetary Fund (IMF)

an international organization of 188 member nations that promotes international economic cooperation and stable growth

General Agreement on Tariffs and Trade (GATT)

an international trade treaty designed to encourage worldwide trade among its members

Stakeholders

any groups that have a stake - or a personal interest - in the performance and actions of an organization

Noise

any interference that causes the message you send to be different from the message your audience understands

Business

any organization or activity that provides goods and services in an effort to earn a profit

Active Listening

attentive listening that occurs when the listener focuses his or her complete attention on the speaker

Foreign Licensing

authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area

E-commerce

business transactions conducted online, typically via the internet

Nonprofits

business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain

Importing

buying products domestically that have been produced or grown domestically

Intercultural Communication

communication among people with differing cultural backgrounds

Nonverbal Communication

communication that does not use words. Common forms of nonverbal communication include gestures, posture, facial expressions, voice, and eye contact

Foreign Outsourcing

contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production, Also known as contract manufacturing

Sociocultural Differences

differences among cultures in language, attitudes, and values

Sustainable Development

doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs

Mixed Economies

economies that embody elements of both planned and market-based economic systems

Whistle Blowers

employees who report their employers illegal or unethical behavior to either the authorities or the media

Universal Ethical Standards

ethical norms that apply to all people across a broad spectrum of situations

Countertrade

international trade that involves the barter of products for products rather than for currency

Profit

the money that a business earns in sales or revenue, minus expenses, such as the cost of goods, and the cost of salaries. Revenue - Expenses = Profit (or Loss)

Quotas

limitations on the amount of specific products that may be imported from certain countries during a given time period

Cause Related Marketing

marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit

Protectionism

national policies designed to restrict international trade, usually with the goal of protecting domestic businesses

Communication Barriers

obstacles to effective communication, typically defined in terms of physical, language, body language, cultural, perceptual, and organizational barriers

Trade Surplus

overage that occurs when the total value of a nation's exports is higher than the total value of its imports

Entrepreneurs

people who risk their time, money, and other resources to start and manage a business

Exporting

selling products in foreign nations that have been produced or grown domestically

Passive Voice

sentence construction in which the subject does not do the action express by the verb; rather the subject is acted upon; the passive voice tends to be less effective for business communication Ex: The taxes were done by our accountant.

Active Voice

sentence construction in which the subject performs the action express by the verb, the active voice works better for the vast majority of business communication Ex: The accountant did the taxes.

Trade Deficit

shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports

Tariffs

taxes levied against imports

Demographics

the measurable characteristics of a population. Demographic factors: population size and density, age, gender, race, education, and income

Define social responsibility and examine the impact stakeholder groups

the obligation of a business to contribute to society. Enlightened companies carefully consider the priorities of all stakeholders - groups who have an interest in their actions and performance - as they make key decisions. Course stakeholder groups for most businesses are listed below, along with key obligations. 1) Employees: treat employees with dignity, respect, and fairness. Ensure the hard work and talent pay off. Help workers balance emerging work-life priorities. 2) Customers: provide quality product at a fair price. Ensure that customers are safe and informed. Support consumer choice and consumer dialogue. 3) Investors: create an ongoing stream of profits. Manage investor dollars according to the highest legal and ethical standards. Support full disclosure. 4) Community: support nonprofit groups that improve the community and fit with your company. Minimize the negative environmental impact of your business.

Unemployment rate

the percentage of the labor force reflecting those who don't have jobs and are actively seeking employment

Business cycle

the periodic expansion and contraction that occur over time in virtually every economy

Standard of Living

the quality and quantity of goods and services available to a population

Demand

the quantity of products that consumers are willing to buy at different market prices

Supply

the quantity of products that producers are willing to offer for sale at different market prices

Inflation rate

the rate at which prices are rising across the economy, the government tracks the consumer price index and the producer price index

Productivity

the relationship between the goods and services that an economy produces and the inputs needed to produce them

Value

the relationship between the price of a good or service and the benefits that it offers its customers

Business Environment

the setting in which a business operates. 5 key environments: economic, competitive, technological, social, and global

Consumerism

the social movement that focuses on 4 key consumer rights: The right to be safe, The right to be informed, The right to choose, and The right to be heard

Macroeconomics

the study of a country's overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies

Define economics

the study of how people, companies, and governments allocate resources - offers vital insights regarding the forces that affect every business on a daily basis. Understanding economics helps business people make better decisions, which can lead to greater profitability, both short-term and long-term. Macroeconomics is the study of broad economic trends. Microeconomics focuses on the choices made by smaller economic units, such as individual consumers, families, and businesses.

Microeconomics

the study of smaller economic units such as individual consumers, families, and individual businesses

Economics

the study of the choices that people, companies, and governments make in allocating society's resources

Gross domestic products (GDP)

the total value of all goods and services produced within a nation's physical boundaries over a given period of time

North American Free Trade Agreement (NAFTA)

the treaty among the United States, Mexico, and Canada that eliminated trade barriers and investment restrictions over a 15-year period starting in 1994

Free Trade

the unrestricted movement of goods and services across international borders

European Union (EU)

the world's largest common market, composed of 28 European nations

Dynamic Delivery

vibrant, compelling presentation delivery style that grabs and holds the attention of the audience