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Study Guide 1
BUSN 101 Study guide from the Statewide Curriculum Committee
| Question | Answer |
|---|---|
| absolute advantage | Exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries. |
| balance of trade | The total value of a nation’s exports compared to its imports over a particular period. |
| balance sheet | Financial statement that reports a firm’s financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners’ equity. |
| benchmarking | Comparing (rating) an organization’s practices, processes, and products against the world’s best. |
| brand | A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers. Smaller retailers place their own private brand label on final goods which were created by a third party manufacturer. |
| centralized authority | An organization structure in which decision-making authority is maintained at the top level of management at the company’s headquarters |
| command economies | Economic systems in which the government largely decides what goods and services will be produced, who will get them, and how the economy will grow. |
| common stock | The most basic form of ownership in a firm; it confers voting rights and the right to share in the firm’s profits through dividends, if offered by the firm’s board of directors. |
| 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. |
| conglomerate merger | The joining of firms in completely unrelated industries. |
| consumer price index | Monthly statistics that measure the pace of inflation or deflation. |
| contingency planning | The process of preparing alternative courses of action that may be used if the primary plans don’t achieve the organization’s objectives. |
| controlling | A management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not. |
| convenience goods and services | Products that the consumer wants to purchase frequently and with a minimum of effort. |
| core time | In a flextime plan, the period when all employees are expected to be at their job stations. |
| debenture bonds | Bonds that are unsecured (i.e., not backed by any collateral such as equipment). |
| debt financing | Funds raised through various forms of borrowing that must be repaid. |
| decentralized authority | An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be. |
| demand | The quantity of products that people are willing to buy at different prices at a specific time. |
| departmentalization | The dividing of organizational functions into separate units. (functional, geographic, customer, process) |
| depreciation | The systematic write-off of the cost of a tangible asset over its estimated useful life. |
| depression | A severe recession, usually accompanied by deflation. |
| dividends | Part of a firm’s profits that the firm may distribute to stockholders as either cash payments or additional shares of stock. |
| Dow Jones Industrial Average (the Dow) | The average cost of 30 selected industrial stocks, used to give an indication of the direction (up or down) of the stock market over time. |
| embargo | A complete ban on the import or export of a certain product, or the stopping of all trade with a particular country. |
| empowerment | Giving frontline workers the responsibility, authority, freedom, training, and equipment they need to respond quickly to customer requests. |
| equity financing | Money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital). |
| ethics | Standards of moral behavior, that is, behavior accepted by society as right versus wrong. |
| exporting | Selling products to another country. |
| factors of production | The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge. |
| flat organization structure | An organization structure that has few layers of management and a broad span of control. |
| flextime plan | Work schedule that gives employees some freedom to choose when to work, as long as they work the required number of hours. |
| form utility | The value producers add to materials in the creation of finished goods and services. |
| franchise | The right to use a specific business’s name and sell its products or services in a given territory. |
| 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. |
| franchisee | A person who buys a franchise |
| franchisor | A company that develops a product concept and sells others the rights to make and sell the products. |
| free-market economies | Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy grows. |
| free-rein leadership | Leadership style that involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives. |
| free trade | The movement of goods and services among nations without political or economic barriers. |
| fringe benefits | Benefits such as sick-leave pay, vacation pay, pension plans, and health plans that represent additional compensation to employees beyond base wages. |
| fundamental accounting equation | Assets = Liabilities + Owners’ equity; this is the basis for the balance sheet. |
| general partner | An owner (partner) who has unlimited liability and is active in managing the firm. |
| general partnership | A partnership in which all owners share in operating the business and in assuming liability for the business’s debts. |
| geographic segmentation | Dividing the market by cities, counties, states, or regions. |
| gross domestic product (GDP) | The total value of final goods and services produced in a country in a given year. |
| Hawthorne effect | The tendency for people to behave differently when they know they are being studied. |
| horizontal merger | The joining of two firms in the same industry. |
| importing | Buying products from another country. |
| import quota | A limit on the number of products in certain categories that a nation can import. |
| income statement | The financial statement that shows a firm’s profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, expenses, and the resulting net income or net loss. |
| information utility | Adding value to products by opening two-way flows of information between marketing participants. |
| job analysis | A study of what is done by employees who hold various job titles. |
| job description | A summary of the objectives of a job, the type of work to be done, the responsibilities and duties, the working conditions, and the relationship of the job to other functions. |
| job specifications | A written summary of the minimum qualifications required of workers to do a particular job. |
| just-in-time (JIT) inventory control | A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line. |
| leverage | Raising needed funds through borrowing to increase a firm’s rate of return. |
| market | People with unsatisfied wants and needs who have both the resources and the willingness to buy. |
| marketing mix | The ingredients that go into a marketing program: (4 p’s): product, price, place, and promotion. |
| marketing research | The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions. |
| market price | The price determined by supply and demand. |
| market segmentation | The process of dividing the total market into groups whose members have similar characteristics. |
| Maslow’s hierarchy of needs | Theory of motivation based on unmet human needs from basic physiological needs to safety, social, and esteem needs to self-actualization needs. |
| mass customization | Tailoring products to meet the needs of individual customers. |
| master limited partnership (MLP | A partnership that looks much like a *corporation (in that it acts like a corporation and is traded on a stock exchange) but is taxed like a partnership and thus avoids the corporate income tax. |
| merger | The result of two firms forming one company. |
| mission statement | An outline of the fundamental purposes of an organization. |
| mixed economies | Economic systems in which some allocation of resources is made by the market and some by the government. |
| monetary policy | The management of the money supply and interest rates by the Federal Reserve Bank. |
| monopolistic competition | The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different. |
| NASDAQ | A nationwide electronic system that communicates over-the-counter trades to brokers. |
| North American Free Trade Agreement (NAFTA) | Agreement that created a free-trade area among the United States, Canada, and Mexico. |
| Civil Rights Act of 1964 | For firms with 15 or more employees, outlawed discrimination in employment based on sex, race, color, religion, or national origin. The Equal Employment Opportunity Act (EEOA) became a formidable regulatory force in the administration. |
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maryharnishfeger
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