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Stack #4713671
| Question | Answer |
|---|---|
| What is a business | Any activity that seeks to provide goods and services to others while earning a profit. |
| What are goods and services? | Goods are tangible items bought and sold while services are intangible. |
| What is revenue and profit? | Revenue is the total money earned during a given period and profit is is revenue minus expenses |
| What are stakeholders? | Stakeholders are anyone affected by or who can affect the actions and policies of a business. |
| What are the five components that make up the Business Environment? | Economic and Legal, Technological, Competitive, Global, and Social |
| What is the definition of economics | Economics is how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals. |
| Demand Curve | as price increases, people will want to buy less |
| Supply Curve | as price increases, businesses will want to have more supply |
| What are the three metrics that determine how an economy is performing ? | GDP, Unemployment Rate, Inflation |
| Globalization: | process by which people, companies, and governments of different countries interact and integrate through trade, investment, technology, and cultural exchange, resulting in a more interconnected and interdependent world |
| Global Company | a firm that operates in multiple countries with centralized decision-making in a home country, standardized products and services, and an ethnocentric strategy based on how things are done in the home country |
| Multi-national company | operates in many countries but changes aspects of product/service according to location |
| What is free trade? | trade without economic or political barriers |
| What are the six entry strategies for competing in global markets | Licensing, exporting, franchising, contract manufacturing, international joint ventures and strategic alliances, and foreign direct investment |
| Licensing | right to manufacture a product or use its trademark |
| Franchising | contract where someone with business idea sells to others the right to use the business name and sell a product or service in a given territory in a specified manner |
| Contract manufacturing | foreign company produces private-label goods to which a domestic company then attaches its own brand/trademark |
| Joint venture | a partnership with 2 or more companies (usually from different countries) for a major project. |
| Strategic Alliance | A strategic alliance is a long-term partnership between two or more companies to help each build competitive market advantages |
| Foreign Direct Investment | buying of permanent property and businesses in foreign nations |
| What are the four forces that affect operating in global markets | Sociocultural, economic and financial, legal and regulatory, and physical and environmental |
| What is outsourcing | Outsourcing is when one firm contracts with other companies (usually foreign) to do some or all of its functions. |
| Ethics | society's accepted standards of moral behavior |
| What three questions should one ask to determine the ethics of a proposed action? | 1) is it legal? 2) is it fair and balanced? 3) how will it make me feel about myself? |
| What are the four recommendations one can follow to be an ethical leader | 1) lead by example. 2)ask your peers or mentors for advice. 3) create code of conduct. 4) creating a culture of whistleblowing |
| Integrity based code of conduct | defining the organization's values and creating an environment where ethical behavior is supported and accountability is shared |
| Compliance based code of conduct | penalizing wrongdoers and increasing control to prevent unethical behavior |
| What is corporate social responsibility | penalizing wrongdoers and increasing control to prevent unethical behavior |
| Why should firms pursue social responsibility | May attract investors and customers, retain customers and employees and in turn make more money |
| What are the four levels of corporate social responsibility according to the CSR pyramid? | Economic, legal, ethical, and philanthropic |
| Economic level of CSR | maximizing profit |
| legal level of CSR | adherence to relevant laws |
| Ethical level of CSR | right vs wrong behavior |
| philanthropic level of CSR | providing social good by helping people/planet |
| What are the four ways firms can/should fulfill their discretionary CSR efforts? | 1) satisfying customers with goods and services of real value. 2) making money for investors. 3) creating jobs and rewarding hard work and maintaining job security. 4) creating new wealth for society and making the business’s environment a better place |
| Stakeholder Analysis | method of examining a firm that identifies and prioritizes its stakeholders so that it can make the most sustainable decision to support its long term growth |
| What are the three categories of stakeholders identified on the CSR slides? | Organizational: directors, employees, stockholders. Economic: customers, competitors, suppliers. Societal: communities, environment, government. |
| What are the four steps firms should take to prioritize their stakeholders and make appropriate decisions? | 1)identify relevant stakeholders. 2)identify stakeholder interests, what do they have to gain or lose? 3) analyze potential impact or response from stakeholders on/to you. 4)choose a course of action |
| What is a social audit? | Systematic evaluation of an organization's progress towards implementing socially responsible and responsive programs. |
| What are the five factors’ people should consider when choosing a legal business entity? | 1) ownership 2)control/management 3)how to raise money 4)taxes 5)liability |
| Sole prop pros | ease of staring and ending, be your own boss, ownership, legacy, retention of profits |
| sole prop cons | unlimited liability, limited financial resources, management difficulties, overwhelming time commitment, few fringe benefits, limited growth, limited life span |
| general partnership | all owners share in operating the business and in assuming liability |
| gen part pros | more financial resources, shared management and pooled skills, longer survival, no special taxes |
| gen part cons | unlimited liability, division of profits, disagreements among partners, difficulty of termination |
| c corporation | a state-chartered legal entity with the authority to act and have liability separate from its owners or stockholders who are not liable for anything but the value of their investments |
| c corp pros | limited liability, ability to raise more money, size, perpetual life, ease of ownership change, ease of attracting talented employees, separation of ownership from management |
| c corp cons | initial cost, extensive paperwork, double taxation, 2 tax returns, size, difficulty of termination, possible conflict with stockholder and board of directors |
| S corp | looks like a corporation but is taxed like sole proprietorship or partnership, profits are taxes only as the personal income of the shareholders, has many requirements to fulfill |
| LLC | Similar to S corporation but without special eligibility requirements |
| LLC pros | limited liability , choice of taxation, flexible ownership rules, flexible distribution of profits and losses, operating flexibility |
| LLC cons | no stock, must get approval of other members to sell, fewer incentives, must pay self-employment taxes, paperwork |
| B corp | can be in many corporate formations but a portion of profits is designed to support social causes (still profit driven) (application based) |
| Franchise | someone with a business idea sells the rights to use the business name and sell its products to others in a given territory |
| franchise pros | management and marketing help, personal ownership, nationally recognized name, financial advice and help, lower failure rate |
| franchise cons | large startup costs, shared profit, management regulation, coattail effect, restrictions on selling, fraudulent franchises |
| Cooperative (Co-op) | owned and controlled by the people who use it: producers, consumers, or workers with similar needs who pool their resources for mutual gain. Members democratically control businesses by electing a board of directors who hires managers |
| What is a merger | mergers are the result of two firms joining to form one company |
| Vertical Merger | joins two firms operating in different stages of related businesses |
| Horizontal Merger | joins two firms in the same industry and allows them to diversify and expand their products |
| Conglomerate Merger | unites firms in unrelated businesses to diversify operations and investments |
| What is an acquisition | An acquisition is one company’s purchase of the property and obligations of another company |
| What percent of new business fail in the first five years | 50% |
| What are the four main reasons why people decide to become entrepreneurs? | Profit: make money. Independence: be your own boss. Challenge: calculated risks, gambling? Opportunity: American Dream |
| What are the different entrepreneurial attributes people should possess to be successful in starting a new venture? | Self-directed: be your own boss Self-nurturing: believe in your idea no matter what Action oriented: actualize your ideas Highly energetic: long hours, few breaks Tolerant of uncertainty: you never know |
| Five types of different entp businesses | Startup, intrapreneurs, micropreneurs, Franchising, and high-growth venture |
| Startup | new business that solves a problem and is focused on moderate and long-term growth |
| High-growth venture | usually based around tech or pharmaceutical product, fast grown and financial returns in a short time |
| What are the three components that lead to successful startups? | Viable opportunity, entrepreneurial team, and resources |
| What makes for a viable opportunity? | Fits customer needs, you have the resources and skills, you can find balance between profit and good price, keep business going |
| Who should be on an entrepreneurial team? | People with similar desires and skills you need |
| What are the different people-based resources entrepreneurs should draw upon? | Networking, bootcamps, government entities like SBA, development centers, enterprise zones, etc. |
| What are the two main forms of financing (raising money for) a new venture? | Debt based and equity based |
| What are the different kinds of equity-based investors that support new Businesses? | family/friends/fools, angel investors: pro investors, venture capitalists: investment firms who usually want high ownership, crowdfunding |
| What is a business plan? | A business plan is a narrative explanation of your company story |
| What should a business plan include | Marketing plan Team Market Operations Competition Risks Financial projections |
| What are the four elements the founders of new businesses should stay focused on in managing their businesses? | Tailor your goods for customers, finding/managing employees, keeping good records, and bootstrapping: doing more with less |
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