Business Administration Overview
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Questions and Answers

What type of ownership characterizes an economic system without freedom of choice for companies?

  • Cooperative ownership
  • State ownership (correct)
  • Joint venture ownership
  • Private ownership

A system with both state and private ownership of the means of production encourages competition.

True (A)

Name one prerequisite for both economic systems mentioned.

Use of production factors

A key principle that must be maintained in an economic system is ________ efficiency.

<p>economic</p> Signup and view all the answers

What is a crucial factor for maintaining solvency in an economic system?

<p>Liquidity management (B)</p> Signup and view all the answers

Match the economic principles with their descriptions:

<p>Economic efficiency = Optimal use of resources Financial equilibrium = Maintaining solvency State ownership = Ownership by government Private ownership = Ownership by individuals or companies</p> Signup and view all the answers

In an economic system with no competition, companies are incentivized to innovate.

<p>False (B)</p> Signup and view all the answers

What must be complied with to ensure an efficient economic system?

<p>Principle of economic efficiency</p> Signup and view all the answers

Which of the following describes a characteristic of a socialist centrally planned economy?

<p>State ownership of resources (A)</p> Signup and view all the answers

In a capitalist market economy, the government plays a significant role in regulating prices.

<p>False (B)</p> Signup and view all the answers

What is the term used to describe the phenomenon where the market regulates supply, demand, and prices?

<p>The invisible hand of the market</p> Signup and view all the answers

In a capitalist market economy, control is primarily via the __________ system.

<p>economic</p> Signup and view all the answers

Which economic system focuses on 'plan fulfilment' by the government?

<p>Socialist centrally planned economy (D)</p> Signup and view all the answers

Private property is a defining feature of a socialist centrally planned economy.

<p>False (B)</p> Signup and view all the answers

Match the economic characteristics with their corresponding economic systems:

<p>Centralized control = Socialist centrally planned economy Market regulates prices = Capitalist market economy State ownership = Socialist centrally planned economy Private property = Capitalist market economy</p> Signup and view all the answers

Which economist is known for introducing the concept of the 'invisible hand'?

<p>Adam Smith</p> Signup and view all the answers

What do marketing companies aim to do?

<p>Raise a need for products customers didn't know they had (B)</p> Signup and view all the answers

Deficit needs must be satisfied before self-realization needs.

<p>True (A)</p> Signup and view all the answers

What must people satisfy to engage in economic activity?

<p>needs</p> Signup and view all the answers

Consumers can be either private or __________ entities.

<p>governmental</p> Signup and view all the answers

Which of the following is NOT classified as a producer?

<p>Tax-funded roads (B)</p> Signup and view all the answers

Match the following types of companies with their examples:

<p>Producers = Hospitals Consumers = Government services</p> Signup and view all the answers

Companies operate independently of their customer base.

<p>False (B)</p> Signup and view all the answers

What two broad categories are companies divided into?

<p>Producers and Consumers</p> Signup and view all the answers

What is the first step in the product development process?

<p>Idea search (C)</p> Signup and view all the answers

Design and functionality are considered separately in product development.

<p>False (B)</p> Signup and view all the answers

What stage follows the idea selection in the product development process?

<p>Prototyping</p> Signup and view all the answers

The process of improving the product based on market feedback is called __________.

<p>optimization</p> Signup and view all the answers

Which of the following elements is NOT included in product design considerations?

<p>Market size (B)</p> Signup and view all the answers

Product packaging is irrelevant to the overall success of the product.

<p>False (B)</p> Signup and view all the answers

What is the purpose of conducting market surveys during the product development process?

<p>To gather feedback and validate product concepts.</p> Signup and view all the answers

Match the following product development steps with their descriptions:

<p>Product launch = Introducing the product to the market Prototyping = Creating a working model of the product Idea search = Generating new ideas for products Optimization = Improving the product based on feedback</p> Signup and view all the answers

What is a primary focus of corporate management?

<p>Making strategic decisions (D)</p> Signup and view all the answers

Financial markets are exclusively concerned with sales revenue.

<p>False (B)</p> Signup and view all the answers

What does the term 'just in time' production refer to?

<p>A production strategy that aims to reduce inventory costs by receiving goods only as they are needed in the production process.</p> Signup and view all the answers

The ________ markets deal with the procurement of production factors.

<p>procurement</p> Signup and view all the answers

Match the following elements of business with their definitions:

<p>Corporate controlling = Management of financial performance Revenue = Total income generated from sales Costs = Expenses incurred by a business Marketing = Promotion and selling of products or services</p> Signup and view all the answers

Which area employs approximately three-quarters of the workforce in Germany?

<p>Service sector (A)</p> Signup and view all the answers

Corporate operational accounting is not related to decision-making.

<p>False (B)</p> Signup and view all the answers

Identify a key benefit of using a 'just in time' production system.

<p>Reduces inventory costs.</p> Signup and view all the answers

The ________ markets encompass the sale of goods and services.

<p>sales</p> Signup and view all the answers

What aspect of corporate management involves ensuring the existence of the company?

<p>Strategic planning (B)</p> Signup and view all the answers

Which term refers to funds raised by a company from its owners?

<p>Equity (B)</p> Signup and view all the answers

Long-term assets are typically used in production for more than one year.

<p>True (A)</p> Signup and view all the answers

What is the term used for the market where companies sell goods and services to each other?

<p>Business to Business (B2B)</p> Signup and view all the answers

___ refers to the resources necessary to produce goods or services.

<p>Materials</p> Signup and view all the answers

Match the following terms with their definitions:

<p>Equity = Funds from ownership Debt = Funds raised through borrowing Profit = Earnings after expenses Supplies = Necessary items for production</p> Signup and view all the answers

Which of the following is not part of the capital sources?

<p>Inventory (A)</p> Signup and view all the answers

The operating institution is responsible for managing money and equity markets.

<p>True (A)</p> Signup and view all the answers

Define 'kaution' as mentioned in financial terms.

<p>Deposit or guarantee</p> Signup and view all the answers

Accounts that track income and expenses are known as ___ and controlling.

<p>Accounting</p> Signup and view all the answers

Match the following concepts with their market context:

<p>Sourcing = Acquiring needed resources Storage = Keeping goods until sold Sales = Transferring goods to consumers Marketing = Promoting products to customers</p> Signup and view all the answers

What is the main focus of finance in a business context?

<p>Capital management (A)</p> Signup and view all the answers

Finished goods are products ready for sale.

<p>True (A)</p> Signup and view all the answers

What does 'vorräte' refer to in English?

<p>Inventory</p> Signup and view all the answers

The relationship between the quantity of goods sold and their price can be expressed as ___ times price.

<p>Quantity</p> Signup and view all the answers

Flashcards

Centrally planned economy

An economic system where the government controls production and distribution.

Capitalist market economy

An economic system where individuals and companies own resources and decide how to use them.

Planwirtschaft

German term for a centrally planned economy.

Planerfüllung

German term for plan fulfilment in a socialist state.

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State ownership

Resources and businesses owned directly by the government in a centrally planned economy.

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Private property

Resources and businesses owned by individuals in a capitalist system.

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"Invisible Hand"

The concept that suggests markets naturally regulate themselves through supply and demand, driven by self-interest.

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Market Regulation

Mechanism adjusting supply and demand via price changes in a market.

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What is the key difference between a centrally planned and a market economy?

A centrally planned economy has government control of production, while a market economy relies on individual choice and competition.

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What are the essential components of both economic systems?

Both systems use factors of production, adhere to economic efficiency, and require financial stability.

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What does 'maintaining financial equilibrium' mean in an economy?

Ensuring that a system can meet its financial obligations and continues to operate smoothly.

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What is the role of competition in a capitalist market economy?

Competition between businesses drives innovation and efficiency, leading to lower prices and better products.

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Economic Efficiency

Producing the maximum output with the minimum input, minimizing waste.

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Liquidity

The ability for businesses to easily convert assets into cash to meet their financial obligations.

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Corporate management

The process of making decisions and taking actions to ensure a company's survival and success.

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Target system

A company's long-term strategic goals and objectives, outlining their direction for growth and development.

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Corporate strategies

Plans and actions a company takes to achieve its target system and compete effectively in the market.

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Financial markets

Where companies raise capital and investors buy and sell securities, providing funds for growth and investment.

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Financing and Investment

The process of acquiring and managing financial resources needed for a company's operations and growth.

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Financial, balance sheet and income statements

Financial reports that provide insights into a company's financial health, assets, liabilities, and profitability.

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Corporate controlling

The process of monitoring and managing a company's financial performance and ensuring it meets its goals.

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Procurement markets

Where companies source the raw materials, goods, and services needed for production.

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Production

The process of transforming raw materials into finished products.

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Marketing

The process of promoting and selling a company's products and services to its target audience.

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Marketing - Creating Needs

Marketing strategies often aim to create desires in consumers for products they may not have initially realized they needed.

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Needs vs. Wants

Needs represent basic necessities for survival, like food and shelter. Wants are desires for goods and services that go beyond fundamental needs.

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Economic Activities & Needs

Human activities, including production and consumption, are driven by the need to fulfill basic needs and desires.

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Producers in the Economy

Producers, such as businesses and government entities, provide goods and services to meet the needs of consumers.

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Consumers in the Economy

Consumers are individuals or groups that use goods and services to fulfill their needs and wants.

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What is a company?

A company is a group of individuals working together with a defined strategy to operate in the market, relying on customers and their needs.

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Self-Realization & Needs

The idea is that people strive for self-realization, but to reach it, basic needs must be met first.

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Examples of Producers

Producers include businesses, government entities, and organizations like universities, hospitals, and waterworks.

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Product Development

The process of creating a new product, from the initial concept to its launch in the market. It includes stages like research, design, prototyping, testing, and production.

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Idea Concentration

The process of refining and focusing on the most promising product ideas, based on market research, feasibility analysis, and potential profitability.

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Functional Safety

Ensuring a product performs its intended function safely and reliably, without harming users or causing harm to the environment.

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Operational Safety

Dealing with the safe and reliable operation of a product during its entire life cycle, from manufacturing to disposal.

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Design & Function Combined

An approach in product design that emphasizes the seamless integration of aesthetics and functionality, creating products that are both beautiful and practical.

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Packaging

The container or wrapping that protects and presents a product, influencing consumer perception and purchase decisions.

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Market Surveys

Collecting data from potential customers and competitors to understand market trends, preferences, and competition for a product.

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Optimization

Continuously improving product design, manufacturing processes, and marketing strategies to enhance efficiency, reduce cost, and maximize customer satisfaction.

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Operating Institution

An organization that carries out business activities, including sourcing, production, storage, and sales, to meet the needs of customers.

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Sourcing

Obtaining the necessary resources, materials, and supplies for production.

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Materials

Raw materials used in production, such as metal, wood, or fabric.

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Storage

Keeping finished goods or services in a safe and organized place until they are needed.

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Sales and Marketing

Promoting and selling products or services to customers.

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Assets

Valuable resources owned by an organization, including materials, equipment, and buildings.

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Equity

The owners' stake in a company, represented by deposited funds and accumulated profits.

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Debt

Money borrowed by a company from lenders, which must be repaid with interest.

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Business to Government (BTG)

Transactions between companies and government agencies, involving products, services, or contracts.

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Business to Business (BTB)

Commercial transactions between companies, including supplies, materials, or services.

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Business to Private (BTP)

Sales of products or services directly to individual consumers.

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Accounting and Controlling

Managing the financial records of an organization, tracking income, expenses, and assets, and ensuring financial stability.

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Beschaffungsmarkt (Procurement Market)

The market where companies source materials, resources, and supplies.

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Study Notes

Agenda

  • The agenda details a schedule for a course on Business Administration
  • Topics include Introduction, Basics of Business Administration, Material, Production, Marketing, Objectives, Management, Organization, Human Resources, Financing and Investment, Accounting/Controlling, and Mega Trends and Perspectives.

Introduction (What?)

  • Course objective: Understanding Business Administration/Management as a Science
  • Identifying relevant Cornerstones of Business Administration
  • Learning to understand a Company as an Organism, preparing for future courses
  • Changing perspective from Customer to Producer.

Introduction (The Operating Institution)

  • The operating institution's structure includes Sourcing (materials, operating resources, human resources), Supplies (asset, inventory), Storage (products, goods), and Market (government, private businesses, households, individuals)
  • Accounting and Controlling is a crucial part of the institution, related to Finance (equity, debt) and Government (taxes, fees)
  • Concepts like "just in time" production and subventions from a public body are explained as well.

Introduction (Company Overview)

  • The company structure diagram displays connected elements: financial markets, financing/investment, procurement markets, materials, production, corporate management, corporate strategies, corporate controlling, costs, revenue, and sales markets.
  • It illustrates the interconnectedness of these elements in a company's operational accounting and the functions of a business.

Basics of Business Administration

  • The section covers the history and science aspects of Business Administration (BA)
  • The history of BA Science and the intersection of science and BA

Science

  • Identification and increase of knowledge = research -Qualitative: Describing something objectively -Quantitative: Using data points to understand better
  • Imparting and broadening knowledge = teaching -Education/Training for jobs at universities or in-company settings

Business Administration and Science

  • Focuses on the economic side of business, including scarce goods like money, time, and human resources
  • Distinguishes between theoretical and practical aspects
  • The importance of methods to achieve goals

Business Administration in the Context of Science

  • Explains how business administration fits into the broader framework of different kinds of sciences.
  • Distinguishes between ideal sciences (like logic and mathematics) and real sciences (like biology and chemistry).
  • Shows the classifications of economic, social, and natural sciences and their relationship to business administration.

History of BA Science

  • The main steps in BA development are outlined -Antiquity (400 BC) -Middle Ages (1200 onward) -Modern Times (1650 onward) -19th Century (1800 onward) -20th Century (1900 onward)

Science and BA (Needs, Definitions, Principles)

  • Maslow's Hierarchy of Needs -Describes the different levels of need, from basic needs (physiological) to self-actualization
  • Kinds of economies (Producers/Consumers) -Clarifies the roles and relationships in the production and consumption of goods
  • Effectiveness & Efficiency -Measures of performance, from targets and profitability to doing the right things

Science and BA (Comparison of Economies)

  • Comparison of capitalist market economies and planned economies is presented, outlining their approaches to resource control and ownership -Capitalist economies focus on private ownership and market regulation -Socialist economies center on state control and planned fulfillment

Science and BA (Code of Conduct)

  • Distinction between visible reality (observable conditions) and value judgements (subjective evaluations) in business administration
  • Value judgements can be consciously included in research, but scientifically demonstrated claims are required

Material

  • Basics, Procurement, Storage -Overview of material management, encompassing its basics, procurement procedures, and storage methods. -Presentation of material management models (decision-and-function-based), highlighting the importance of suppliers, procurement, production, and customers.
  • Deployment: Different procurement types (single, stock, just-in-time) are available with advantages and disadvantages.
  • Cost trends: Cost patterns depending on order volume, featuring optimal order quantity, storage, and order costs within a company.
  • Storage: Methods of bearing (manual/automatic) are presented including storage structure. Barcodes feature as a method of identification.

Production

  • Basics, Organization, Planning; Decision-making Process in Production & Assembly; Different types of production (individual, serial, mass production); shop floor manufacturing alternatives, and target setting process.

Marketing

  • Basics, Product, Place, Price, Promotion; Problem-solving process, Monitoring functions, Sales markets (consumers), market research, market segmentation (demographic, socio-psychological, behavioral), product idea selection, product development, marketing policies.

Objectives

  • Types of objectives, with factual and formal objectives that define goals, target setting, and operationalization, including feasibility checks, implementation steps

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