Digital Management 1
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Questions and Answers

What is the primary goal of a business?

  • To avoid competition and create monopolies
  • To provide services without any expenses
  • To produce as many products as possible
  • To earn a profit while maintaining social responsibility (correct)

    • What constitutes a product in a business context?

  • Intangible services exclusively
  • Both tangible goods and intangible services that provide value (correct)
  • Only items that are manufactured in a factory
  • Only tangible goods like furniture and vehicles

    • Which of the following describes the management function in business?

  • Focusing exclusively on marketing and sales
  • Only organizing financial resources
  • Ensuring goods are produced with no financial oversight
  • Developing plans, leading, organizing, and controlling activities (correct)

    • Who are considered stakeholders in a business?

    <p>The owners, customers, suppliers, and government regulators</p> Signup and view all the answers

    Which activity is not a main focus of marketing?

    <p>Manufacturing the products</p> Signup and view all the answers

    What is necessary for a business to achieve and maintain profitability?

    <p>Being efficient, producing quality goods, and acting ethically</p> Signup and view all the answers

    In a business, what is the primary responsibility of finance?

    <p>To provide financial resources for business operations</p> Signup and view all the answers

    What distinguishes a nonprofit organization from a for-profit business?

    <p>Nonprofits do not focus on earning profits</p> Signup and view all the answers

    What is the most common way businesses demonstrate their community responsibility?

    <p>Donating to charitable organizations</p> Signup and view all the answers

    What ethical issue is associated with unemployment in communities?

    <p>Protests in low-income areas</p> Signup and view all the answers

    What does the term 'absolute advantage' refer to in international trade?

    <p>A country producing a unique item more efficiently than others</p> Signup and view all the answers

    What is primarily driving U.S. companies to outsource jobs?

    <p>Increased labor costs domestically</p> Signup and view all the answers

    What is the main reason nations engage in international trade?

    <p>To gain access to unique resources or lower prices</p> Signup and view all the answers

    How does comparative advantage affect international trade?

    <p>It encourages specialization in efficient production.</p> Signup and view all the answers

    Which factor is NOT directly linked to ethical issues associated with unemployment?

    <p>Government subsidies for companies</p> Signup and view all the answers

    What is the primary impact of globalization on U.S. companies?

    <p>More opportunities for market expansion</p> Signup and view all the answers

    What is the primary reason for the high failure rate of small businesses?

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

    Which of the following is NOT a common cause of small business failure?

    <p>Adapting to new technology</p> Signup and view all the answers

    What essential document outlines the rationale and strategy of a business?

    <p>Business Plan</p> Signup and view all the answers

    What type of business ownership features a single individual running the business?

    <p>Sole proprietorship</p> Signup and view all the answers

    Which of the following statements best describes managerial incompetence in small businesses?

    <p>Can lead to poor decision-making in key areas</p> Signup and view all the answers

    Why is equity financing important for new businesses?

    <p>It's often derived from the owner's personal resources</p> Signup and view all the answers

    What challenge do many entrepreneurs face when their business begins to grow?

    <p>Giving up direct authority</p> Signup and view all the answers

    What aspect of business planning includes understanding the competition?

    <p>Competition analysis</p> Signup and view all the answers

    What is the main characteristic of licensing?

    <p>The licensee uses the licensor's products and processes for a royalty.</p> Signup and view all the answers

    Which option best describes outsourcing?

    <p>Hiring a foreign firm to carry out tasks to save on labor expenses.</p> Signup and view all the answers

    What distinguishes franchising from general licensing?

    <p>Franchising provides strict adherence to the franchiser's operations.</p> Signup and view all the answers

    What defines offshoring?

    <p>Relocating a business process to another country.</p> Signup and view all the answers

    Which strategy is commonly used by companies operating internationally?

    <p>Multinational strategy, customizing offerings by market.</p> Signup and view all the answers

    What is a joint venture?

    <p>A collaborative arrangement to share costs and operations in a foreign market.</p> Signup and view all the answers

    Which statement about insourcing is correct?

    <p>Insourcing refers to transferring jobs from foreign companies to U.S. companies.</p> Signup and view all the answers

    What factor is NOT important for planning in a global economy?

    <p>The political climate of the domestic market.</p> Signup and view all the answers

    What is the primary objective of employee empowerment?

    <p>To enable employees to make decisions about their jobs</p> Signup and view all the answers

    Which step comes immediately after recognizing and defining the decision situation?

    <p>Developing options</p> Signup and view all the answers

    Why is brainstorming an effective tool in the decision-making process?

    <p>It fosters creativity and generates a variety of options</p> Signup and view all the answers

    In decision making, what often complicates the selection of the best option?

    <p>The subjective nature of many situations requiring a decision</p> Signup and view all the answers

    What does the implementation step in decision making involve?

    <p>Putting the selected option into action</p> Signup and view all the answers

    What is an important aspect that effective managers pay attention to regarding decision situations?

    <p>Warning signs that indicate potential issues</p> Signup and view all the answers

    Which of the following best describes a situation that generally requires small-scale decisions?

    <p>An unexpected issue arising without warning</p> Signup and view all the answers

    What should the best list of options consist of when addressing a defined decision situation?

    <p>A combination of standard and creative plans</p> Signup and view all the answers

    What is the primary focus of operations management?

    <p>Transforming resources into goods and services</p> Signup and view all the answers

    Which term is more inclusive than 'production' in the context of operations management?

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

    In operations management, feedback is used primarily for what purpose?

    <p>To control the transformation process</p> Signup and view all the answers

    What is a unique challenge that service operations face compared to manufacturing operations?

    <p>Intangibility of the final product</p> Signup and view all the answers

    How do service providers differ from manufacturers?

    <p>They have a significant customer-contact component</p> Signup and view all the answers

    The transformation process in operations management involves which of the following?

    <p>Using inputs to create outputs</p> Signup and view all the answers

    Which of the following terms represents the activities associated with creating tangible products?

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

    Why is the term 'operations' preferred over 'manufacturing' in modern contexts?

    <p>It reflects the importance of service and idea delivery</p> Signup and view all the answers

    Study Notes

    Digital Management 1

    • Businesses produce products satisfying needs to earn profit.
    • Products have tangible and intangible characteristics providing value and benefits.
    • Business goal is profit and social responsibility.
    • Profit is the difference between cost and selling price of a product.
    • Nonprofit organizations do not aim for profit.
    • Businesses need management skills to plan, organize, and control activities, find, and develop employees for product production.
    • To achieve profitability, businesses need to produce quality products, operate efficiently, and be socially responsible/ethical towards stakeholders (customers, employees, investors, regulators, community).
    • Owners, employees, and customers are central to business activities.
    • Management involves planning, organizing, leading, and controlling business activities to meet goals.
    • Marketing aims to satisfy consumer needs and wants and includes activities designed to provide goods and services.
    • Finance is the primary responsibility of owners, providing financial resources for operations.

    The Economic Foundations of Business

    • Economics is the study of resource distribution for goods and services within a social system.
    • Resources include natural, human, and financial resources.
    • Basic economic systems include communism, socialism, and capitalism.
    • Free enterprise allows businesses to operate and succeed or fail based on market demand.
    • Individual rights (property ownership) and business rights (profit, decisions) are critical for free enterprise.
    • Economic systems distribute resources to produce goods and services with limited resources.
    • Forces of supply and demand determine resource and product distribution.
    • Competition- rivalry among businesses—forces efficiency and low prices.
    • Economic systems can expand or contract, with expansion including economic growth and increased consumer spending, and contraction including decline in production, employment, and income.
    • Recessions and depressions are times of economic contraction.
    • Unemployment rates indicate economic health.

    Business Ethics and Social Responsibility

    • Business ethics are principles and standards for acceptable conduct in organizations.
    • Social responsibility is a business's obligation to positively impact society and minimize negative impacts.
    • Many ethical/social responsibility issues are codified by laws and regulations.
    • Ethical conflicts can evolve into legal disputes if conflict resolution isn't possible.
    • Ethical considerations apply to all organizations.

    The Role of Ethics in Business

    • Ethical conflicts may arise from actions judged by society as unethical.
    • Misconduct can lead to legal disputes.
    • Recognizing ethical issues is a critical first step.
    • Business ethics go beyond legal issues.
    • Ethical issues are not limited to only for-profit organizations.

    Business in a Borderless World

    • International business covers buying, selling, and trading of goods/services across national boundaries.
    • Nations trade to gain resources unavailable elsewhere or at a lower cost.
    • Comparative advantage motivates specialization in products produced efficiently.
    • Outsourcing involves transferring tasks to countries with lower costs.
    • Exporting involves selling goods to foreign markets.
    • Importing involves purchasing goods from foreign markets.
    • Trade deficit occurs when a nation imports more than it exports.
    • Trade barriers can impact international business(economic, legal, political, social, cultural).

    Managing Operations and Supply Chains

    • Operations management involves converting resources into products/services.
    • Inputs (raw materials) are changed into outputs (products/services).
    • Several processes included in managing operations (planning capacity, facility layout ,managing inventory).
    • Technology influences operations (computer-assisted design, computer-assisted manufacturing).
    • Businesses look toward sustainability as they perform operations (environmentally friendly practices).

    Managing Human Resources

    • Human resources (HR) encompasses human labor, acquiring, training, and compensating people to meet organizational needs.
    • Determining resource needs is an important initial HR function, considering retirements, departures, and hiring needs.
    • Job analysis details skills, knowledge, and duties needed for a job.
    • Job specification details qualifications for a specific job (education, experience, personal, and physical characteristics).
    • Recruiting involves attracting potential applicants for a job.

    Motivating the Workforce

    • Employee motivation drives performance toward organizational goals.
    • Theories about motivation (Maslow's Hierarchy of Needs, Herzberg's Two-Factor Theory) attempt to understand what motivates people to do their work.
    • Managers can use various strategies to motivate employees.
    • Flexible scheduling, such as flextime, compressed workweeks, and job sharing, allow flexibility.
    • Several motivational strategies help in retention of staff.
    • Employees are influenced by pay, benefits, relationships with supervisors, and company's culture.

    Customer-Driven Marketing

    • Marketing drives the value of exchange between buyer and seller.
    • Marketing involves creating, distributing, pricing, and promoting goods and services, generating exchange, providing value, and promoting revenue.
    • The marketing mix (product, place, price, promotion) assists in achieving marketing goals.
    • Many factors influence the marketing environment (political, legal, economic, social, technological.).
    • Businesses apply customer-oriented strategies.
    • Organizations use market segmentation, selecting target markets appropriately, and developing marketing strategies to target those specific markets.
    • A good marketing strategy can help ensure the long-term success of most businesses.

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