AFM 131 Key Terms PDF

Unit 3 - Benchmark interest rate: The rate at which the Bank of Canada loans money to Canada’s financial institutions. - Business cycles: The rise and fall in economic activity over time, and each cycle can vary in terms of time and severity. The cycles include: expansionary,...

Unit 3 - Benchmark interest rate: The rate at which the Bank of Canada loans money to Canada’s financial institutions. - Business cycles: The rise and fall in economic activity over time, and each cycle can vary in terms of time and severity. The cycles include: expansionary, peak, contraction, trough, and recovery. - Consumer Price Index (CPI): A price index that compares the change in prices for a basket of commonly purchased goods, including items such as food, housing, clothing, transportation, and recreation. - Depression: A severe form of a recession characterized with a longer period of declining economic activity. - Deregulation: Removal of some laws and regulations which can allow for more competition. - Economies of scale: Advantages of having the cost of production spread over a larger number of units produced, so the cost of production per unit declines as the number of units produced increases. - Environmental scan: An assessment of the business environment to see what factors could impact the growth and success of a business in achieving its organizational goals. - Factors of production: Land, labour, capital, entrepreneurship, and knowledge. - L - physical resources - L - workers - C - money and equipment - K - knowledge of how to carry out a task - E - innovative and creative ideas - Fiscal policy: How the government keeps the economy stable through increases and decreases in both taxes and government spending. - Gross Domestic Product (GDP): The total value of final goods and services produced within a country in a year. - GDP per capita: The GDP per person in a country. - Inflation: The rise in the price of goods and services over time. - Macroeconomics: Studies what can impact an economy as a whole, including employment levels, interest rates, inflation, and GDP. - Microeconomics: Studies the decisions made by individuals and businesses within the economy. - Monetary policy: Management of the money supply and interest rates. - National debt: The accumulation of government deficits over time. - PEST: An acronym to review the Political, Economic, Social, and Technological factors that could impact how an organization achieves its goal. - Porter’s five forces: To help you assess the competitive landscape reviewing: current competitors, potential competitors, substitutes, bargaining power of suppliers, and bargaining power of customers. The five forces are competition, the threat of new entrants to the industry, supplier bargaining power, customer bargaining power, and the ability of customers to find substitutes for the sector's products. - Recession: A period where there are two or more consecutive quarters of a decline in GDP. - Stakeholders: Individuals or entities that have an interest or stake in what an organization does. Stakeholders can include customers, suppliers, employees, competitors, government, and unions. - Switching costs: The monetary and psychological costs to change from one product/supplier to another. - SWOT: An assessment of the Strengths, Weaknesses, Opportunities, and Threats for an organization. - Triple bottom line reporting: Where a company reports on their performance with social, environmental, and economic factors. This is also known as reporting around people, planet, and profit. - Unemployment rate: Measured as the percentage of people who are unemployed out of the total labour force (those actively seeking work or working). Unit 4 - Corporate philanthropy: When a company donates money or time/skills to various causes. - Corporate Social Responsibility (CSR): How a company steps up to take care of those around them in society. - Ethical dilemma: A problem where a difficult choice has to be made with potentially no desirable alternatives. - Ethics: Guiding principles that help us navigate decision-making in a given situation or context. - Fair trade: Ensures producers in developing countries are paid a fair price for the goods that we purchase from them. - Laws: Established rules and regulations within a jurisdiction that govern actions. - Social audit: Evaluating and reporting on how a company is progressing towards their social responsibility priorities. - Sustainable development: Whether business operations and processes can support the needs for current and future generations without negative consequences. - Triple Bottom Line (TBL): A framework that can be used by organizations to voluntarily report their progress on social, economic, and environmental results for a reporting period. - Whistleblowers: People that step up to report illegal or unethical behaviour. Unit 5 - Balanced scorecard approach: A method of control that looks at both financial and non-financial measures through the assessment of financial, customers, business processes, and learning & growth. - Contingency plans: Planned courses of action to take when your original plans don’t go as anticipated. - Goals: Targets or accomplishments a business wants to achieve that should align with the vision and mission. - Leadership styles - Autocratic leadership: Involves making decisions without consulting others.  - Democratic leadership: Involves managers and employees working together to share perspectives to make informed decisions. - Laissez-faire leadership: How managers can set goals/targets that employees are free to do what it takes to accomplish. - Managerial skills - Conceptual skills: Considers whether an employee can see the big picture through their analytical and critical thinking skills. - Human skills: Interpersonal skills required to interact with internal/external stakeholders and maintain and develop relationships. - Technical skills: The knowledge and ability to perform tasks within a specific discipline. - Maslow’s hierarchy of needs: This considers motivation of employees to fulfill their needs in the following order: physiological, safety, love/belonging, esteem, and self-actualization. - Mission statement: Describes the current purpose for an organization and what the company does, essentially how it currently works towards achieving its longer-term vision. - Organizational chart: Provides a great glimpse of how people are organized, detailing the number of employees and various functions, and showing positions and relationships (who’s accountable to who). - Values: Set of fundamental beliefs that guide decision making. - Vision: Describes why an organization exists and where it wants to be by articulating an attractive future. It essentially provides a roadmap for an organization. Unit 8 - Advertising: Media communication that can be used to promote a brand or sell a product, which can include radio/tv commercials and print or digital ads. - Brand: A name, symbol, or design that distinguishes a company and its products from their competition (Entrepreneur, n.d.). - Brand equity: The overall value for a brand, strengthened by awareness and customer loyalty. - Break-even analysis: Helps evaluate profitability of a product by calculating the break-even point, the point at which sales cover expenses and any units sold above that point is when you start making a profit. - Business-to-Business (B2B): Involves a company selling to other companies that may or may not be the end users for a product. - Business-to-Customer (B2C): Involves a company selling directly to consumers who are generally the end users for a product. - Buzz marketing: Encourages consumers to try products and services and then publicly share their reviews and opinions on them. - Concept testing: The process of sharing a product idea with potential customers to obtain feedback. - Crowdsourcing: Where you can mobilize the ideas and perspectives of individual customers to help design a product (Houlihan & Harvey, 2018). - Customer Relationship Management (CRM): Systems that capture data to support interactions and encourage engagement with customers to build long-term relationships. - Direct marketing: Promotional activities that link a producer directly with customers, such as telemarketing, mail, or emails. - Distribution channel: How products move from the producer to the consumer. - Intermediaries: Individuals or organizations in the middle of a distribution channel that help move products from producers to consumers. - Market: Defined as customers with wants and needs that have both an interest and resources to make a purchase. - Market research: The process of collecting information to understand customers in order to make informed decisions on how to satisfy their needs with product offerings. - Primary research: Involves gathering your own information directly. This can include the use of surveys you conduct, interviews (including focus groups), or observation. - Secondary research: Examines information and statistics that a2qrea already available. This can include published surveys, research studies, datasets, or existing company records.  - Market segmentation: The process of dividing a total market into customer segments (groups) that have similar characteristics or needs (Inc., n.d.). - Marketing: The process of creating, communicating, and delivering product offerings that have value for customers (AMA, n.d.). - Marketing mix (4Ps): How a company can create interest and influence demand for their products through decisions around the four Ps — product, price, place, and promotion. - Mass marketing: Where a company attempts to reach a wider audience with a single product offering. - Penetration pricing: When introducing a product, setting a low initial price. This can help enter a competitive market or build up a customer base. - Personal selling: Face-to-face promotional interactions between a seller and buyer. - Price skimming: When introducing a product, setting a high initial price (to optimize profit when there’s little competition). - Product differentiation: Promotes benefits of a product that make it unique compared to similar offerings from competitors (MaRS, 2015). - Product life cycle: Looks at how sales for a product rises and falls over four stages — introduction, growth, maturity, and decline. - Product line: A group of similar products sold by a company (Twin, 2019). - Product mix: A combination of all the product lines sold by a company. - Promotion mix: Activities that a company can use to motivate customers to take action and buy, which includes advertising, public relations, sales promotion, direct marketing, and personal selling (Claessens, 2015). - Public Relations: Activities that drive a positive image and generate publicity for a company and its products. - Relationship marketing: Aims to develop long-term relationships with customers to foster customer loyalty and interaction (Olenski, 2013). - Sales promotions: Techniques that can motivate a customer to buy, which can include incentives like coupons, rebates, or free samples. - Target market: A customer segment that is sizable, reachable, and profitable. - Test marketing: Provides an opportunity to launch and test a new product on a small-scale in order to get customer feedback. Unit 10 - Apprenticeship programs: Training where new staff work alongside experienced employees to master skills. - Bonus plans: Additional money or gifts for excellent performance of achieving goals. - Cafeteria-style (flexible) benefits plans: Where employees can choose from a select set of benefits that best suit their needs up to specific dollar amounts. - Coaching: Where one-on-one discussions can take place within an organization to support emerging leaders with their goals and career direction. - Commission plans: Pay based on a percentage of sales. Prevalent for sales professionals and encourages employees to drive more sales. - Compensation: The remuneration provided to employees in exchange for their services. - Compressed workweek: Employees that work their required hours over a reduced number of days to have a longer weekend. - Contingent workers: Workers who don’t have regular full-time employment that take on short-term projects or can fill temporary needs. - Employee Lifecycle (ELC): Considers how employees progress through a company, and consists of recruitment, onboarding, development, retention, and offboarding. - Recruitment: The process of attracting and selecting quality talent that best fit the needs for the roles within a company. - Onboarding: The process of providing orientation for new employees. It ensures they have the time and resources to learn about the organization, their role/responsibilities, and meet their co-workers. - Development: Focuses on enhancing the potential of employees, both professionally and personally, by providing learning opportunities to develop their skills and abilities in both the short and long term. - Retention: Focuses on continually motivating and engaging your employees, with the aim to manage employee satisfaction to keep top talent. - Offboarding: Managing employee departures (voluntary and involuntary). - Flextime plans: Where employees can arrive and leave work at times that can accommodate their personal and professional responsibilities, as long as they are at work within core times (e.g., between 10:00 AM and noon). - Fringe benefits: Optional benefits that a company may grant which can help attract and retain employees. - Hourly wage: Pay based on the number of hours work. Prevalent for entry-level or part-time roles. - Job description: Specifies the responsibilities, working conditions, connection with other roles, and skills an employee should have to be successful in a role. - Job rotation: Training to groom future leaders by providing them with exposure to different areas of the business, gaining new skills/perspectives, and connecting with many others in the company. - Job simulations: Training which involves the use of equipment duplicating job conditions to learn in a safe environment with no harm to the employee, customers, or company overall. - Off-the-job training: Where employees may learn off-site and away from the office in a comfortable environment (where removing employees from the workplace and their day-to-day tasks demonstrates the importance and commitment to learning) or through external conferences (which can help employees network with others in industry while enhancing their knowledge and skills). - On-the-job training: Where employees can learn by doing or watching others. - Online training: Where learning can be accessed online by many employees when it’s most convenient for them. These can include live webinars and workshops or online courses. - Pay equity: Pay equity looks at equal pay for work of equal value where all employees are assessed on neutral performance factors such as skill, effort, and responsibility. Internal equity looks at whether people within an organization are compensated fairly. External equity looks at how compensation may compare to competitors or industry averages. - Performance appraisals (evaluations): Measure actual performance against standards to make decisions (e.g., training needs, compensation, promotions). - Profit sharing: A bonus awarded if the company is able to reach certain targets (e.g., profits), and shared with the team that helped reach them. - Salary: Paid a fixed amount per year, and may be adjusted annually based on employee performance. - Stock options: An opportunity to purchase stock at a preferred price. - Telework (or telecommuting): Where employees have the option to work from home or outside of the office, as technology enables them to stay connected (Governement of Canada, 2018). - Turnover rate: The percentage of employees that leave the company each year. - Understudy positions: Where emerging leaders (in roles like Assistant Vice President) support leaders with planning and tasks, effectively taking on more and more responsibilities that they might inherit in the future.