BUS 100 Review Questions (Ch.1-20) PDF

BUS 100 Review Questions (Ch.1-20) Chapter 1 1. What is a business? What are the benefits of business to society? A business is an organization that produces goods or provides services to earn a profit. Benefits to society: Employment: Provides jobs and income for individuals. Innovation: Drives technological and product advancements. Economic Growth: Contributes to GDP and wealth creation. Improved Standards of Living: Supplies goods and services that meet needs and improve quality of life. Social Contributions: Supports communities through corporate social responsibility (CSR) initiatives. 2. List some of the social concerns of a business. Environmental sustainability and pollution control. Ethical labor practices and fair wages. Diversity, equity, and inclusion. Product safety and consumer protection. Transparency and ethical governance. 3. What are the four types of economies? Provide a brief summary of each. 1. Traditional Economy: ○ Relies on customs and traditions. ○ Focuses on subsistence farming, hunting, and bartering. 2. Command Economy: ○ Controlled by the government, which makes all economic decisions. ○ Examples include socialism and communism. 3. Market Economy: ○ Decisions are driven by supply, demand, and competition. ○ Limited government intervention (e.g., capitalism). 4. Mixed Economy: ○ Combines elements of command and market economies. ○ Most modern economies, like Canada, are mixed. 4. Discuss the various types of competition. 1. Perfect Competition: Many sellers offer identical products, and no single seller controls the market. 2. Monopolistic Competition: Many sellers provide similar but differentiated products (e.g., branding). 3. Oligopoly: A few large companies dominate the market (e.g., automotive industry). 4. Monopoly: One seller controls the entire market, with no competition (e.g., utility companies in some areas). 5. What is product differentiation? When would a business use this strategy? Product differentiation involves making a product unique through features, quality, branding, or customer service. When used: To gain a competitive advantage in a saturated or monopolistic competition market. To justify higher pricing and build brand loyalty. 6. How is the equilibrium price determined? The equilibrium price is set where supply equals demand in a market. At this price, the quantity of goods supplied matches the quantity demanded, avoiding surpluses or shortages. 7. Explain the four phases of the business cycle. 1. Expansion: Economic growth, rising GDP, low unemployment, and increased consumer spending. 2. Peak: The economy reaches its maximum output, often leading to inflationary pressures. 3. Contraction (Recession): Economic slowdown, reduced GDP, higher unemployment, and lower spending. 4. Trough: The economy bottoms out, marking the end of contraction and the beginning of recovery. 8. Define GDP. What other indicators are used to determine the health of the economy? GDP (Gross Domestic Product): The total market value of all goods and services produced within a country in a given time period. Other indicators: Unemployment Rate: Measures labor market health. Inflation Rate: Indicates changes in purchasing power. Consumer Confidence Index: Reflects consumer optimism about the economy. Industrial Production: Tracks output in manufacturing and utilities. 9. What is the consumer price index? How is this index related to inflation? Consumer Price Index (CPI): Measures changes in the average prices of a basket of goods and services over time. Relation to Inflation: CPI indicates inflation or deflation trends. Rising CPI values signify inflation, while declining values indicate deflation. 10. What is the difference between monetary policy and fiscal policy? Monetary Policy: Managed by the central bank (e.g., Bank of Canada) to control money supply and interest rates. Aims to stabilize inflation and promote economic growth. Fiscal Policy: Managed by the government to influence the economy through taxation and public spending decisions. Used to stimulate growth or curb inflation. Chapter 2 1. What are the three primary components of business ethics? Briefly describe each. 1. Individual Standards and Values: Personal principles and moral beliefs that guide decisions. 2. Managerial Influence: Ethical tone set by managers and leaders through policies and actions. 3. Organizational Systems: Policies, codes of conduct, and structures that support ethical practices. 2. What are the factors that affect the level of ethical behavior in an organization? Individual Ethics: Personal values and moral principles of employees. Organizational Culture: Shared values, norms, and practices within the workplace. Leadership Influence: Ethical behavior modeled by leaders and managers. External Environment: Legal requirements, industry standards, and societal expectations. 3. What are four ways companies can promote ethical behavior? 1. Code of Ethics: Develop and enforce a clear ethical code of conduct. 2. Ethics Training: Educate employees about ethical decision-making and compliance. 3. Open Communication: Encourage transparency and provide channels for reporting misconduct. 4. Accountability Measures: Reward ethical behavior and enforce consequences for unethical actions. 4. To make ethical decisions, what guidelines should managers follow? Recognize the ethical dilemma. Evaluate options considering legal, organizational, and societal standards. Consider the impact on stakeholders. Make a decision that aligns with the organization’s ethical principles. Review the decision's outcomes and refine practices if necessary. 5. What is a whistle-blower? A whistle-blower is an individual who reports unethical, illegal, or harmful practices within an organization to internal authorities or external bodies. 6. Discuss the economic model of social responsibility. How does this differ from the socioeconomic model of social responsibility? Economic Model: Focuses on maximizing profits while complying with laws and regulations, emphasizing shareholders' interests. Socioeconomic Model: Goes beyond profit by addressing societal and environmental concerns, emphasizing all stakeholders' interests. 7. List the various types of stakeholders of an organization. Internal Stakeholders: Employees, managers, and shareholders. External Stakeholders: Customers, suppliers, government, community, and the environment. 8. What are the four basic consumer rights? Briefly explain each. 1. Right to Safety: Protection from harmful products. 2. Right to Be Informed: Access to accurate and complete product information. 3. Right to Choose: Freedom to select from various products and services. 4. Right to Be Heard: Ability to voice concerns and receive responses. 9. Define sustainability. What are some of the different sustainability strategies used in business? Sustainability: Practices that meet present needs without compromising the ability of future generations to meet theirs. Strategies: Reducing energy and resource consumption. Adopting renewable energy sources. Minimizing waste through recycling and reuse. Designing eco-friendly products. 10. Define green marketing. Green Marketing: The promotion of environmentally friendly products, practices, or initiatives to appeal to eco-conscious consumers. Examples: Highlighting sustainable packaging. Communicating carbon-neutral operations. Certifying products as organic or biodegradable. Chapter 3 1. Differentiate between an absolute advantage and a comparative advantage. Absolute Advantage: When a country can produce a good or service more efficiently than any other country. Comparative Advantage: When a country can produce a good or service at a lower opportunity cost than others, even if it does not have an absolute advantage. 2. Define exporting and importing and explain the benefits of each. Exporting: Selling goods or services to foreign markets. ○ Benefits: Increases revenue, diversifies markets, and enhances competitiveness. Importing: Buying goods or services from foreign markets. ○ Benefits: Access to a wider variety of products, lower costs, and access to resources not available domestically. 3. What is a trade deficit? A trade deficit occurs when a country's imports exceed its exports, resulting in a net outflow of domestic currency to foreign markets. 4. How might changes in currency exchange rates impact international trade? Currency Appreciation: Makes a country’s exports more expensive and imports cheaper, potentially reducing export demand. Currency Depreciation: Makes exports cheaper and imports more expensive, potentially boosting export demand and reducing import volume. 5. What are the two most common types of trade restrictions? Explain each. 1. Tariffs: Taxes imposed on imported goods to make them more expensive and protect domestic industries. 2. Quotas: Limits on the quantity of a specific good that can be imported, restricting supply and protecting domestic markets. 6. Discuss various reasons countries impose trade restrictions. Protect domestic industries and jobs. Safeguard national security. Prevent dumping (selling goods below cost to undermine local markets). Protect infant industries until they become competitive. Respond to unfair trade practices by other countries. 7. What is an embargo? Which countries does Canada have an embargo against? An embargo is a government-imposed ban on trade with a specific country, often for political or security reasons. Canada’s Embargoes: Canada has trade embargoes against countries such as North Korea and Iran, primarily due to security and human rights concerns. 8. Discuss how the WTO, the IMF, and the World Bank promote global economic development. WTO (World Trade Organization): Facilitates international trade agreements, resolves disputes, and reduces trade barriers. IMF (International Monetary Fund): Provides financial support and economic advice to stabilize economies and promote global monetary cooperation. World Bank: Funds development projects and provides low-interest loans to reduce poverty and support economic growth. 9. What are some of the primary benefits of CUSMA? What are the main criticisms? Benefits of CUSMA (Canada-United States-Mexico Agreement): Modernized trade rules, including digital trade and intellectual property. Enhanced labor and environmental protections. Reduced tariffs and barriers to North American trade. Criticisms: Concerns about increased U.S. influence over Canadian and Mexican policies. Limited benefits for small businesses and non-exporting sectors. Increased competition for certain domestic industries. 10. Briefly explain the differences among an acquisition, a joint venture, and a strategic alliance. Acquisition: A company purchases another company to gain control of its operations and assets. Joint Venture: Two or more companies collaborate to create a new entity, sharing risks, profits, and control. Strategic Alliance: Two or more companies collaborate on specific goals without forming a new entity or merging operations. Chapter 4 1. What are the advantages of incorporating technology into business operations? Increased Efficiency: Automation of repetitive tasks and faster processing speeds. Cost Savings: Reduced operational costs, particularly in terms of labor and time. Improved Communication: Enhanced collaboration through digital tools like emails, messaging, and video conferencing. Better Decision Making: Access to real-time data and advanced analytics to make informed choices. Enhanced Customer Experience: Personalization and more convenient services for customers. 2. Explain the concepts companies must consider when developing new technologies and how they are related. Innovation: Developing new products or services that meet market needs or improve existing ones. Scalability: Ensuring the technology can grow with the company as demands increase. Security: Protecting data and systems from cyber threats. Cost-effectiveness: Balancing the cost of development with potential returns. User-friendliness: Ensuring the technology is accessible and easy for employees and customers to use. These concepts are interrelated as developing technology that is innovative but not scalable or secure can limit its long-term success. Cost-effectiveness and user-friendliness make the technology more viable in competitive markets. 3. What is a management information system (MIS)? What are two key benefits it provides? An MIS is a system used by organizations to collect, process, store, and analyze data to support decision-making. Key Benefits: Improved Decision Making: MIS provides data-driven insights that help managers make informed decisions. Operational Efficiency: Streamlines business processes, reducing redundancy and improving workflow. 4. Discuss the three primary functions of an MIS. 1. Data Collection: Gathers data from internal and external sources. 2. Data Processing: Converts raw data into useful information for decision-making. 3. Information Dissemination: Distributes processed data in the form of reports and dashboards for managers. 5. What is cloud computing? What benefits does it provide? Cloud computing refers to the delivery of computing services like storage, processing power, and software over the internet. Benefits: Cost Efficiency: Eliminates the need for expensive hardware and infrastructure. Scalability: Allows businesses to scale up or down based on demand. Accessibility: Employees and clients can access data and tools from anywhere with an internet connection. Disaster Recovery: Data is securely backed up in the cloud, minimizing risks of data loss. 6. Discuss six common online business models companies use to generate revenue or decrease expenses. 1. E-commerce: Selling products or services directly to consumers via an online store. 2. Subscription Services: Charging customers for access to a service or product on a recurring basis (e.g., Netflix). 3. Freemium: Offering basic services for free while charging for premium features (e.g., Spotify). 4. Affiliate Marketing: Earning commissions by promoting others' products on a website or platform. 5. Advertising Revenue: Earning money by displaying ads on websites or apps. 6. Crowdsourcing: Generating income through collective efforts, such as fundraising or pre-selling products. 7. What are the six major categories of online marketing techniques? Explain each. 1. Search Engine Optimization (SEO): Improving a website's visibility on search engines like Google to attract organic traffic. 2. Content Marketing: Creating and distributing valuable content to attract and engage an audience. 3. Social Media Marketing: Using platforms like Facebook, Instagram, and Twitter to promote products and interact with customers. 4. Email Marketing: Sending targeted messages to prospects and customers to nurture relationships and drive sales. 5. Pay-Per-Click (PPC) Advertising: Paying for ads that appear on search engines or websites, where payment is based on clicks. 6. Influencer Marketing: Partnering with influencers to promote products to their followers. 8. Define Web analytics and describe how it can be useful to a company. Web analytics involves tracking and analyzing website traffic to understand visitor behavior. How it’s useful: Improves User Experience: Identifies bottlenecks and improves website navigation. Tracks Marketing ROI: Measures the effectiveness of online campaigns and marketing efforts. Enhances Decision Making: Provides actionable data to optimize website content and design. 9. How did companies communicate with their various stakeholders in the past? As technology advances, what are three common goals for using online tools to interact with company stakeholders? Past Communication Methods: ○ Traditional Mail ○ Phone Calls ○ Face-to-face Meetings ○ Printed Advertisements Three common goals for using online tools: 1. Increased Engagement: Enabling direct and interactive communication with stakeholders through social media, emails, and forums. 2. Real-Time Communication: Offering instant updates and responses through live chats, video conferencing, and social media platforms. 3. Cost Efficiency: Reducing the cost of communication by using digital platforms like email and online meetings. 10. Discuss how the use of online technology has evolved over the years. Early Stages: Basic email communication, static websites, and early e-commerce. Mid-Evolution: Social media emerged, SEO, and content marketing became integral to businesses. Current State: Advanced data analytics, artificial intelligence, automation, and cloud technologies are now heavily integrated. More businesses are using mobile platforms and engaging with customers through apps, AI chatbots, and personalized online experiences. 11. What are three ways a business must adapt to the increase of mobile users? 1. Responsive Web Design: Ensuring websites are optimized for mobile devices to provide a seamless experience. 2. Mobile Apps: Developing apps that offer features tailored for mobile users and improve customer engagement. 3. Mobile Payment Integration: Offering mobile payment options, such as Apple Pay or Google Wallet, to streamline transactions for customers using mobile devices. Chapter 5 1. Differentiate between an entrepreneur and an intrapreneur. Entrepreneur: An individual who starts and operates their own business, taking on the risks and rewards associated with ownership. They are responsible for creating a new product, service, or business model. Intrapreneur: An employee within an organization who acts like an entrepreneur, creating new ideas or projects within the company. They use the company's resources to innovate and drive change but without the risk of ownership. 2. Discuss five primary characteristics that may influence the success of an entrepreneur. 1. Risk Tolerance: Entrepreneurs must be willing to take calculated risks to seize opportunities and grow their business. 2. Resilience: The ability to bounce back from setbacks and continue pushing forward is crucial for overcoming obstacles. 3. Innovative Thinking: The ability to think creatively and come up with new solutions to problems can give an entrepreneur a competitive edge. 4. Leadership Skills: Entrepreneurs need strong leadership skills to motivate their team and manage business operations effectively. 5. Vision: A clear vision of where the business is headed and a strategy to achieve that vision help guide decision-making and long-term success. 3. What are the two main characteristics of small businesses? What are the advantages and disadvantages of being a small business owner? Main Characteristics of Small Businesses: ○ Independently Owned: Typically privately owned, with fewer than 100 employees. ○ Locally Operated: They often serve local or niche markets and focus on providing personalized products or services. Advantages of Being a Small Business Owner: ○ Flexibility and Control: Owners can make decisions quickly and have more control over business operations. ○ Personalized Service: Small businesses can focus on building strong relationships with customers. Disadvantages of Being a Small Business Owner: ○ Limited Resources: Small businesses may face challenges in securing funding and scaling their operations. ○ High Risk: With limited financial cushion, the failure rate for small businesses can be higher. 4. What are three important factors that contribute to the high number of start-ups in Canada? Explain each. 1. Supportive Government Programs: Canada has various government programs and grants, such as the Canada Small Business Financing Program, to assist new entrepreneurs. 2. Access to Capital: The availability of funding options like venture capital, angel investors, and government-backed loans supports the growth of start-ups. 3. Cultural Openness to Innovation: Canadian culture encourages innovation and entrepreneurship, with a supportive network of mentors and start-up incubators. 5. How are small businesses advancing the Canadian economy? Job Creation: Small businesses are the largest employers in Canada, contributing significantly to job creation across various sectors. Innovation: Small businesses drive innovation by introducing new products, services, and technologies. Local Economic Development: Small businesses contribute to the growth of local communities and stimulate economic activity by sourcing materials and services locally. 6. What is a business plan? What basic purposes does a business plan serve? A business plan is a formal document that outlines the objectives, strategies, financial projections, and operational plans of a business. Basic Purposes: Guiding the Business: Helps entrepreneurs outline their vision, goals, and strategies for growth. Securing Funding: Acts as a tool to attract investors, lenders, or partners by providing a clear plan for business success. Risk Management: Identifies potential risks and offers strategies for mitigating them. 7. What are four essential questions that a business plan should answer? 1. What is the business concept? A description of the product or service and the market need it addresses. 2. How will the business make money? Details of revenue generation, pricing strategy, and financial projections. 3. Who is the target market? A description of the target customers and their needs. 4. What are the operational plans? Information on staffing, supply chains, production processes, and technology needs. 8. What is a business model? Describe the key components. A business model defines how a company creates, delivers, and captures value. It explains how a business makes money and sustains itself. Key Components: 1. Value Proposition: What makes the product or service appealing to customers. 2. Revenue Model: How the business generates income (e.g., sales, subscription). 3. Customer Segments: The specific groups of customers the business serves. 4. Channels: How the business delivers its product or service to customers (e.g., online, retail). 5. Key Resources and Activities: Essential assets and actions required to run the business. 9. How are social enterprises different from and/or similar to traditional businesses? Differences: ○ Social enterprises focus on generating social or environmental impact, rather than solely maximizing profits. ○ Their revenue is reinvested into their mission, rather than distributed to shareholders. Similarities: ○ Like traditional businesses, social enterprises operate for profit and require efficient management and strategy. ○ Both aim to meet market needs and sustain operations. 10. Discuss sources of funding for small businesses. 1. Personal Savings: Many small business owners invest their own money to start their business. 2. Bank Loans: Traditional loans from financial institutions, often requiring collateral. 3. Venture Capital: Investment from firms or individuals in exchange for equity ownership. 4. Angel Investors: Wealthy individuals who provide funding in exchange for ownership or convertible debt. 5. Crowdfunding: Raising small amounts of money from a large number of people, usually through online platforms. 6. Government Grants and Loans: Various programs provided by governments to support small businesses. 11. What is a franchise? What is franchising? Franchise: A business model in which an individual (the franchisee) is granted the right to operate a business using the branding, business model, and support systems of an established company (the franchisor). Franchising: The method by which a franchisor licenses the rights to its brand and business system to a franchisee, usually in exchange for an initial fee and ongoing royalties. It allows entrepreneurs to start a business with an established brand and support system while reducing some of the risks of starting from scratch. Chapter 6 1. Three Main Forms of Ownership Structure in Canada 1. Sole Proprietorship ○ Advantages: Simple to set up and operate, full control by the owner, fewer regulatory requirements, and profits go directly to the owner. ○ Disadvantages: Unlimited liability, meaning personal assets are at risk; limited access to capital; and the business dies with the owner. 2. Partnership (General or Limited) ○ Advantages: More capital can be raised than in a sole proprietorship; shared management; and income is passed directly to partners for tax purposes. ○ Disadvantages: General partners face unlimited liability, and disputes between partners can arise. Partnerships also have limited lifespan and transfer of ownership can be complex. 3. Corporation ○ Advantages: Limited liability for shareholders, easier access to capital through share sales, and perpetual existence. ○ Disadvantages: More regulations and higher setup costs; profits are subject to corporate (dual) taxation; and complex record-keeping requirements. 2. General Partner vs. Limited Partner General Partner: Manages the partnership and has unlimited liability for debts. Limited Partner: Contributes capital but has limited liability, not involved in daily management, and liability is limited to their investment. 3. Legal Rights of a Corporation A corporation in Canada has the right to: Own property Enter into contracts Sue and be sued Issue stocks and raise capital Have perpetual existence, independent of its owners 4. Public vs. Private Corporation Public Corporation: Sells shares to the public on a stock exchange, has to disclose financial information publicly, and is regulated by securities law. Private Corporation: Shares are held privately, with fewer disclosure requirements, and generally has a smaller number of shareholders. 5. Key Considerations for Choosing an Ownership Structure Liability: Owners may prefer limited liability to protect personal assets. Taxation: Some structures allow income to pass through to personal tax, avoiding corporate tax. Control: Different structures offer varying degrees of control. Capital Needs: Corporations generally make it easier to raise capital through shares. Complexity and Cost: Corporations are more complex and costly to establish and run than sole proprietorships or partnerships. 6. Pass-Through Taxation vs. Corporate (Dual) Taxation Pass-Through Taxation: Business income is reported on the owner’s personal tax return, avoiding corporate tax. This applies to sole proprietorships and partnerships. Corporate (Dual) Taxation: Corporations are taxed on profits, and shareholders are also taxed on dividends, leading to “double taxation.” 7. Why Choose a Corporation Despite Double Taxation? Corporations offer benefits like limited liability, better access to capital, and perpetual existence. For companies needing significant investment, limited liability, or continuity, these benefits may outweigh the tax disadvantages. 8. Limited vs. Unlimited Liability Limited Liability: Owners' personal assets are protected from business debts, typically in corporations or limited partnerships. Unlimited Liability: Owners are personally liable for all business debts and obligations, common in sole proprietorships and general partnerships. 9. Ease of Start-Up and Administration for Each Ownership Structure Sole Proprietorship: Easiest to start with minimal paperwork and low administrative burden. Partnership: Requires a partnership agreement and some administrative setup but is generally straightforward. Corporation: Most complex, requiring registration, record-keeping, and compliance with corporate law. 10. Division of Profits for Each Ownership Structure Sole Proprietorship: All profits go to the owner. Partnership: Profits are divided among partners as per the partnership agreement. Corporation: Profits are distributed as dividends to shareholders or retained in the business. 11. Traditional Incorporated Businesses vs. Co-operatives Incorporated Business: Operates for profit, with owners/shareholders holding decision-making power based on their shares. Co-operatives: Member-owned with democratic decision-making (one member, one vote) and profits distributed among members, often based on their level of participation. Co-ops focus on community benefit, while traditional corporations focus on maximizing shareholder returns. Chapter 7 1. Four Functions of Management 1. Planning: Setting goals and outlining steps to achieve them, including forecasting future needs and resources. 2. Organizing: Arranging resources and tasks to implement the plan effectively, often by assigning roles and responsibilities. 3. Leading: Guiding and motivating employees to work toward organizational goals, establishing a positive culture. 4. Controlling: Monitoring progress, evaluating outcomes, and making adjustments to stay aligned with objectives. 2. Types of Organizational Plans 1. Strategic Plans: Long-term, overarching plans that set the direction for the organization as a whole. 2. Tactical Plans: Shorter-term, specific plans that implement parts of the strategic plan, usually at the departmental level. 3. Operational Plans: Day-to-day plans that outline specific tasks and activities to meet immediate goals. 4. Contingency Plans: Plans for unforeseen events, providing alternatives in case of unexpected disruptions. 3. Differentiating Leading, Motivating, Directing, and Controlling Leading: Involves inspiring and guiding employees to achieve goals. Motivating: Encouraging employees to stay committed and perform well. Directing: Providing clear instructions and ensuring tasks align with organizational goals. Controlling: Monitoring progress, assessing outcomes, and making adjustments to improve performance. 4. Classification and Levels of Management Managers are classified by their levels within the organizational hierarchy: 1. Top Management: Executives like CEOs who set strategic goals and direction. 2. Middle Management: Managers who implement top management’s strategies and oversee departments. 3. First-Line Management: Supervisors who directly manage day-to-day operations and oversee non-managerial staff. 5. Key Skills for Managers 1. Technical Skills: Expertise in a specific area, crucial for lower-level managers. 2. Human (Interpersonal) Skills: Ability to work well with others, essential at all levels. 3. Conceptual Skills: Ability to see the big picture, think strategically, and plan for the future, especially important for top management. 6. Leadership vs. Management Leadership: The ability to inspire and influence others toward a vision. Leaders focus on change and setting direction. Management: Involves planning, organizing, leading, and controlling within a structured environment to meet organizational goals. Management emphasizes stability and order. 7. Primary Styles of Leadership 1. Autocratic: Leader makes decisions unilaterally, with minimal input from others. Advantages: Fast decisions, unified and consistent vision. Disadvantages: Risk of low morale, can stifle creativity 2. Participative: Leader includes team members in decision-making, fostering a collaborative approach. Advantages: Helps team understand goal, Increased commitment from team. Disadvantages: Decisions take longer, team may react poorly when input is not accepted 3. Laissez-Faire: Leader provides minimal direction, allowing employees to self-manage and make their own decisions. Advantages: Uses full talents of skilled technicians, reduces the number of managers. Disadvantages: Leaders can lose control of the process, morale can drop 8. Managerial Decision-Making Process 1. Identifying the Problem: Recognizing an issue or opportunity that needs addressing. 2. Generating Alternatives: Brainstorming possible solutions or courses of action. 3. Evaluating and Selecting Alternatives: Analyzing options and choosing the best solution. 4. Implementing and Monitoring the Decision: Acting on the decision and tracking its effectiveness. 9. Five Critical Success Factors 1. Customer Satisfaction: Ensuring products and services meet customer expectations. 2. Employee Engagement: Motivated, committed employees contribute to success. 3. Quality: Consistently delivering high-quality products or services. 4. Innovation: Continuously improving or creating new products or processes. 5. Efficiency: Minimizing waste and optimizing resources to increase profitability. 10. SWOT Analysis A SWOT Analysis evaluates: Strengths (Internal): Internal resources or capabilities that give a competitive advantage. Weaknesses (Internal): Internal limitations or areas needing improvement. Opportunities (External): External factors the organization could exploit for growth. Threats (External): External challenges that could impact the organization negatively. Chapter 8 1. Organization Design Organization design is the process of structuring an organization’s roles, responsibilities, systems, and processes to align with its goals and strategy. It involves creating an optimal setup to improve efficiency, communication, and adaptability. 2. Common Objectives in Building an Organization 1. Efficiency: Maximizing productivity while minimizing costs and waste. 2. Effectiveness: Ensuring that the organization meets its goals and fulfills its mission. 3. Adaptability: Building flexibility to respond to changes in the market or environment. 4. Employee Satisfaction: Creating a supportive and motivating work environment to retain talent. 3. Job Design, Job Specialization, and Job Rotation Job Design: Determining the responsibilities, duties, and processes of a job to make it engaging and productive. Job Specialization: Breaking down work into specific tasks assigned to individuals, increasing efficiency in repetitive work. Job Rotation: Moving employees between jobs to broaden skills and reduce monotony. 4. Departmentalization and Its Common Forms Departmentalization is grouping jobs or functions into specific departments based on similarity. Common forms include: Functional: Grouping by function (e.g., marketing, finance). Product: Organizing by product line or service. Geographical: Grouping by region or location. Customer: Dividing based on customer type or needs. Process: Organizing around stages in the production process. 5. Centralized vs. Decentralized Organization Centralized Organization: Decisions are made at the top level, maintaining tight control and uniformity, often more efficient but can be less responsive. Decentralized Organization: Decision-making authority is spread throughout levels, empowering employees but sometimes leading to inconsistent practices. Centralized structures are typically more efficient, while decentralized structures are generally more empowering. 6. Span of Management Span of management (or span of control) refers to the number of subordinates a manager directly oversees. Wide Span: ○ Advantages: Fosters faster decision-making, reduces costs with fewer managers. ○ Disadvantages: Can lead to manager overload and reduced supervision. Narrow Span: ○ Advantages: Allows closer supervision and support for employees. ○ Disadvantages: Can be costly and slow down decision-making. 7. Tall vs. Flat Organization Tall Organization: Has many hierarchical levels, resulting in a narrow span of control. Provides closer supervision but can slow communication. Flat Organization: Has fewer levels and a wider span of control. Encourages quicker decision-making and better communication but may require more self-management from employees. 8. Basic Forms of Organizational Structure 1. Functional Structure: Organizes by specific functions or roles (e.g., marketing, finance). 2. Divisional Structure: Groups based on divisions like product lines, regions, or customer segments. 3. Matrix Structure: Combines functional and divisional structures, where employees report to both a functional and project manager. 9. Mechanistic vs. Organic Structure Mechanistic Structure: Highly formalized and hierarchical, with a clear chain of command and rigid job roles. Suited for stable environments. Organic Structure: Flexible, with fewer rules, broader job roles, and collaborative decision-making. Ideal for dynamic and innovative environments. 10. Corporate Culture and Benefits of a Culture of Trust Corporate Culture: The shared values, beliefs, and practices within an organization that shape behavior and interactions. Benefits of a Culture of Trust: Increases employee morale and engagement Encourages innovation and risk-taking Strengthens teamwork and collaboration Reduces turnover by creating a supportive environment Chapter 9 1. Importance of Human Resources Management (HRM) in Today’s Organizations HRM plays a key role in achieving organizational goals by recruiting the right talent, developing employee skills, fostering a positive workplace culture, and ensuring legal compliance. Effective HRM aligns employees’ efforts with strategic objectives, increases productivity, and promotes retention, ultimately driving the organization toward its goals. 2. Human Resources Management Process The HRM process includes: 1. Recruitment and Selection: Finding and hiring suitable candidates. 2. Onboarding: Integrating new employees into the organization. 3. Training and Development: Providing resources to enhance skills. 4. Performance Management: Evaluating and improving employee performance. 5. Compensation and Benefits: Offering rewards and benefits to attract and retain employees. 6. Compliance: Ensuring adherence to employment laws and regulations. 3. Recruitment and Current Recruitment Methods Recruitment is the process of attracting qualified candidates for job openings. Current methods include: Online Job Portals: Websites like LinkedIn, Indeed, and Glassdoor. Social Media: Using platforms like LinkedIn, Facebook, and Twitter. Employee Referrals: Encouraging current employees to recommend candidates. Job Fairs and University Partnerships: Recruiting at events and collaborating with educational institutions. 4. Advantages of Workplace Diversity Increased Innovation: Diverse teams bring different perspectives, fostering creativity. Enhanced Problem-Solving: Varied viewpoints help identify and solve issues effectively. Broader Market Reach: A diverse workforce can better understand and serve a global or varied customer base. Improved Employee Satisfaction: Inclusivity creates a positive environment that attracts top talent. 5. Training vs. Development Training: Focuses on teaching specific skills or knowledge needed for current roles. It is often short-term and task-oriented. Development: Aims to improve overall competencies and prepare employees for future roles. Development is typically long-term and focuses on personal and career growth. 6. Best-Suited Training Methods Some commonly effective training methods include: On-the-Job Training: Practical experience under guidance, suited for hands-on learners. Workshops and Seminars: Interactive, allows for skill-building in a controlled environment. Online Courses: Flexible and convenient, ideal for tech-savvy learners who prefer self-paced study. 7. Performance Appraisal Process The performance appraisal process includes: 1. Setting Goals and Expectations: Defining job expectations and performance standards. 2. Monitoring Performance: Observing and recording performance regularly. 3. Evaluating Performance: Comparing actual performance with set goals. 4. Providing Feedback: Offering constructive feedback and discussing strengths and areas for improvement. 5. Setting Future Objectives: Setting new goals and planning development activities. 8. Compensation and How It’s Determined Compensation is the payment and benefits employees receive for their work. It’s determined based on factors like: Job role and industry standards Skills, experience, and qualifications Company budget and profitability External labor market conditions 9. Types of Compensation 1. Base Salary: Fixed, regular payment for work performed. 2. Hourly Wages: Payment based on hours worked. 3. Bonuses: Additional pay for achieving specific goals. 4. Commissions: Earnings based on sales or performance. 5. Benefits: Non-cash perks like health insurance, retirement plans, and paid time off. 6. Stock Options: Ownership shares, often offered by larger companies to align employee interests with company performance. 10. Canadian Laws Protecting Workers Some key laws include: Canada Labour Code: Sets standards for hours, wages, and working conditions. Employment Standards Act: Establishes minimum wage, overtime, and vacation requirements. Occupational Health and Safety Act (OHSA): Ensures safe working environments. Human Rights Act: Prohibits discrimination in the workplace. Pay Equity Act: Ensures equal pay for equal work across genders. Chapter 10 1. Summaries of Key Theories and Studies a. Frederick Taylor’s Scientific Management: Taylor’s theory focuses on improving efficiency through scientific analysis of tasks. By studying workflows and establishing standardized methods, he sought to increase productivity and reduce waste. b. The Hawthorne Studies: Conducted at the Western Electric Company, these studies found that workers' productivity improved when they received attention and felt that their work environment cared for them, leading to the concept of the “Hawthorne Effect.” c. Maslow’s Hierarchy of Needs: A motivational theory that proposes five levels of human needs, from basic physiological needs to self-actualization. Individuals are motivated to fulfill lower-level needs before progressing to higher-level psychological and self-fulfillment needs. d. Alderfer’s ERG Theory: A refinement of Maslow’s theory, Alderfer proposed three core needs: Existence, Relatedness, and Growth. Unlike Maslow’s strict hierarchy, ERG theory allows movement between needs based on satisfaction or frustration. e. McGregor’s Theory X and Theory Y: McGregor suggested two contrasting views of employees: Theory X: Assumes employees are inherently lazy and require strict control. Theory Y: Assumes employees are self-motivated and seek responsibility. f. Ouchi’s Theory Z: Focused on Japanese management styles, Theory Z emphasizes trust, long-term employment, and collaborative decision-making to build loyalty and improve productivity. g. Herzberg’s Two-Factor Theory: Herzberg proposed two factors in the workplace: Hygiene Factors: Aspects like pay, job security, and conditions that prevent dissatisfaction but do not motivate. Motivators: Factors such as achievement and recognition that increase job satisfaction and motivation. 2. Goal-Setting Theory and Motivation Goal-setting theory suggests that setting clear, challenging goals enhances motivation by providing direction and a sense of achievement. Specific, measurable goals encourage employees to stay focused, while regular feedback keeps them engaged and motivated. 3. Education, Training, and Employee Ownership in Motivation Education and Training Opportunities: Investing in employees’ skills shows they are valued, which can increase loyalty and motivation. Continuous learning opportunities can also keep employees engaged. Employee Ownership: Providing ownership (e.g., stock options) makes employees feel they are part of the company’s success. This sense of ownership can boost motivation and commitment, as employees are more likely to invest in the organization’s growth. 4. Flexibility as a Motivational Tool Employers use flexibility, such as remote work, flexible hours, and compressed workweeks, to attract and retain employees. Flexibility allows employees to balance personal and professional responsibilities, reducing stress and increasing job satisfaction, which can lead to higher productivity and lower turnover. 5. Job Enlargement, Job Enrichment, and Job Rotation Job Enlargement: Expanding an employee’s responsibilities by adding similar tasks to increase variety and reduce monotony. Job Enrichment: Adding more meaningful responsibilities, such as decision-making authority, to enhance job satisfaction. Job Rotation: Moving employees between roles to develop skills, reduce boredom, and allow employees to gain experience in different areas. 6. Types of Teams 1. Functional Teams: Teams grouped by function, like marketing or finance. 2. Cross-Functional Teams: Members from different departments working toward a common goal. 3. Self-Managed Teams: Teams that manage their own tasks and responsibilities. 4. Virtual Teams: Teams that work remotely across geographic locations, using technology to collaborate. 7. Advantages of Teamwork Compared to Working Alone 1. Diverse Perspectives: Teams bring together individuals with different skills, experiences, and viewpoints, which leads to more creative problem-solving and innovative solutions. 2. Shared Workload: Tasks are divided among team members, which can make complex projects more manageable and reduce individual stress. 3. Increased Motivation and Support: Working in a team can boost morale, as members encourage each other and share responsibilities. This support often increases motivation and job satisfaction. 4. Enhanced Learning Opportunities: Team members can learn from one another, gaining new skills and knowledge by observing others’ approaches and receiving feedback. 5. Higher Quality Outcomes: When individuals collaborate, they often produce higher-quality results due to the combined efforts, oversight, and complementary strengths. 8. Common Pitfalls of Teamwork 1. Groupthink: The desire for consensus can lead to suppressing dissenting opinions, resulting in poor decision-making and lack of critical thinking. 2. Uneven Work Distribution: Some members may carry a heavier workload than others (also known as "social loafing"), which can lead to resentment and lower morale. 3. Conflicts and Miscommunication: Differences in personalities, work styles, or miscommunication can create tension, potentially disrupting productivity and team harmony. 4. Decision-Making Delays: Team decisions often require discussion and consensus, which can slow down the process, especially if there is disagreement. 5. Loss of Individual Accountability: In teams, individual contributions can sometimes go unrecognized, which may discourage members from taking full ownership of tasks or performing their best. Chapter 11 Higher Wages: Securing fair pay for workers. Improved Working Conditions: Ensuring a safe and healthy workplace. Job Security: Protecting workers from unjust layoffs. Benefits: Negotiating for health care, pensions, and other benefits. Employee Rights: Protecting workers from discrimination and unfair treatment. 4. Reasons for Employees to Seek Union Representation Employees may want union representation to: Gain Better Wages and Benefits: Unions often help secure higher wages and better benefits. Improve Job Security: Unions can offer more protection against layoffs and unfair dismissals. Have a Collective Voice: Union representation enables workers to advocate for their rights more effectively. Address Workplace Issues: Unions provide support in resolving workplace disputes and ensure fair treatment. 5. What Is Involved in Negotiations? Negotiations, or collective bargaining, involve discussions between union representatives and employers to agree on wages, benefits, working hours, and other employment conditions. The process includes proposal exchanges, discussions, and compromise to reach a mutually acceptable labor contract. 6. How Are Labor Agreements Negotiated? Labor agreements are negotiated through collective bargaining, which typically follows these steps: 1. Preparation: Both parties outline their demands and objectives. 2. Negotiation Meetings: Union representatives and management discuss and negotiate terms. 3. Tentative Agreement: If both sides agree, they draft a preliminary agreement. 4. Ratification: Union members vote to approve or reject the agreement. 5. Implementation: Once ratified, the agreement is formalized and enforced. 7. Purpose of Conciliation Conciliation is a process where an impartial third party helps union and management resolve disputes by facilitating dialogue. Unlike mediation or arbitration, a conciliator does not make decisions but assists in reaching a voluntary agreement. 8. Difference Between Mediation and Arbitration Mediation: A mediator facilitates negotiation and encourages compromise, but does not make binding decisions. It’s a voluntary process. Arbitration: An arbitrator hears both sides and makes a binding decision. Arbitration is often a final step when other negotiation methods have failed. 9. Improvements in Compensation and Working Conditions for Canadian Workers Over the past 100 years, Canadian workers have seen significant improvements, including: Higher Wages: Adjusted for inflation, wages are generally much higher. Reduced Work Hours: Standard work hours have decreased, with a 40-hour workweek now common. Health and Safety Standards: Stringent regulations have greatly improved workplace safety. Benefits and Job Security: Many workers now receive health benefits, paid leave, and pensions. 10. Primary Laws Affecting Human Resource Management Key laws in Canada include: Canada Labour Code: Covers minimum standards for wages, hours, and conditions. Occupational Health and Safety Act (OHSA): Ensures safe working environments. Employment Standards Act: Defines minimum wage, overtime, and other standards. Human Rights Act: Protects workers from discrimination. Labour Relations Act: Governs unionization and collective bargaining. 11. Current Trends in Labor–Management Relations Recent trends in labor-management relations include: Increased Focus on Remote Work Policies: Unions and employers are negotiating terms for remote and hybrid work. Emphasis on Work-Life Balance: More focus on flexible hours, mental health support, and fair treatment. Technology and Automation: Unions are addressing the impacts of automation on job security. Diversity and Inclusion: Organizations are working with unions to create fair and inclusive workplaces. Sustainability and Green Jobs: Unions are advocating for roles in emerging green industries and sustainable practices. Chapter 12 1. What is marketing? Marketing is the process of creating, communicating, delivering, and exchanging value to meet the needs of customers and achieve organizational goals. It involves understanding customer needs, developing products or services, and using strategies to promote and distribute them effectively. 2. How did the marketing concept evolve over time? Production Orientation (1800s–early 1900s): Focused on efficient production, assuming customers prioritize affordable and widely available products. Sales Orientation (1920s–1950s): Emphasized aggressive selling and advertising to overcome competition and create demand. Marketing Orientation (1950s–1980s): Shifted to understanding and meeting customer needs as a key to success. Societal Marketing Orientation (1980s–present): Focused on balancing customer needs, company goals, and societal well-being. 3. What is the purpose of customer relationship management (CRM)? CRM aims to build and maintain strong, long-term relationships with customers. It involves using data to understand customer preferences, improve their experience, and foster loyalty, ultimately increasing customer retention and profitability. 4. What are the four elements in the marketing mix? Product: Goods or services offered to meet customer needs. Price: The cost customers pay for the product, influenced by value, demand, and competition. Place (Distribution): How and where products are made available to customers. Promotion: Strategies to communicate the product's value, including advertising, sales promotions, public relations, and personal selling. 5. What are the steps involved in a consumer purchase decision? What else influences this process? Steps: 1. Problem Recognition: Identifying a need or problem. 2. Information Search: Gathering information about solutions. 3. Evaluation of Alternatives: Comparing options based on features, price, etc. 4. Purchase Decision: Choosing and buying a product. 5. Post-Purchase Behavior: Evaluating satisfaction and potential loyalty. Influences: Cultural, social, personal, and psychological factors, along with marketing efforts and situational contexts. 6. How can a brand establish a connection with the customer? Understand Customer Needs: Use research to align products with preferences. Engage through Stories: Create relatable and emotional narratives. Provide Consistent Value: Deliver quality products and exceptional service. Interact on Multiple Channels: Use social media, email, and in-person events to stay accessible. Foster Trust and Transparency: Build credibility through honesty and authenticity. 7. What is a target market? A target market is a specific group of consumers that a company aims to reach with its products or services. This group shares similar characteristics, such as demographics, behavior, or needs. 8. Why is it important for marketers to understand the external environment? What are the six general categories of the environment that marketers must evaluate? Understanding the external environment helps marketers anticipate challenges, adapt strategies, and seize opportunities. Six Categories: 1. Economic Environment: Trends in income, inflation, and employment. 2. Technological Environment: Innovations and advancements. 3. Social-Cultural Environment: Consumer values, lifestyles, and demographics. 4. Political-Legal Environment: Laws, regulations, and government policies. 5. Natural Environment: Resource availability and environmental concerns. 6. Competitive Environment: Market competition and industry dynamics. 9. What is market segmentation? What are the basic dimensions of consumer market segmentation? Market segmentation is the process of dividing a market into distinct groups of consumers with common needs or characteristics. Dimensions: 1. Demographic: Age, gender, income, education, etc. 2. Geographic: Location-based preferences. 3. Psychographic: Lifestyle, values, and personality. 4. Behavioral: Usage, benefits sought, and loyalty. 10. What is market research, and what are the steps in the market research process? Market research is the systematic process of gathering, analyzing, and interpreting information about a market. Steps: 1. Define the Problem: Identify research objectives. 2. Develop a Research Plan: Select methods and tools. 3. Collect Data: Use primary (surveys, interviews) or secondary (existing reports) data. 4. Analyze Data: Interpret findings to derive insights. 5. Report Findings: Share actionable conclusions and recommendations. Chapter 13 ChatGPT said: ChatGPT 1. What is the difference between a good and a service? Good: A tangible product that can be touched, stored, and owned (e.g., a car, a phone). Service: An intangible activity or benefit provided to a customer, often requiring interaction and consumed at the point of delivery (e.g., consulting, haircuts). 2. What is a product? A product is anything that can be offered to a market to satisfy a need or want. It includes physical goods, services, ideas, or combinations of these. 3. What are the three classifications of consumer products? Briefly explain each. 1. Convenience Products: Frequently purchased, low-cost items requiring minimal effort (e.g., snacks, toiletries). 2. Shopping Products: More expensive items that consumers compare based on quality, price, and style (e.g., clothing, electronics). 3. Specialty Products: Unique or high-end items that consumers actively seek out and are willing to invest significant effort and money into purchasing (e.g., luxury cars, designer handbags). 4. How are business products classified? 1. Installations: Major capital items like buildings or machinery. 2. Accessory Equipment: Less expensive tools and equipment used in operations (e.g., computers). 3. Raw Materials: Basic materials used to create finished products (e.g., timber, minerals). 4. Component Parts: Finished items incorporated into other products (e.g., tires for cars). 5. Supplies: Consumable items that facilitate business operations (e.g., paper, cleaning products). 6. Business Services: Intangible services supporting business processes (e.g., consulting, maintenance). 5. What are the benefits of innovation? Competitive Advantage: Differentiates a company from competitors. Customer Satisfaction: Meets evolving needs and preferences. Efficiency: Improves production and operational processes. Market Expansion: Opens new opportunities and customer segments. Sustainability: Enables eco-friendly and resource-efficient solutions. 6. What are the four phases of product development? List the activities that occur at each phase. 1. Idea Generation: Brainstorming concepts, customer feedback, and research. 2. Idea Screening: Evaluating feasibility and market potential. 3. Development and Testing: Creating prototypes, testing functionality, and refining designs. 4. Commercialization: Launching the product, marketing, and distribution. 7. Discuss the key characteristics of each stage of the product life cycle. 1. Introduction: High marketing costs, low sales, building awareness. 2. Growth: Sales increase, profits rise, competition enters. 3. Maturity: Sales peak, market saturation, price competition. 4. Decline: Sales decline, reduced profitability, potential product discontinuation. 8. List the factors that influence changes to the product mix. Market Trends: Shifts in consumer preferences. Competitor Actions: New or improved products from rivals. Technology: Advancements enabling product enhancements. Company Goals: Strategic decisions to focus on core or innovative products. Regulations: Compliance with laws and standards. 9. What are the three main benefits to grouping and managing products by product line? 1. Streamlined Marketing: Unified branding and promotion for similar products. 2. Operational Efficiency: Shared resources for production and distribution. 3. Customer Retention: Offering complementary products encourages repeat purchases. 10. List the primary functions of product packaging. Protection: Safeguards the product during storage and transport. Promotion: Attracts customer attention and communicates brand identity. Convenience: Enhances usability and handling for consumers. Information: Displays product details, instructions, and regulatory information. Sustainability: Offers eco-friendly disposal options. 11. What are the primary considerations when determining product pricing? Explain each. 1. Cost: Ensuring the price covers production and operational expenses. 2. Demand: Understanding how pricing impacts customer purchasing behavior. 3. Competition: Benchmarking against competitors’ pricing strategies. 4. Perceived Value: Aligning price with customer perception of the product’s worth. 5. Market Conditions: Adapting to economic factors like inflation or recession. 12. List the five common pricing objectives used by marketers. 1. Profit Maximization: Achieving the highest possible profit margin. 2. Market Penetration: Setting low prices to gain market share quickly. 3. Sales Growth: Prioritizing increased sales volume. 4. Customer Retention: Using pricing strategies to build loyalty. 5. Competitive Pricing: Matching or undercutting competitors. 13. What are the various pricing strategies available to a business? Cost-Plus Pricing: Adding a markup to the product’s cost. Penetration Pricing: Setting a low initial price to attract customers. Skimming Pricing: Charging a high price initially, then lowering it over time. Competitive Pricing: Aligning with competitors’ prices. Value-Based Pricing: Pricing based on perceived customer value. Bundle Pricing: Offering multiple products at a discounted rate. Dynamic Pricing: Adjusting prices based on demand and market conditions. Promotional Pricing: Temporarily reducing prices to boost sales. Chapter 14 1. What is the goal of promotion? The goal of promotion is to communicate effectively with the target audience to build awareness, generate interest, stimulate demand, and encourage customer loyalty for a product or service. 2. What is the promotion mix, and what tools are available in this mix? The promotion mix is the combination of tools used to communicate with and persuade customers. Tools in the mix: Advertising: Paid, non-personal communication (e.g., TV, digital ads). Personal Selling: Direct interaction with customers (e.g., sales pitches). Sales Promotion: Short-term incentives to encourage sales (e.g., discounts). Public Relations (PR): Managing public perception (e.g., press releases). Direct Marketing: Targeted communication with consumers (e.g., email campaigns). 3. List the factors that affect the promotion mix. Target Audience: Demographics, preferences, and location. Budget: Financial resources available for promotional activities. Nature of the Product: Consumer vs. business products, or tangible vs. intangible. Stage in Product Life Cycle: Introduction, growth, maturity, or decline. Competition: Strategies used by competitors. Marketing Objectives: Goals such as awareness, sales, or loyalty. 4. Explain integrated marketing communications (IMC). IMC is a strategic approach to ensure that all forms of communication and messaging are unified and consistent across all channels. This maximizes the impact of promotional efforts by delivering a cohesive brand message. 5. What are the major categories of advertising media? What are the advantages and disadvantages of each? 1. Television: ○ Advantages: Broad reach, visual impact. ○ Disadvantages: High cost, limited targeting. 2. Print (Newspapers/Magazines): ○ Advantages: Targeted audience, credible. ○ Disadvantages: Declining readership, limited engagement. 3. Digital/Online: ○ Advantages: Highly targeted, measurable. ○ Disadvantages: Ad-blocking, competition for attention. 4. Radio: ○ Advantages: Affordable, local targeting. ○ Disadvantages: Non-visual, short lifespan. 5. Outdoor (Billboards, Posters): ○ Advantages: High visibility, cost-effective. ○ Disadvantages: Limited message space, static. 6. Describe the personal-selling process. 1. Prospecting: Identifying potential customers. 2. Pre-approach: Researching customer needs and preferences. 3. Approach: Making initial contact. 4. Presentation: Explaining the product’s benefits. 5. Handling Objections: Addressing customer concerns. 6. Closing the Sale: Securing the purchase. 7. Follow-Up: Ensuring customer satisfaction and fostering loyalty. 7. Define sales promotion. Provide examples of various sales promotion methods. Sales promotion involves short-term incentives to boost sales or encourage trial. Examples: Discounts and coupons. Buy-one-get-one-free (BOGO) offers. Free samples. Loyalty programs. Contests and sweepstakes. 8. What is the difference between a press release and a press conference? Press Release: A written announcement shared with the media to provide information. Press Conference: An event where media representatives are invited to receive updates and ask questions directly. 9. What are the disadvantages of using public relations as a promotional tool? Limited Control: Media can interpret and present information differently. Unpredictable Results: No guarantee of coverage or the desired message reaching the audience. Time-Consuming: Requires effort to build and maintain media relationships. 10. What are the four commonly used channels for delivering products from producer to customer? 1. Direct Channel: Producer → Customer. 2. Retail Channel: Producer → Retailer → Customer. 3. Wholesaler Channel: Producer → Wholesaler → Retailer → Customer. 4. Agent/Broker Channel: Producer → Agent/Broker → Wholesaler/Retailer → Customer. 11. Define “marketing intermediaries.” What are the benefits of marketing intermediaries? Marketing Intermediaries: Businesses that help distribute products to consumers (e.g., wholesalers, retailers). Benefits: Expand market reach. Reduce transaction costs. Provide expertise in marketing and logistics. 12. What are the four features that differentiate retailers? 1. Ownership Structure: Independent, chain, franchise, or online-only. 2. Level of Service: Self-service, limited service, or full service. 3. Product Assortment: Variety and depth of products offered. 4. Pricing Strategy: High-end, discount, or competitive pricing. 13. Define direct marketing. What are the various forms of direct marketing available to a business? Direct Marketing: A strategy to communicate directly with customers to generate responses. Forms: Email marketing. Telemarketing. Direct mail. Catalogs. Online targeted ads. SMS marketing. 14. What are the primary functions of physical distribution? Transportation: Moving products to desired locations. Warehousing: Storing goods efficiently. Inventory Management: Ensuring the right stock levels. Order Fulfillment: Processing and delivering customer orders. Materials Handling: Efficient movement of goods within facilities. Chapter 15 1. What is production? What are the three steps involved in this process? Production is the process of creating goods or services by transforming inputs (materials, labor, and capital) into finished outputs. Steps involved: 1. Input Acquisition: Gathering raw materials, labor, and other resources. 2. Transformation Process: Converting inputs into finished goods or services. 3. Output Delivery: Delivering the final product to customers or other stakeholders. 2. What are two activities crucial to the production of both goods and services? 1. Planning: Determining production goals, resources, and schedules. 2. Quality Control: Ensuring the final output meets standards and customer expectations. 3. What are the key differences between the production of goods and services? Goods Services Tangible, can be stored. Intangible, consumed as delivered. Standardized production is common. Customization is often required. Involves manufacturing processes. Relies on human interaction and expertise. Quality can be measured objectively. Quality often depends on customer perception. 4. What is research and development (R&D)? Why is it important? R&D involves activities aimed at developing new products or improving existing ones through innovation and experimentation. Importance: Fosters innovation and competitiveness. Drives efficiency and cost reduction. Enables adaptation to changing market needs. Leads to long-term business growth. 5. What are the major decisions involved in design planning? Explain each. 1. Product Line Design: Determining which products to offer. 2. Production Capacity: Estimating the volume of production to meet demand. 3. Technology Use: Deciding on equipment, tools, and software for production. 4. Resource Allocation: Allocating materials, labor, and capital efficiently. 6. What is the trade-off involved in making decisions about the use of automation in production? Advantages: Increased efficiency, consistent quality, reduced labor costs. Disadvantages: High initial investment, potential job loss, less flexibility in production for custom orders. 7. What are the four variables to consider when selecting a facility layout? What are the three types of layouts available and when should each be used? Variables to Consider: 1. Production Type: Volume and variety of products. 2. Workflow Efficiency: Minimizing movement and bottlenecks. 3. Space Utilization: Making optimal use of available space. 4. Cost: Balancing initial setup and operational expenses. Types of Layouts: 1. Process Layout: Group similar tasks; ideal for custom or small-batch production. 2. Product Layout: Arrange tasks in sequence; best for mass production. 3. Fixed-Position Layout: Keep the product stationary; used for large or complex projects (e.g., shipbuilding). 8. What is supply chain management? What are the key goals of supply chain management? Supply Chain Management (SCM): The coordination of activities involved in producing, storing, and delivering goods or services. Goals: Enhance efficiency and reduce costs. Ensure timely delivery of products. Build strong supplier and distributor relationships. Maintain inventory levels that match demand. 9. Why is scheduling an important part of operational planning? What are some tools available to assist with scheduling? Importance: Ensures timely production and delivery. Optimizes resource utilization. Minimizes downtime and delays. Tools: Gantt Charts: Visual timelines for project tasks. PERT (Program Evaluation Review Technique): Analyzes task sequences and durations. ERP Systems: Software to integrate scheduling with other operations. 10. What is quality control? Discuss programs available to assist businesses with improvements in quality. Quality Control: The process of ensuring that products or services meet specific standards. Programs: Total Quality Management (TQM): Focuses on continuous improvement across all departments. Six Sigma: Reduces defects by improving processes. ISO Standards: Provide guidelines to meet international quality benchmarks. Kaizen: Emphasizes incremental improvements in processes. Chapter 16 1. What are the three pillars of sustainability? 1. Environmental Sustainability: Protecting natural resources and minimizing environmental impact. 2. Social Sustainability: Ensuring fair labor practices, equity, and community well-being. 3. Economic Sustainability: Promoting long-term profitability and efficient use of resources. 2. Differentiate between a linear model of production and a circular economy model. Linear Model: Follows a "take-make-dispose" approach, where resources are used to produce goods that are discarded after use. Circular Economy Model: Focuses on resource efficiency, reuse, recycling, and minimizing waste by creating closed-loop systems. 3. What are the main principles and business benefits of a circular economy model? Principles: Design for longevity and recyclability. Eliminate waste through reuse and recycling. Optimize resource usage by extending product lifespans. Benefits: Cost savings through resource efficiency. Enhanced brand reputation. Compliance with environmental regulations. Increased resilience to resource scarcity. 4. What is the difference between cradle-to-grave and cradle-to-cradle? Cradle-to-Grave: Focuses on the entire lifecycle of a product, ending with its disposal in landfills or incineration. Cradle-to-Cradle: Promotes continuous reuse of resources by designing products for recycling and regenerating materials. 5. What are the two types of systems observed in cradle-to-cradle? Explain each. 1. Biological Cycle: Materials return to the environment safely as nutrients (e.g., compostable products). 2. Technical Cycle: Materials are reused or recycled indefinitely without degradation (e.g., metals, plastics). 6. What is a life cycle assessment (LCA)? Discuss the stages of an LCA. LCA: A method to evaluate the environmental impact of a product or service throughout its lifecycle. Stages: 1. Goal Definition and Scoping: Define the purpose and scope of the analysis. 2. Inventory Analysis: Gather data on inputs (materials, energy) and outputs (emissions, waste). 3. Impact Assessment: Evaluate environmental effects such as carbon emissions or resource depletion. 4. Interpretation: Analyze results to make informed decisions. 7. What does sustainability in the supply chain mean? What are the benefits and challenges of sustainable supply chain management? Sustainability in the Supply Chain: Integrating environmental, social, and economic considerations into supply chain operations. Benefits: Reduced environmental impact. Improved brand reputation. Cost savings through resource efficiency. Challenges: High initial implementation costs. Complexity in managing supplier compliance. Limited availability of sustainable materials. 8. What is product stewardship, and how can a business benefit from integrating product stewardship principles throughout the supply chain? Product Stewardship: Businesses take responsibility for the environmental and social impacts of their products throughout their lifecycle. Benefits: Enhanced customer loyalty. Reduced liability risks. Compliance with regulations. Opportunities for innovation in sustainable design. 9. What is extended producer responsibility (EPR)? Differentiate between product stewardship and EPR. EPR: A policy approach where producers are responsible for the end-of-life management of their products, including recycling or disposal. Differences: Product Stewardship: Broader voluntary commitment, encompassing the entire lifecycle. EPR: Mandatory compliance with regulations focused on post-consumer waste. 10. What is green marketing? Provide examples of communication tactics used by businesses for green marketing of products and services. Green Marketing: Promoting products or services based on their environmental benefits. Examples: Eco-labeling (e.g., "Certified Organic"). Highlighting sustainable sourcing (e.g., "100% recycled materials"). Sharing carbon-neutral goals in advertisements. Engaging in cause marketing for environmental issues. 11. What is greenwashing? Greenwashing: When a company falsely markets products or practices as environmentally friendly to attract eco-conscious consumers, without substantial proof or action. Examples: Misleading labels, vague claims like "natural," or using green imagery to imply sustainability. Chapter 17 1. Why do you need to understand accounting as a decision-maker inside or outside an organization? Accounting provides critical financial information that helps in making informed decisions: Internal Decision-Makers: Use accounting to evaluate company performance, allocate resources, and plan for growth. External Decision-Makers: Rely on accounting to assess the financial health of an organization for investments, loans, or partnerships. 2. What are the two broad categories of accounting? Explain each. 1. Financial Accounting: ○ Focuses on preparing financial statements for external stakeholders like investors, creditors, and regulators. ○ Ensures compliance with standards like IFRS or GAAP. 2. Managerial Accounting: ○ Provides detailed financial data for internal use, aiding in budgeting, forecasting, and operational decision-making. 3. What is the purpose of the International Financial Reporting Standards (IFRS)? The IFRS establishes a global framework for preparing financial statements, ensuring consistency, transparency, and comparability across international borders for investors and stakeholders. 4. What are the three financial statements that provide the basis for financial analysis? What information do these reports provide? 1. Statement of Financial Position (Balance Sheet): Details assets, liabilities, and equity at a specific point in time. 2. Statement of Comprehensive Income (Income Statement): Shows revenues, expenses, and net income or loss over a period. 3. Statement of Cash Flows: Summarizes cash inflows and outflows from operating, investing, and financing activities. 5. What is included on the statement of financial position? How are these items related? Included: Assets: Resources owned by the company (e.g., cash, inventory). Liabilities: Obligations owed to others (e.g., loans, accounts payable). Equity: Owners' residual interest after liabilities are deducted from assets. Relationship: Assets = Liabilities + Equity 6. What does liquidity represent? Liquidity measures a company's ability to meet its short-term financial obligations using its available assets. High liquidity indicates the ease of converting assets into cash. 7. What is the difference between current liabilities and long-term liabilities? Current Liabilities: Debts or obligations due within one year (e.g., accounts payable, short-term loans). Long-Term Liabilities: Debts or obligations that are due beyond one year (e.g., bonds payable, long-term loans). 8. How do you calculate a company’s net income (or loss) using the items on the statement of comprehensive income? Formula: Net Income (or Loss)=Total Revenue−Total Expenses\text{Net Income (or Loss)} = \text{Total Revenue} - \text{Total Expenses}Net Income (or Loss)=Total Revenue−Total Expenses If expenses exceed revenues, it results in a net loss. 9. What is the purpose of the statement of cash flows? The statement of cash flows provides insight into a company’s cash inflows and outflows, helping stakeholders understand: How cash is generated and used in operations. Investments made or sold. Financing activities like debt or equity issuance. 10. What is a financial ratio? Provide three examples and explain each. A financial ratio compares financial data to evaluate a company’s performance and financial health. 1. Current Ratio: Current Ratio=Current AssetsCurrent Liabilities\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}Current Ratio=Current LiabilitiesCurrent Assets Measures liquidity and the ability to cover short-term liabilities. 2. Debt-to-Equity Ratio: Debt-to-Equity Ratio=Total LiabilitiesEquity\text{Debt-to-Equity Ratio} = \frac{\text{Total Liabilities}}{\text{Equity}}Debt-to-Equity Ratio=EquityTotal Liabilities Indicates financial leverage and risk by comparing debt to equity. 3. Return on Equity (ROE): ROE=Net IncomeEquity\text{ROE} = \frac{\text{Net Income}}{\text{Equity}}ROE=EquityNet Income Shows profitability and how effectively equity is used to generate income. Chapter 18 1. What is money? What three functions can a form of money serve? Money is any medium that facilitates the exchange of goods and services, serving as a store of value, unit of account, and medium of exchange. Three functions: 1. Medium of Exchange: Used to buy and sell goods and services, replacing barter. 2. Store of Value: Retains value over time, allowing individuals to save and spend later. 3. Unit of Account: Provides a standard measure for valuing goods and services. 2. What are the three main components of Canada’s money supply? Explain each. 1. Currency: Physical money, such as coins and banknotes in circulation. 2. Demand Deposits: Bank account balances accessible on demand via checks or debit cards. 3. Notice Deposits: Savings accounts requiring prior notice for withdrawal, contributing to money supply liquidity. 3. Differentiate between M1+ (gross) and M1++ (gross). M1+ (Gross): Includes currency in circulation and demand deposits. M1++ (Gross): Expands on M1+ by including notice deposits and other easily accessible savings. 4. What are the benefits of a growth in money supply? Encourages economic growth by increasing purchasing power. Supports business investments and job creation. Reduces interest rates, making borrowing more affordable. 5. What is a potential result of a fast growth in money supply? Excessive money supply growth can lead to inflation, where the value of money decreases, causing prices to rise and reducing purchasing power. 6. What is the role of the Bank of Canada? The Bank of Canada acts as the country’s central bank, with roles including: Managing monetary policy to maintain price stability. Issuing Canada’s currency. Regulating and overseeing financial systems. Acting as a lender of last resort during financial crises. 7. Define open market operations. Open market operations involve the Bank of Canada buying or selling government securities in the financial market to influence the money supply and interest rates. 8. Differentiate between the bank rate and the target for the overnight rate. Bank Rate: The interest rate charged by the Bank of Canada for loans to financial institutions. Target for the Overnight Rate: The desired interest rate range for borrowing and lending among financial institutions overnight, set by the Bank of Canada to influence monetary policy. 9. What are the two broad groups that financial institutions are categorized into? Explain each. 1. Depository Institutions: Include banks, credit unions, and trust companies that accept deposits and provide loans. 2. Non-Depository Institutions: Include insurance companies, investment firms, and pension funds that provide financial services without accepting deposits. 10. What is the most important regulatory body in Canada’s banking system? What are its primary responsibilities? The Office of the Superintendent of Financial Institutions (OSFI): Responsibilities: Supervising and regulating banks and insurance companies. Ensuring financial system stability. Protecting depositors, policyholders, and pension plan members. 11. How has the financial services industry evolved over time? Increased Digitization: Adoption of online banking, mobile payments, and fintech innovations. Diversification: Banks now offer investment, insurance, and wealth management services. Globalization: Integration with global financial markets and increased cross-border services. Regulatory Changes: Stricter regulations following financial crises to enhance system stability. Chapter 19 1. What is financial management? Financial management involves planning, organizing, directing, and controlling a company’s financial activities to achieve its objectives, including profitability, liquidity, and sustainability. 2. List the responsibilities of the financial manager. Analyzing financial data to guide decision-making. Developing budgets and financial forecasts. Managing cash flow to ensure liquidity. Securing financing for business operations and growth. Evaluating investment opportunities to maximize returns. Mitigating financial risks through effective strategies. 3. What is the purpose of a financial plan? A financial plan provides a roadmap for achieving an organization’s financial goals by: Estimating future revenue and expenses. Allocating resources efficiently. Identifying funding needs and sources. Monitoring progress to ensure financial health. 4. What are the three different types of budgets? Describe each. 1. Operating Budget: ○ Covers daily expenses such as salaries, utilities, and materials. ○ Focuses on short-term operational goals. 2. Capital Budget: ○ Plans for long-term investments in assets like equipment, buildings, or technology. ○ Helps assess project feasibility and funding needs. 3. Cash Flow Budget: ○ Tracks expected cash inflows and outflows over a specific period. ○ Ensures liquidity and helps avoid cash shortages. 5. What are five key factors that affect the choice of financing? 1. Cost: Interest rates, issuance costs, and repayment terms. 2. Risk: Impact on cash flow and financial stability. 3. Duration: Short-term vs. long-term funding needs. 4. Ownership: Equity financing dilutes ownership, while debt does not. 5. Market Conditions: Economic trends and investor sentiment. 6. Differentiate between debt financing and equity financing. Debt Financing: Borrowing funds that must be repaid with interest (e.g., loans, bonds). Equity Financing: Raising capital by selling ownership stakes in the business (e.g., shares). 7. Which is more costly to a company, equity or debt? Explain why. Equity financing is more costly because: It requires sharing ownership and future profits. Investors expect higher returns due to higher risk compared to lenders. Dividends paid to shareholders are not tax-deductible, unlike interest on debt. 8. To determine the valuation of a company, what are some primary factors investors consider? Revenue and Profitability: Current and projected earnings. Growth Potential: Market opportunities and scalability. Industry Position: Competitive advantages and market share. Asset Base: Tangible and intangible assets, such as patents. Risk Profile: Debt levels, economic conditions, and management stability. 9. Why is short-term debt financing easier to obtain than long-term debt financing? Lower risk for lenders due to a shorter repayment period. Easier credit approval process with fewer conditions. Requires less detailed financial projections. 10. What are three primary sources of long-term financing? Explain each. 1. Equity Financing: ○ Selling shares to investors in exchange for ownership. ○ Provides funds without repayment obligations but dilutes ownership. 2. Debt Financing: ○ Issuing bonds or securing long-term loans. ○ Fixed repayment schedule with interest, retaining ownership. 3. Retained Earnings: ○ Reinvesting profits back into the business for growth. ○ Does not involve borrowing or ownership dilution. Chapter 20 1. What are the four steps for creating a financial plan? 1. Assess Current Financial Situation: Evaluate income, expenses, assets, and liabilities. 2. Set Financial Goals: Define short-term, medium-term, and long-term objectives. 3. Develop a Plan: Create strategies for saving, investing, and budgeting to achieve goals. 4. Implement and Monitor: Execute the plan and regularly review progress to make adjustments. 2. What three time frames should goal setting address? 1. Short-Term Goals: Achievable within a year (e.g., saving for a vacation). 2. Medium-Term Goals: Accomplished within 1-5 years (e.g., buying a car). 3. Long-Term Goals: Longer than 5 years (e.g., retirement savings). 3. Discuss the five steps involved in taking control of your finances. 1. Create a Budget: Track income and expenses to identify spending patterns. 2. Set Financial Priorities: Allocate resources toward essential needs and goals. 3. Build an Emergency Fund: Save for unexpected expenses to avoid debt. 4. Reduce Debt: Pay down high-interest debts systematically. 5. Plan for the Future: Invest for long-term goals like retirement or education. 4. List four common factors that impact decisions about investments. 1. Risk Tolerance: Comfort with potential losses. 2. Time Horizon: Length of time until funds are needed. 3. Liquidity Needs: Access to cash without significant penalties. 4. Financial Goals: Desired outcomes, such as income, growth, or preservation. 5. What type of investments are suitable for a short investment horizon? High-Liquidity, Low-Risk Options: Savings accounts, money market funds, or short-term bonds. 6. What is the purpose of asset allocation? What are some of the different types of investments available? Purpose: Diversifies investments to balance risk and return based on financial goals and risk tolerance. Types of Investments: Stocks, bonds, mutual funds, ETFs, real estate, and alternative assets (e.g., commodities). 7. Provide examples of investments for capital preservation, income, and growth. Capital Preservation: Savings accounts, certificates of deposit, and government bonds. Income: Dividend-paying stocks, corporate bonds, and real estate. Growth: Stocks, equity mutual funds, and growth-oriented ETFs. 8. Discuss two ways to instantly diversify a portfolio. 1. Invest in Mutual Funds or ETFs: Provide exposure to multiple assets or sectors. 2. Use Asset Allocation Strategies: Divide investments among different asset classes (e.g., stocks, bonds, real estate). 9. How is the rate of return on an investment calculated? Formula: Rate of Return=(Ending Value - Initial Value) + IncomeInitial Value×100\text{Rate of Return} = \frac{\text{(Ending Value - Initial Value) + Income}}{\text{Initial Value}} \times 100Rate of Return=Initial Value(Ending Value - Initial Value) + Income×100 This measures the percentage change in investment value over a period. 10. What is an index? Which index is commonly used to determine how the Canadian stock market is performing? Index: A benchmark representing the performance of a specific market or segment. Common Canadian Index: S&P/TSX Composite Index: Tracks the performance of large companies listed on the Toronto Stock Exchange.

BUS 100 Review Questions (Ch.1-20) PDF

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