Midterm Intro to Business PDF

benefits of businesses to society o.ering valuable goods and services providing employment contributing to standard of living improving quality of life driving innovation and creativity mangers must balance pursuit of profits with social concerns respond to environme...

benefits of businesses to society o.ering valuable goods and services providing employment contributing to standard of living improving quality of life driving innovation and creativity mangers must balance pursuit of profits with social concerns respond to environmental scan with human resources, marketing, financial strategies that provide best chance of success business - an organization that seeks profit by o.ering products (goods and services) to satisfy society’s needs good - physical, tangible product that we can see and touch service - an intangible product that we experience or use standard of living - the amount of products available, the wealth of the nation, and lifestyle opportunities quality of life - the general well-being and happiness of people and societies; including measuring things like access to healthcare, education, and food environmental scan - the process of gathering information about the external environment to determine how it may potentially impact the business’s operations political economic and competitive social technological international economy - the way in which people deal with the creation and distribution of wealth economic system - a combination of policies, laws, and choices made by governments factors of production - the resources used to create goods and services, including natural resources, capital, labour, entrepreneurship, and knowledge market economy - economic system based on competition in marketplace in which individuals own and operate the majority of businesses that provide goods and services command economy - an economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production. socialism - economic system which infrastructure is owned and controlled by government, smaller businesses controlled by individuals. mixed economy - economic system where most land and business are privately owned but with various levels of government involvement. (CANADA) competition - rivalry among businesses for sales to potential customers perfect (or pure) competition - the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to a.ect the price of that product demand - the quantity of a product that buyers are willing to purchase at each of various prices equilibrium price - the price at which the quantity demanded is exactly equal to quantity supplied monopolistic competition - market situation where many buyers with large number of sellers that di.erentiate their products from products of competitors product di.erentiation - the process of developing and promoting di.erences between one’s products and all competitive products oligopoly - market (or industrty) in which there are few sellers game theory - used to model the interaction between two or more businesses to determine what will happen if one or more companies take specific actions with regard to changing prices or introducing new products or services monopoly - a market (or industry) with one seller and barriers to keep other companies from entering the industry recession - two or more consecutive three-month periods of decline in a country’s GDP GDP - total dollar value of all goods and services produced by all people within the boundaries of a country during a one-year period unemployment rate - percentage of a country’s labour force unemployed at any time; calculated as the number of unemployed divided by number of people currently in labour force consumer price index (CPI) - a monthly index that measures the changes in the prices of a fixed basket of goods and services purchased by a typical consumer in an urban area inflation - an ongoing increase in general level of prices deflation - an economics statistic that tracks the decrease in prices of goods and services over a period of time Chapter 3 benefits of exporting include increased jobs and income, without it, market is limited by number of customers within the business’s home country without importing, Canada would face shortages of key natural resources - provides access to resources we need, allows for access to lower priced goods, more choice for consumers, resources allocated to highest-value activities 1550.08 absolute advantage - the ability to produce a specific product more e.iciently than any other country comparative advantage - the ability to produce a specific product more e.iciently than any other product exporting - the selling and shaping of raw materials or products to other countries importing - the buying of raw materials or products from other countries foregin-exchange control - restriction on amount of a particular foreign currency that can be purchased or sold currency devaluation - a drop in value of one country’s currency relative to other currencies currency exchange rate - the value of one currency in relation to another balance of trade - the value of exports minus the value of imports for a country trade surplus - value of exports is greater than the value of imports trade deficit - value of exports is less than value of imports balance of payments - the total flow of money into a country minus the total flow of money out of that country over some period of time, usually every quarter or calendar year tari. - tax on a particular foreign product being imported into a country - customs/import duty quota - limit on amount of a particular good that may be imported into a country during a given period of time embargo - a complete halt to trading with a particular country or in a particular product World Trade Organization - powerful successor to the General Agreement on Tari.s and Trade that incorporates trade in goods, services, and ideas International Monetary Fund (IMF) - international bank that makes short-term loans to developing countries experiencing balance-of-payment deficits World Bank - the most familiar type of multilateral development bank; provides low-interest loans, interest-free credit, and grants to developing countries economic community - organization of countries formed to promote the free movement of resources and products among its members - aka regional economic integration letter of credit - document issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary bill of landing - document issued by a transport carrier to an exporter to prove that merchandise has been shipped draft - document issued by the exporter’s bank, ordering the importer’s bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer’s bank international direct investment - method for entering international business that provides complete control over operations. Options for international direct investment include acquisitions, joint ventures, and creation of totally owned facilities in foreign markets strategic alliance - partnership formed to cooperate in manufacturing, development, sales, or other business activities while each party maintains its independence joint venture - the creation of a separate company that will be run jointly by partnering companies acquisition - purchase of an existing company in foreign country Chapter 5 characteristics of entrepreneurs confidence energy internal drive vision tolerance for risk small business - one that is independently owned and operated for profit and not dominant in its field, have 1-99 employees, represent 98% of all companies with employees in Canada, employ 8.4 million individuals in Canada, contribute 42% to GDP, Three factors contributing to high number of small businesses in Canada culture of entrepreneurship advances in technology  downsizing and outsourcing Importance of small businesses provide technical innovation employment provide competition meeting needs of society and other businesses types of ventures B2C B2B C2B C2C Most common source of start-up funds in own personal resources from savings, credit cards, equity from home, and funds from retirement account advantages of franchising nationally advertised name and marketing support training and materials management advice products and production methods disadvantages of franchising pay franchise fee to get started pay certain profits to franchisor pay cost of building/remodelling franchise location franchise agreement dicates every aspect of business entrepreneurial spirit - measured by entrepreneurial awareness, entrepreneurial opportunity perception, and entrepreneurial self-e.iciency intrapreneurs - employs who bring an entrepreneurial spirit to their organization business plan - written document that describes the opportunity, goals, and plans for a business business model - explains how business will make money social entreprise - venture driven first by a higher social purpose but that still is profit- driven in order to be self-sustaining angel investors - private individuals who invest money typically in exchange for ownership in a company venture capital (VC) companies that invest money in high-growth companies that have the potential to become large and successful crowd funding - entrepreneurs invite people to contribute to a business or project, usually via an online platform franchise - a license to operate an individually owned business as if it were part of a chain of outlets or stores franchising - actual granting of a franchise franchisor - an individual or organization granting a franchise franchisee - a person or organization purchasing a franchise Chapter 6 three forms of business ownership sole proprietorships o most control, but transfer ownership di.icult o 100% profits to owner partnerships o shared control, multiple owners o profits shared equally or profits shared in a proportion that is specified in partnership agreements corporations o easy transfer of ownership, best to attract investment capital by selling shares in the company o profits shared according to each owner’s or shareholder’s percentage of ownership key considerations when choosing form of business business ownership and control taxation and treatment of profits legal and financial liability ease of a start-up and administration sole proprietorship - a business owned and operated by one person partnership - association or relationship between two or more individuals who join together to carry on a trade or a business general partner - person who shares responsibility for operating a business, and unlimited liability for the debts of the business limited partner - a person who invests money in a business but has no management responsibility or liability for losses beyond the amount they invest in the partnership corporation - artificial person created by law with most of the legal rights of a real person, including rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts public corporation - corporation whose shares are widely held and available to the general public private corporation - a corporation whose number of shareholders is limited; transfer of shares to third parties is normally restricted, and shares do not trade on a recognized stock exchange pass-through taxation - occurs when an owner’s share of business profits is reported on their individual tax return, as in unincorporated business (sole proprietorship or partnerships) corporate (dual) taxation - occurs when profits of a business are taxed at the entity level before profits are distributed to owners; distributions are then reported on the owners’ individual tax returns as dividends and are taxed a second time unlimited liability - a legal concept that holds a business owner personally responsible for all the debts of the business limited liability - a feature that limits each owner’s financial liability to the amount of money that they have invested in the business consumer co-op - a co-op that provides products or services to its member producer co-op - a co-op that markets goods or services produced by its member or reduces costs through group purchasing worker co-op - a co-op owned and operated by its employees to provide employment and limited liability multi-stakeholder co-op - a co-op that includes more than one membership group Chapter 7 key functions of management planning organizing leading and motivating controlling areas of management specialization finance operations marketing human resources four steps in managerial decision making 1. identifying problem/opportunity 2. generating alternatives 3. selecting alternative 4. implementing and evaluating the solution managers should keep 3 objectives in mind o correctly identify problem or opportunity o use creativity o use structured analysis to evaluate alternatives the critical success factors for any business, or the factors that indicate success are: achieving financial performance meeting/exceeding the needs of customers providing value fostering creativity and innovation securing employee commitment planning - establishing organizational goals and deciding how to accomplish them organizing - arranging resources and activities in a way that e.ectively and e.iciently accomplishes the goals leading and motivating - influencing people to work toward a common goal controlling - measuring results against goals and making corrections when needed management - coordinating people and other resources to achieve the goals of an organization vision statement - clear and concise outline of an organization’s values and goals that it would like to achieve mission statement - how company intends to achieve its vision - and how it is di.erent from its competition and the keys to its success strategic planning process - establishing an organization’s major goals and objectives and allocating resources to achieve them organizing - grouping resources and activities to accomplish some and result in an e.icient and e.ective manner leading - the process of guiding others toward the achievement of organizational goals motivating - the process of providing incentives for people to work in the best interests of an organization directing - the combined processes of leading and motivating controlling - measuring results against goals and making corrections when needed top manager - upper level execute who guides and controls an organization’s overall strategy and resources to accomplish its vision middle manager - manager who implements the strategy and major policies developed by top management front-line manager - manager who coordinates and supervises the activities of operating employees (those with no employees reporting to them) financial manager - responsible for an organization’s financial resources operations manager - manages the systems that convert resources into goods and services marketing manager - responsible for facilitating the exchange of products between an organization and its customers or clients human resources manager - charged with managing an organization’s human resources programs administrative manager - manager not associated with any specific functional area but provides overall administrative guidance and leadership conceptual skills - the ability to see “big picture” and understand how various parts of an organization or idea can fit together technical skills - specific skills needed to accomplish a specialized activity interpersonal skills - dealing e.ectively with others, inside and outside organizations leadership - relationship between leader and followers who want real changes, resulting in outcomes that reflect their shared purpose autocratic leadership (authoritarian) - where leader makes decisions and employees expected to execute decisions exactly as directed participative leadership (inclusive) - leader consults employees before making decisions laissez-faire leadership (free-rein) - leader provides basic vision and necessary resources for team, and mainly acts as an advisor decision making - act of analyzing situation and choosing course of action from available alternatives SWOT analysis - tool for identifying and evaluating a business’s strengths, weaknesses and opportunities, and threats; used during strategic planning process to set goals and objectives core competencies - approaches and processes that a company performs well that may give it an advantage over its competitors Chapter 8 4 objectives companies evaluate when building their organizations: 1. e.iciency 2. control 3. responsiveness 4. empowerment departmentalization by function, product, location, and customer spans of management wide span - good for organizations with high standard activities or highly skilled sta. o more e.icient, empowerment if employees granted authority o disadv. less management control and interaction with management narrow span - good for organizations where high level of interaction required between managers and employees o adv. more management control, more interaction between managers and subordinates, improving the ability to supervise the tasks and can increase productivity and responsiveness o disadv. higher cost and less empowerment line and sta. - provides line managers specialized managerial support but can sometimes create conflicts between the two types of managers matrix - lead to increased flexibility, collaboration, and innovation, but results in employees having two supervisors line - o.ers clear lines of communication and fast decision making but can cause managers to feel isolated and lack resources they need to achieve company goals organization design - process that results in organizational structure representing job design, departmentalization, centralization of authority, and span of management e.iciency - ability to complete a task using minimum amount of resources control - ability to make decisions and specify how those decisions will be carried out responsiveness - speed which organization can improve its products in response to customer feedback, employee suggestions, or competitive pressures empowerment - degree to which employees can make decisions on their own departmentalization - the process of grouping jobs into manageable units job design - structuring the tasls and activities required to accomplish a business’s objectives into specific jobs so as to foster productivity and employee satisfaction job specialization - separation of all organizational activities into distinct tasks and the assignment of di.erent tasks to di.erent people job rotation - systemic shifting of employees from one job to another task variety - the degree a job requires di.erent activities task identity - how each job contributes to final product/result task significance - importance of the task delegation - assigning tasks and some degree of authority to others decentralization organization - organization where management consciously attempts to spread authority widely in lower levels of organization centralized organization - organization that systemically works to concentrate authority at upper levels of organization span of management - number of workers who report directly to one manager - aka span of control organization height - number of layers/levels of management organization chart - visual representation of structured relationships among tasks, responsibilities, and people given the authority to do those tasks line structure - organizational structure in which chain of command goes directly from person to person throughout organization line and sta. structure - includes both line and sta. positions matrix structures - individuals from di.erent functional areas work on project teams cross-functional team - team of individuals with varying specialties, expertise, and skills that are brought together to achieve a common task corporate culture - inner customs, traditions, and values of an organization informal organization - pattern of behaviour and interaction that stems from personal rather than professional relationships grapevine - informal communication network within an organization Chapter 9 human resources consist of: 1. acquisition - recruiting and hiring new employees o planning - how many ppl need? o job analysis o recruiting o selection o orientation 2. maintenance - encouraging employees to remain with the organizaiton and work e.ectively o employee relations o compensation o benefits 3. development - improving employee skills and expanding their capabilities o training o development o performance equity refers to fairness diversity - recognizing, valuing, and embracing di.erences, respecting uniqueness of each person inclusion - demonstrating respect for employees as well as acknowledging and valuing their contributions, talents, skills, experiences, and perspectives increased diversity requires managers to successfully integrate employees with broader range of perspectives, values and working styles integrate cultural di.erences embrace EDI to compete successfully recruitment steps 1. attract candidate pool 2. screen candidates 3. interview candidates 4. compare candidates 5. check references 6. make job o.er methods for training and development on job trainnig simulations classroom teaching online training objectives for performance appraisals evaluate performance against standards make employee decisions assess HRM practices human resource management (HRM) - all the activities involved in acquiring, maintaining, and developing an organization’s human resources workplace diversity - di.erences among people in workforce in terms of social background, ethnicity, gender, religion, age, physical/learning abilities, and sexual orientation multiculturalism - fundamental belief that all citizens are equal regardless of their racial or ethnic backgrounds replacement chart - list of key job roles, current employees, existing and potential job vacancies skills inventory - computerized database containing information on the skills and experience of all current employees job analysis - determines job duties and requirements and importance to other jobs in organization job description - list of tasks and responsibilities of job job specification - list of qualifications required to perform job recruiting - process of attracting qualified job applicants selecting - identifying who has qualifications necessary to be successful in position and o.ering candidate position in company probationary period - period of time company takes to asses job performance of new employee and new employee assess fit with company compensation - monetary and non-monetary payments employees receive in return for thier labour benefits - forms of indirect compensation including pensions, health insurance, and vacation orientation - acquainting new employees with organization training - process of teaching new employees how to do their jobs, or teaching existing employees how to do their jobs more e.ectively and e.iciently development - process of preparing employees to assume increased responsibility in both present and future positions performance appraisal - evaluation of employee’s current and potential levels of performance Chapter 10 Maslow’s Hierarchy of Needs 1. self-actualization - need to grow and develop, most di.icult to satisfy 2. esteem needs - respect and recognition from others 3. social needs - love, a.ection, sense of belonging 4. safety needs - physical and emotional security 5. physiological needs - most basic, food, water, clothing, shelter, sleep ERG Theory existence - basic material existence relatedness - interpersonal relations and includes needs such as friendship, family, and esteem-related needs growth - need for personal development maslow - one need pursued at a time, aldefer, di.erent levels pursued simultaneously Theories X, Y, and Z - represent opposing sets of assumptions that underlie management’s attitudes and beliefs regarding worker’s behaviour Four methods of reinforcement 1. positive reinforcement 2. negative reinforcement 3. punishment 4. extinction Expectancy theory is tool for managers that helps understand why employee may or may not be motivated by particular outcome get to know employees create achievable outcomes actively assist in employees in achieving outcomes motivation - driving force that influences how we behave and is driven by our need to achieve our goals scientific management - application of scientfic principles to management of work and workers piece-rate system - compensation system under which employees are paid by a certain amount for each unit of output they produce hawthorne studies - pay is only one motivator, but there are many others. employees who are happy and satisfied with their work are motivated to perform better, which can also increase productivity. Maslow’s Hierarchy of Needs - a motivation theory that sequences human needs in the order of their importance, from physiological needs to self-actualization needs existence - basic material existence relatedness - interpersonal relations and includes needs such as friendship, family, and esteem-related needs growth - need for personal development Theory X: assumes employees dislike work and will function only in a highly controlled work environment Theory Y: concept of employee motivation - assumes responsibility and work toward organizational goals, and by doing so, personal rewards are also achieved Theory Z: emphasizes teamwork and individual accountability to team and organization Herzberg’s Two-factor theory (Motivation-Hygeine theory) - suggest satisfaction and dissatisfaction are separate and distinct dimensions Maintenance factors - according to two-factor theory, job factors such as job security, pay, working conditions that reduce dissatisfaction when present to an acceptable degree, but do not necessarily result in high levels of satisfaction and motivation motivation factors - according to two factor job theory, job factors such as recognition, responsibility, and opportunities for advancement that increase satisfaction and motivation, although their absence does not result in dissatisfaction reinforcement - means of modifying behaviour based on premise that rewarded behaviour is likely to be repeated, while punished behaviour less likely to occur behaviour modification - systemic program of reinforcement to encourage desirable behaviour, or is achieved through the systemic use of punishment and rewards equity theory - motivation theory based on premise that people are motivated to obtain and preserve equitable treatment for themselves expectancy theory - motivation theory based on assumption that motivation depends on how much we want something and how likely we are to get it goal-setting theory - employees motivated to achieve goals that they and their managers establish together management by objectives (MBO) - motivation technique in which managers and employees collaborate in setting goals to improve the performance of the organization flextime - system in which employees set their own work hours within employer- determined limits job sharing - arrangement whereby two people people share one full-time position hybrid working - blend of working from home, on the go, or at the o.ice telecommuting - working at home all the time or for a portion of work week job enrichment - providing variety, responsibility or control over their jobs job enlargement - form of job enrichment where employee is given additional but similar tasks to complete job redesign - form of job enrichment employees assigned entirely new tasks that fit their skill sets and the organization’s needs job rotation - form of job enrichment where employee is moved between various jobs for specific periods of time employee ownership - situation in which employees own company they work for by virtue of being shareholders virtual teams- type of team where members are geographically dispersed but communicate electronically Chapter 11 workers choose to form or join union, pursue one or more of following objectives: 1. fair compensation 2. improved work rules and working conditions 3. increased job security 4. defined grievance procedures 5. power through solidarity labour union - organization that represents workers in dealing with management over issues involving wages, hours, and working conditions strikes - temporary work stoppages by employees, calculated to add force to their demands Canada Industrial Relations Board (CIRB) - federal agency that interprets and administers provisions of labour law to support constructive labour-management relations labour contract - written agreement between labour and management that is in force for set of period of time grievance procedures - formally established course of action for resoling employee complaints against management collective agreement - written contract between employer and union outlining working conditions, wages, benefits of employees and management’s rights collective bargaining - process of negotiating labour agreements that provide for compensation and working arrangements mutually acceptable to the union and to management negotiations - process of two or more parties resolving issues distributive bargaining - negotiation strategy that generally involves tension and conflict because the goal is to achieve your items at the loss of another party’s items; a win-lose scenario integrative bargaining - building long-term relationships and using problem-solving techniques and collaboration to develop mutually beneficial agreements; a win-win scenario ratification - approval of a labour contract by a vote of the union picketing - marching back and forth in front of a place of employment with signs slowdowns - workers report to their jobs but work at slower pace than normal boycotts - refusals to do business with a particular company lockout - business’s refusal to allow union employees to enter the workplace replacement workers - non-union workers hired by management to replace striking union workers injuction - court order required a person or group either to perform some act or refrain from performing some act conciliation - process of discovering goals of each party and encouraging settlement mediation - process of settling issues in which the parties present their case to a neutral mediator arbitration - use of neutral third party who conducts a formal hearing on an unresolved dispute and then decides on a solution