Intro to Business Review – Flashcards
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****** Chapter 1 ****** When referring to risk, which of the following statements is reasonable?
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Sizeable risks can lead to substantial profits, if the business takes calculated risks and captures good opportunities. The strategy is to make the most profit with the least amount of risk. Entrepreneurs and small business start-ups are advised to take calculated risk. Those that take the most risk may make the most profit.
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Profits equal _______.
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the funds available for business growth, after expenses and salaries are paid Profits are what the firm earns above and beyond what it pays out for expenses and salaries.
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Which of the following circumstances is most likely to reduce one's standard of living?
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An increase in the cost of some goods such as escalating gasoline prices. By definition, the standard of living is the amount of goods and services that people buy, with the funds they have available. As such, if you increase the price of a good in high demand such as gasoline, the added expense will cut into the funds available to buy other things or the funds one can put in savings.
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When developing and maintaining good stakeholder relationships, companies find that_______.
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most often, they must balance the needs of the stakeholders with the need to make profits Stakeholders are people and organizations who stand to gain or lose by the actions of the business. Examples of stakeholders include customers, employees, government organizations, suppliers, and even community citizens. Firms must balance the need to make profits with the needs of stakeholders.
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As a __________________, Judy started a non-profit business called Music and Memories™. She recognized that music, socialization, and memory-challenging activities for senior citizens helped maintain their cognitive skills for longer periods of time.
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social entrepreneur Social entrepreneurs are persons who develop business ideas that respond to the social needs of society.
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Darnell lives in an area where labor is plentiful and locations for start-ups are relatively cheap. He is also confident that he can find start-up funds for a graphic arts business. As he evaluates the opportunity for his proposed venture, which of the following factors of production should he focus on?
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Entrepreneurship and knowledge The late Peter Drucker, renowned professor of management, emphasized that the most important factor of production in contemporary society is knowledge. In terms of factors of production, businesses have succeeded in finding capital, land, and labor. Governments have promoted entrepreneurship. In this situation, Darnell has learned that labor is available; start-up land is plentiful and economically feasible; and he is able to secure start-up capital. This leaves entrepreneurship (innovation/other intangible characteristics) and knowledge about his proposed craft that requires focus.
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To encourage entrepreneurial growth, governments might _______.
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pass laws that enable businesspeople to write contracts that are enforceable in court The government can lessen the risks of entrepreneurship by passing laws that enable businesspeople to write contracts that are enforceable in court. In countries that don't yet have such laws, the risks of starting a business are that much greater.
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Eduardo has many business ideas that could satisfy the unfulfilled needs of people who live in his community. However, there are laws that govern the type of businesses that private citizens can own and business taxes are high because the government subsidizes many social programs in his nation. Challenges in the _________________ environment increase the risk of Eduardo starting a business.
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economic and legal The legal and economic environment can either increase the risk (too many laws may restrict trade; increasing taxes may act as a disincentive for starting a business), or decrease the risk (the ability to successfully find capital; laws that permit competition, and laws that keep taxes at a minimal level) of starting a business.
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Efficiency means _______.
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producing items using the least amount of resources Efficiency means producing goods and services using the least amount of resources.
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At Backstreet Books, Inc., the department manager uses a hand-held scanner to determine the quantity of each best seller the bookstore has on its shelves, how many of each book was sold the past week and the past month, and exactly when the next shipment of these books is expected to arrive. Backstreet Books embraces the strategy of _______.
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using technology to stay responsive to customer needs Businesses must explore the technological environment that surrounds their respective industries. When scanning the technological environment, it is important to ask the following questions: Are there technologies the business could employ that would enhance the product or service offering? Are there technologies emerging that could threaten the demand for the products or services offered?
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Blake wanted to offer high quality basics in his restaurant. His motto was "the best darn meat and potatoes for miles around." The locals agreed that the food was good. They also agreed that if you decided to eat there, be prepared to wait. Food preparation and service were slow. Although Blake's motto stated the business's competitive advantage, your accurate advice to Blake would be _______.
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the winning competitive advantage is one that addresses quality and service In today's competitive environment, customers are looking for a combination of good quality and good service.
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Lance and Laurie live on three acres of land in North Carolina, with two llamas, five goats, six chickens, and two dogs. The goats provide milk, cheese, yogurt, and even fiber that is woven into yarn; the chickens provide free-range eggs; and the llamas serve as protection for the other animals. Although Lance and Laurie have other professional jobs, their home lifestyle represents _______.
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a growing trend in the social environment to have more control of the food they eat and where it comes from An important social trend that continues to grow in strength is a concern for what we eat and where it comes from. Business managers must continually scan the social environment for changes in attitudes, beliefs, and lifestyle trends.
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In the technological business environment the opportunity would be the internet, the challenge would be_______, whereas in the global business environment the opportunity would be ______ and the challenge would be war and terrorism.
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Identity theft and green living With more and more advances in using the Internet to gather information and enact business, there has been a significant increase in identity theft. Saving energy and producing products that cause less harm to the environment is a trend called greening.
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Since the mid-1980s, the __________ sector has generated the most amount of increases in employment in the United States.
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service Together, services make up more than half of the American economy. Since the mid-1980s, the service industry has generated almost all of the U.S. economy's increases in employment. Although service-sector growth has slowed, it remains the largest area of growth.
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Today, high-paying service-sector jobs in the U.S. can be found in ___________________.
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entertainment Today, high-paying jobs in the service sector include healthcare, accounting, entertainment, and telecommunications. The service sector is also where most hiring is occurring. The service sector makes up 70% of the value of the U.S. economy.
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****** Chapter 2 ****** The way in which a country's resources are utilized to produce goods and services; and, the way those goods and services are distributed among those who desire to have them depends upon ______________.
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The economic system under which the country operates Economics is about the management of scarce resources. The economic system under which a system operates determines what gets produced; how much gets produced; and, who gets it.
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The famous actor, Robert Redford created The Sundance Film Festival, where talented, young directors and producers can submit their films for review and possible showing. The festival attracts thousands of tourists each year, employs many others at various capacities, and provides important exposure to up and coming artists who may otherwise not be able to get their works noticed. Ultimately, the festival provides social and economic benefit for many. Adam Smith believed that one's self-directed gain would eventually create prosperity for many, and called the process, the ___________.
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invisible hand The Invisible Hand concept refers to how one's self-directed gain can eventually lead into social and economic benefit of others. This concept was first described by political economist, Adam Smith.
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At a young age, Lita's coaches were confident she had the potential to be a world class swimmer. They encouraged her parents to do as much as they could to further develop her skills, because a future in Olympic swimming could set her for life, including promotional endorsements and coaching positions when her competitive days were over. After four years on an athletic scholarship and Olympic experience under her belt, she chose a different path. With her savings and personal connections, she rented a corner building in a bustling San Francisco neighborhood and pursued her dream: a surf shop business. After several successful years, Lita was certain that Adam Smith would smile because:
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he laid the foundation for her success: She had freedom of choice. Adam Smith believed that a capitalistic system would be beneficial, as long as society embraced four basic rights. One of those rights was the freedom of choice, meaning the freedom to choose the type of business or profession to pursue.
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Which of the following best describes a capitalistic nation?
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Most or all of the factors of production and distribution are privately owned and operated for a profit. In a political and economic system known as Capitalism, most or all of the factors of production and distribution are privately owned and operated for a profit. This means that businesses are privately owned by one or more persons or stockholders .
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In a free-market economic system, if consumers perceive the price for a state of the art cell phone is too high for the value received, they are likely to avoid buying it. In the same light:
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if the consumer's desired price is too low, producers may limit the amount produced. In a free market economic system, the mechanism of "price" determines how much of a product consumers demand, and how much producers are able to produce. If consumers demand less of a product because they do not see value for the price the producer/seller is asking, in the long-run, producers will limit the amount they are willing and able to produce. As noted by the supply curve, producers are willing to produce more of the product, if they are able to charge more for the product.
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Ray's mom specifically asked for a CIP cast iron pan for her birthday. As Ray scanned the cast iron pans in two department stores, he found ten different brands, none of which were CIP. When he found CIP in a kitchen specialty shop, he was challenged to tell the difference between his mom's choice and the others. In his business class, he learned about ______________, where many sellers may be offering very similar products. Through other means, each seller differentiates his product from the competition.
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monopolistic competition Monopolistic competition is defined by many sellers who sell very similar products, but are able to differentiate from the competition through advertising and branding.
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You studied for two hours each day, for an entire week before your first marketing exam. On exam day, when you turned-in the test, you felt confident that your effort paid-off. At the next class meeting, your instructor said she was considering curving the grades because the class average was lower than she had anticipated. All of a sudden, your 98% score did not have the same impact that it did when you first saw it! Now the guy next to you that got an 84% was likely to have an "A" grade too. As you analyze this situation, you realize that it parallels an economic system such as ________________, where even if you work harder than another person, you are likely to realize the same benefit.
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Socialism The premise of socialism is that wealth should be more evenly distributed among people. Socialistic nations provide more government funded services for society.
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In order for the value of goods and services to be counted as part of a nation's gross domestic product:
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the goods and services must be produced within the physical boundaries of a particular nation. Gross Domestic Product = the value of all goods and services produced within the physical boundaries of a particular nation in one year's time.
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According to the BEA [Bureau of Economic Analysis], during the period between 2007 and 2010, real GDP decreased at an average annual rate of 0.3%. This news would lead you to conclude:
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productivity in the U.S. also decreased. GDP [Gross Domestic Product] the measurable value of all goods and services produced within the physical boundaries of a nation, in one year. GDP is a standard measure of productivity and positively correlated with GDP.
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The following chart reflects the U.S.'s GDP [Gross Domestic Product] for the past five years. Which of the following statements best reflects the health of the U.S. economy during this time period? 2005 $12.62 trillion 2006 $12.96 trillion 2007 $13.21 trillion 2008 $13.16 trillion 2009 $12.70 trillion 2010 $13.09 trillion
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The U.S. economy fell into recession in 2008 and 2009. Two consecutive quarterly declines in GDP constitute a recession. The annual decline of GDP realized in 2008 and 2009 indicated that the economy was in recession.
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The U.S. unemployment rate is an important, key economic indicator because most of us need jobs to maintain our standard of living. A criteria used to calculate the unemployment rate is:
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unemployed persons age 16 and over, who have been looking for work during the past four weeks. The unemployment rate is defined as the number of persons age 16 and over who do not have jobs, and who have been looking for work during the past four weeks.
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The CPI [consumer price index] measures ________________ and ________________.
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inflation and deflation; includes energy and food as part of the market basket of goods and services that it measures. The Consumer Price Index is a measurement of inflation and deflation. The market basket of goods that is regularly measured includes housing, energy, food, apparel, medical care, and an "other" category.
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At Six City Wellness Center, Greg operates a new state-of-the-art MRI scanner that serves approximately 10 patients during his 8-hr. shift. Patients are scheduled for various lengths of time, depending on which part(s) of their body requires scanning. The image quality is significantly superior to what it was on previous scanners, but the number of patients served per day remains the same. This situation attests to the fact that:
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the service sector has seen improvement in quality of service, but productivity remains about the same. Although technology has improved the quality of tools that we use to provide service in the service sector, the number of customers that we can serve in a fixed time period has not significantly improved.
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A few years ago, the American Society of Civil Engineers published a report card for America's interstates. It was reported that road repairs cost the American taxpayers $67 billion per year. Through the enactment of ___________ the U.S. government collects tax dollars and then spends some of these funds to maintain the infrastructure of the nation. Increasing taxes has the effect of drawing money away from the private sector.
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fiscal policy Fiscal policy refers to the federal government's efforts to keep the economy stable by increasing or decreasing taxes. Increasing taxes draws money away from the private sector and puts it in the hands of government.
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Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased. High demand has brought about shortages in some product categories. To help manage the situation in the short-term:
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the Fed will likely increase interest rates. The Federal Reserve Board, open market committee makes decisions to raise or lower the interest rate known as the federal funds rate. This is the rate that the Federal Reserve charges member banks to borrow funds. Member banks pass along the higher or lower interest rate charges to their clients. If the Fed believes that the economy is growing too quickly and demand for several product categories is forcing prices too increase too rapidly, it may decided to tighten the money supply by increasing interest rates.
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****** Chapter 3 ****** The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________.
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The Theory of Comparative Advantage The theory of comparative advantage states that a nation will produce those goods and services that it produces efficiently and effectively. It will buy goods and services from other nations that it cannot produce as efficiently and effectively as the other nation.
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The nation of Andolvia exports $50 million worth of products and services and imports $44 million worth of products and services. Andolvia has a(n) _____________.
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trade surplus Trade surplus means that the value of a nation's exports exceeds the value of its imports. A trade deficit occurs when the value of a nation's exports is less than the value of its imports. In this example: Exports less Imports = trade surplus. $50 million - $44 million = $6 million trade surplus.
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As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________.
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the cost of producing and marketing the product in a foreign market is significantly reduced Licensing refers to the strategy of giving permission to a foreign company to produce and sell your product or service. In exchange, the foreign company pays your company royalties, which usually consist of a percentage of revenues or profits. An important advantage is the reduction in costs of production and selling, because the licensee most often covers these expenses.
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_______________ is a cost effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. A domestic firm contracts with a foreign company to produce and private-label the goods, at a much cheaper price than the domestic firm could produce the same goods in its home market. The major cost differential is usually cheap labor.
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Contract manufacturing Contract manufacturing refers to the outsourcing of the production of a good or service to a foreign producer. Contract manufacturers will private-label the goods for other companies. Most often due to cheap labor and the proximity of resources, the foreign manufacturer can produce the product or service with minimal expense compared to what it would cost the company to produce it in its domestic market.
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Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park business showed strong interest in buying land in Frollik, including beach front property, with the intent of building an entertainment park targeted toward families. The theme park company wants to make a commitment to Frollik, including the hiring of several hundred local employees. The global marketing strategy referred to in this scenario is ____________.
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foreign direct investment Foreign direct investment refers to buying property and/or businesses in a foreign country, and making a commitment to produce and provide its product or service in that market. Foreign subsidiaries are one of the more common forms of foreign direct investment.
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The strategic alliance between Coca Cola and Nestle has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a global marketing strategy, an important characteristic of a strategic alliance is _____________.
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participant companies do not share costs or profits A strategic alliance is a long-term arrangement between two or more companies with the intent that each company will achieve a competitive market advantage. The companies do not share costs or profits.
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Sovereign wealth funds (SWFs) are a fast growing form of foreign direct investment. The size of these funds and the fact that they are investments from the government coffers of other nations might be a cause for concern. More specifically, some fear __________.
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the governments who offer these funds may obtain sensitive technologies or gain control of strategic resources Sovereign Wealth Funds are the government funds of cash wealthy nations, who wish to invest these funds in foreign corporations, where they believe they can get a good return on investment. The large size as well as the fact that these are government funds makes some fear that foreign governments may obtain sensitive, technological information or that the management of these firms could be undermined by the decision makers in the countries where these funds originate.
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According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade.
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sociocultural Sociocultural challenges include differences in religion, attitude, personal communication, manners, and customs.
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Barkley wants to sell his bicycle horns to the Beijing and Shanghai markets, due to the high volume of bicycles as a common form of transportation in these two heavily populated cities. The exchange rate as of yesterday was $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?
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Not good. If the horn sold for $3.00, it would take 19.26 yuan to by it. Currency exchange rates continue to challenge global trade. In this scenario, it takes 6.42 yuan to = $1.00. Chinese customers would have to exchange 6.42 yuan for $1. They may prefer to buy a domestically made horn for less.
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During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry.
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import quotas Import quotas are protectionist policies structured to limit the number of products in certain categories that a government will permit to be imported into its nation.
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Belonging to the EU (European Union) has its advantages for member nations. One advantage is ___________.
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European Union members have a common external tariff, but no internal tariff The European Union is one of several common markets designed to provide trade benefits for its member nations. These nations have a common external tariff and no internal tariff; however, most are highly structured organizations with laws that facilitate the exchange among members.
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Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute.
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the WTO (World Trade Organization) The World Trade Organization (WTO) is a 153-member international organization whose purpose is to facilitate trade among member nations. The WTO listens to and mediates cross-border trade issues among its members. The WTO was established after the Uruguay Round agreements.
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______________ has dethroned Germany as the world's largest exporter.
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China Not only has China dethroned Germany as the world's largest exporter, it has surpassed Japan as the second largest economy in the world.
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Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.
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questionable safety and quality issues with finished products There is concern that many products produced abroad do not meet the safety standards required for selling in the U.S. The quality and precision of products are also questioned.
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We refer to the BRIC nations as four economics powers that will likely dominate world trade by 2030. It is predicted that the two that will supply the world with most of the raw materials are ___________.
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Brazil and Russia The BRIC nations are Brazil, Russia, India, and China. It is predicted that these nations will be the wealthier economies by 2030. The prediction is that Brazil and Russia will produce and sell most of the world's raw materials, while India and China will be the leading global suppliers of manufactured goods.
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****** Chapter 4 ****** Ethics are the standards of right and wrong set for us by society, whereas the law is __________.
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the minimum protection a society enacts toward behavior that is harmful to many Laws are minimum standards set by a society to prevent harmful behavior.
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If your supervisor directed you to enter false information into a sales order book and told you if you refused that you would lose your opportunity for promotion, you would probably consider this situation to be a(n) ________________.
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ethical dilemma An ethical dilemma occurs when you are asked to take action that you believe might be harmful or unfair to others.
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Jake served on a committee of employees who were charged with selecting three co-workers to honor at the holiday banquet. One employee whose name was at the top of everybody's list was instrumental in helping another employee who failed to wear his protective gear avoid a serious head injury. Although this was a noble act, Jake knew that the hero was frequently negligent about wearing his own head gear. Jake knew that several other employees followed strict company policy every day and always wore their head gear; yet, they were not being acknowledged for their compliance. These employees also knew Jake was representing them on this committee. According to Normal Vincent Peale, which of the following questions should Jake refer to as he proceeds to make an ethical decision?
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How does the action I am proposing to take make me feel about myself? Normal Vincent Peale suggests that decisions that solve ethical dilemmas should be evaluated against three questions: 1) Does the decision follow laws and company policy? 2) Is it balanced—is there a sense of fairness in the decision? 3) How does the decision made make me feel about myself?
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Encouraged by the new Sarbanes-Oxley law, individuals who report unethical or illegal behavior within an organization are referred to as ____________.
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whistleblowers Whistleblowers are insiders who report illegal or unethical behavior.
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The first day on the job waiting tables at a popular restaurant, Ashley noticed that when one member of the wait staff was serving a very large party, the other waiters would help with carrying food to the table(s) and even checking to make sure water glasses were filled and condiments were on the table. Although these actions were not part of the mandatory wait staff training, Ashley perceived that those who were not as attentive to helping out were not viewed as team players by the majority of employees. Ashley was observing an example of the ___________ followed at this organization.
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integrity-based ethics Integrity-based ethics are informal company behavior that evolves from individuals' desire to make things better for all. These define the company's guiding values, and most often it involves shared accountability.
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A legal provision known as the _______________ now provides for an award for whistleblowers whose actions result in a legal conviction. The monetary award may total as high as 30% of the amount collected for violations, above the first $1 million.
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Dodd-Frank Wall Street Reform and Consumer Protection Act The Dodd-Frank Wall Street Reform and Consumer Protection Act provides whistleblowers an award if their actions lead to an enforceable action or conviction. This is called a "bounty" provision because as stated, they may receive a monetary award for their actions.
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Proponents of corporate social responsibility strongly believe in benevolence; however, they still want their businesses to be profitable. In the long run, they believe ______________.
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CSR can lead to even more profits Corporate social responsibility (CSR) is the concern businesses have for the welfare of society. Businesses can show their CSR in many ways. Its premise is based on integrity, fairness, and respect for others. Companies that participate in CSR typically have more loyal employees and customers. In the long run, CSR enhances profits.
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When an F5 tornado hit a town in southern Missouri, the people that lived there needed the basics: food, water, and shelter. The owners of Boccardi's Ristorante in St. Louis initiated an endeavor of driving several miles with a van of employees, equipment, and food to donate what they could to the storm victims. The business term we use to describe this philanthropic action is ___________________, where a company donates what it does best to help make a situation better.
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corporate social initiative Corporate social initiative refers to a company taking the initiative to utilize its expertise to make a situation better.
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The last recession changed the way many companies give. Monetary donations _______________. Many firms chose to ______________.
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decreased; encourage their employees to volunteer their time During the last recession monetary contributions decreased and companies found ways to continue their philanthropic participation by asking employees to donate time to corporate social initiatives and other projects.
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Progressive companies use __________ to communicate their CSR efforts with the public. Toyota ran a contest where it donated 100 cars to nonprofit organizations, voted on by Facebook™ and Twitter™ participants.
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social media Social media is a popular method that businesses now use to communicate their benevolent actions to their customers and others. Interactive media allows interested consumers to comment on a firm's actions.
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A few months ago, Pedro's Pizza House, a large nationwide chain of restaurants, purchased one of its competitors, Italian Stallion Pizza Stations, for $800 million. Italian Stallion stockholders got a very fair deal for their stock: $6.50/share above market value. The event was not without its problems. An ethical issue arose when it was speculated that somehow a member of Pedro's management team mentioned the deal to a person he sat next to on a flight from LA to Seattle. That person called five of his relatives. Three of them quickly bought shares of Italian Stallion and "got on record" before the acquisition. The ethical dilemma that occurred is called _________.
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insider trading Insider trading refers to the discussion or leak of private, proprietary information about a firm that is not yet made public. Typically it is the kind of information where parties in the know can benefit. Due to the fact that it is not yet public, those who act upon the information have an unfair advantage and stand to gain financially. It is an act that is against the law and against Securities and Exchange Commission policy.
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The Pak-It-Your-Way Company makes custom packaging of all kinds. The firm has evolved into a big business due to quality and innovative work. Recently, top management asked company departments to list and evaluate the kinds of socially responsible efforts conducted internally and externally in the business and also to list negative occurrences that supervisors observed. Top management is essentially conducting a(n)_____________ . A measurable category would reasonably include _______________.
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social audit; amount of pollutants due to the manufacturing of Styrofoam containers A social audit is a systematic evaluation of a company's progress toward becoming a socially responsive organization. Both positive and negative activities are measured. The amount of pollutants a firm unleashes into the environment would serve as an example of a negative activity that would be included in the social audit measurements.
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Besides environmental groups, unions, and investors, a new type of watchdog organization that reports on corporate social responsibility efforts is _____________.
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socially conscious research organizations Socially conscious research organizations collect information on the social responsibility efforts of companies.
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U.S. companies that operate abroad, particularly those who contract with foreign companies, are now _______________________ human rights and environmental standards followed by U.S. law.
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separating themselves from suppliers who violate There is significant pressure on U.S. companies to separate themselves from suppliers who violate human rights and environmentally progressive guidelines.
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Which of the following statements reflects upon the difficulty companies face when requiring international suppliers to follow environmental and human rights standards set by U.S. firms?
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Both economics and culture enter into the discussion of fairness concerning international suppliers who do business with U.S. firms. Demanding developing countries to adhere to U.S. law is not clear-cut. Economic conditions in some developing countries make child labor a necessity for survival for families. In other situations, traditions and customs make gifts and other bribery-type activities the norm in some nations.
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****** Chapter 5 ****** When Greg started his window-washing business, he wanted to keep things simple. As recommended, he filed a record of the business with the state where he resided. He carefully watched his expenses including state filing expenses and licensure requirements. Greg knew his financial resources were limited, but after all, it was only "him." There were no other family members to support. Greg could easily form a ___________________.
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sole proprietorship A sole proprietorship is an easy form of business ownership to form with limited start-up expenses, unlimited liability, and no special taxes; meaning the profits from the business are taxed at the individual owner's personal income tax rate.
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Unlimited liability means ___________.
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the business is responsible for the debt it incurs. If the business cannot pay its bills, the debt burden transfers to the owner(s), and he/she/they are liable for all debt When the business accepts unlimited liability, any debt the business incurs is the burden of the owner(s). The owner assumes all liability for paying these bills.
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Partnerships refer to more than one owner. The difference between a general partnership and a limited partnership is a ______________.
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limited partnership consists of general partners and limited partners, at least one of each General partnerships are businesses with more than one owner, all actively involved in the business. The profits are usually divided in the manner agreed upon by the partnership agreement. A limited partnership consists of at least one general partner actively involved in the business, and one limited partner who has invested in the business and seeks to realize a portion of the profits, but is not actively involved in the operational decision making.
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When Ben joined his Uncle's oil exploration company in southern Oklahoma, he was given several hundred shares of stock in the firm, and was officially made a partner. The firm's accountant explained that the company paid taxes the same way as regular partnerships, by passing the profits through to each partner. Ben could purchase more shares of the company on a public stock exchange, as long as someone was willing to sell his/her shares. This firm was likely a special form of ownership called ___________________.
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master limited partnership A master limited partnership pays taxes like other partnerships, by passing the profits through to the individual owners, and thus accounting for those profits on each owner's federal tax return. Similar to a corporation, the master limited partnership's shares actually trade on a stock exchange.
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A brother and sister team, Jack and Julie took over the family's Italian restaurant business as general partners when their father died. The transition was difficult in the beginning and they mortgaged their homes in order to get the cash they needed to keep the business going. Julie operates one of the three locations and keeps the firm's books and orders supplies and equipment for all three locations. Jack operates the other two restaurants. While Julie's restaurant is doing well, Jack's locations are in trouble. In fact, they are losing so much money that the partners are in danger of going bankrupt and losing their homes. Julie believes that she should not be responsible for the debt since her location is thriving. If the business fails Julie thinks Jack should be the only one responsible for the debt. Jack believes that they are both responsible for the partnership's debts. Who is right?
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Jack, because partners both share unlimited liability. If one or the other fails to meet his/her financial commitment, the other partner is liable for the debts as well.
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Which of the following lists characteristics typical of a C-Corporation?
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Taxed separate from its owners who also enjoy limited liability. C-Corporations are taxed separate from their owners; and owners enjoy limited liability.
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When Dave, Dan, and Darwin lost their jobs during the last recession, they pooled their resources, borrowed a little more, and bought a couple of houses to renovate. Darwin was a single guy with two other residential properties that he rented out. Dan and Dave had families with college-age children; they owned their homes, and Dan had a wife that worked at a professional job. All three were concerned about the risk involved in owning their own business, particularly the risk of losing personal assets. As their advisor, which of the following forms of business ownership would you recommend?
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Limited Liability Company The advantage of the LLC, Limited Liability Company, is limited liability (members are only liable for the funds each invested) and a choice of how the organization will be taxed. In this case, the partners were concerned with liability. The other three forms of ownership have unlimited liability.
question
Twenty years ago, your parents invested in Sears. As the years have gone by, the investment has grown. However, if Sears should go out of business, what would happen?
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Your parents will only lose the value of their shares. According to the text, the corporation's stockholders are its owners. It further points out: "What this means for the owners is that they are not liable for the debts or any other problems of the corporation beyond the money they invest." For your parents, this means they would only lose the value of their shares.
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You inherited 500 shares of GE stock from your Great Aunt Martha. As you contemplate selling the shares, your accountant informs you that the company pays a generous dividend, and advises you to start watching the firm's profits. When you are awarded the first dividend, you learn that it is considered a source of income and you will be taxed on that amount. You find this bothersome because the firm paid the dividend from after-tax profits (these dollars were already taxed). This phenomenon is called __________.
answer
double taxation If corporations issue dividends to stockholders, these amounts are considered income and as such are taxed as the personal income of the stockholders. After-tax profits, though, have already been taxed. The corporation paid taxes against those dollars prior to issuing them as dividends. In the following example, the $11,700,000 earnings was part of the original $18,000,000 that the firm earned, and as such, it was already taxed once. If the $11,700,000 is issued to stockholders as dividends, it will be taxed again. Earnings before taxes $18,000,000 Tax Expense (@35%) - 6,300,000 Earnings after taxes $11,700,000 [dividends are paid from this remaining amount]
question
A firm's management purchases all the issued and outstanding stock of the firm and takes the company off the stock market. The management of this company has engaged in ____________.
answer
taking the firm private Taking a firm private involves the efforts of a group of stockholders or management to obtain all of the firm's stock for themselves.
question
If the employees of San Simeon Company successfully borrowed a large sum of money and purchased the firm from its current owners, we would call this event a ___________.
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leveraged buyout Leveraged buyout (LBO) is an attempt by employees, management, or a group of investors to purchase an organization primarily through borrowing. The funds borrowed are used to buy out the stockholders in the company. The employees, managers, or investors now become the owners of the firm. When managers buy all of the stock of a firm and take it off the open market, it is referred to as taking the firm private.
question
Maverick Motors was a small manufacturing company that made motors for compressors used in air conditioning systems. Maverick purchased Calvert Compressor Company which essentially became Maverick Motors' largest customer. This strategic decision is termed a:
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vertical merger A vertical merger is the joining of two firms at different stages of related businesses.
question
A few years ago, in order to gain market share, Blackboard™, a well-known learning management system software company used by many colleges and universities, joined forces with WEB CT™, another learning management system software company. Both companies were in the same industry and originally competed against one another. In business, we would call this event a(n) _______________.
answer
horizontal merger A horizontal merger is the joining of two firms in the same industry, often producing very similar products or services. This strategic move is usually for the purpose of the purchasing firm increasing its market share and competitive advantage.
question
In his search for a franchised business that would satisfy his passion for the outdoors and also earn him a decent living, Asher noted that the shared profit criterion required of franchisors had significant variance. Some required franchisees to pay 8% of their monthly revenues to the franchisor. Others required 3% of the profits. In business we refer to this obligation as a ______________.
answer
royalty fee Royalties are shared profit obligations that the franchisee agrees to pay the franchisor. This payment can be in the form of a percentage of the revenues or a percentage of the profits. Shared profits are usually considered a disadvantage of owning a franchised business.
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Advantages of _________________ include reduced start-up fees and no territory restrictions.
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online franchising Starting an online franchise has its advantages in reduced franchise fees, lower start-up costs, and no territory restrictions.
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****** Chapter 6 ****** Entrepreneurs emphasize the importance of believing in your own ideas because in the process of developing those ideas you are likely to hear from skeptics. Characteristically, they also know that success or failure is "on them." These attributes are described as _____________.
answer
self-directed and self-nurturing Self-directed entrepreneurs know they must be self-disciplined. Success or failure is in their hands. Self-nurturing entrepreneurs believe in their own ideas.
question
Reed Hastings started Netflix. His inspiration came from the fact that he had to pay a sizeable late fee for returning a DVD beyond the due date at a rental store. It took a few tries to develop the winning business model. Which statement accurately describes his success?
answer
His idea solved a problem. Hastings turned his problem into an opportunity. He knew if he was interested in a better way of renting movies others likely would also have the same need.
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An opportunity has evolved that has leveled the playing field for home-based businesses. ___________ has made starting a home-based business much more affordable.
answer
Broadband Internet connections and other technologies Computer technology, including broadband Internet connection and smart phones, has leveled the playing field between big business and small business.
question
Pam logged onto her Facebook™ account and noted that Sallie "liked" two different websites. Since Sallie is a good friend of Pam's and a reliable source of information, Pam linked into these websites and decided to purchase from one of them. A common strategy for web-based business is _______________.
answer
affiliate marketing Affiliate marketing is a popular strategy for web-based businesses. As described in the scenario, friends direct friends to websites that they believe provide value. The friend becomes the referent.
question
Andre works for a company that promotes an entrepreneurial culture. Employees are encouraged to discuss new ideas. Development time is provided for those ideas that float to the top. Employees who use their creative talents to generate ideas within large companies are _________.
answer
intrapreneurs Intrapreneurs are employees who are encouraged to perform entrepreneurial activities within a large business.
question
When Parker started his business, he knew he had to keep costs to a minimal and he worried about taxes. He planned to build and distribute safety goggles for construction workers and military personnel. Most of his business would not be walk-in customers. He chose to locate in a government subsidized area called a(n) ________________, where he would receive tax breaks.
answer
enterprise zone Enterprise zones are government subsidized regions. Usually they are locations that the state or local government would like to see improved and revived.
question
Why do incubator facilities continue to remain very popular with start-up businesses?
answer
They have a very strong success rate. Their graduates almost always succeed. It is reported that 87% of all businesses that start in incubators succeed.
question
Why do experts agree that small business management and large business management are similar in practice?
answer
Similar to large businesses, small business have concerns about capital and good marketing and management. Large and small businesses alike are concerned with raising capital, maintaining a good flow of information, marketing, and good management.
question
While on a trip to South Africa, Erin was impressed with colorful woven outdoor placemats, floor mats, chair cushions, and umbrellas that local artisans were weaving. Upon her return to the U.S., she was confident that others would also be intrigued by these accessories. Erin decided to explore the possibility of starting an importing business to bring these products to the U.S. consumer. Which of the following statements stands out as good advice for Erin?
answer
Learn from others who import goods from abroad, and particular from Africa. Good advice is to try to find others in the same or similar business and learn from them. Also, there might be opportunities to apprentice with others in the import business.
question
Although the Business Plan has a great amount of detail and requires thoroughness, a well-explained idea will come to life almost immediately in which part of this document?
answer
The executive summary. The well-conceived and well-explained executive summary will attract the attention of more readers than any other part of the Business Plan. It is a summary of the highlights of the document and strongly advocates the product's or service's competitive advantage.
question
Organizations known as _______________ have a significant role in the economic recovery. Some start-up businesses have successfully found sources of capital by going through one of these organizations.
answer
CDFIs (Community Development Financial Institutions) CDFIs are organizations that have played an important role in the recent economic recovery because they have been able to accumulate sources of funds for lending to small businesses. These funds have originated from large institutional investment companies and the U.S. government.
question
SCORE is ____________.
answer
an organization affiliated with the Small Business Administration where retired experts volunteer to provide free advice small businesses that are just getting started An important source of information for small businesses is the Service Corps of Retired Executives (SCORE). Volunteers from industry, trade associations, and education counsel small businesses at no cost (except for expenses).
question
A small business advantage is ____________.
answer
the ability to quickly adapt to customer needs Understanding the market is very important for small business success. Due to their size and flexibility, small businesses can often adapt quicker to changes in the market, including changes in preferred product offerings and delivery methods.
question
Going global is wide open for small business because ____________.
answer
although this is predicted to change, currently, only about one percent of small businesses are exporting Only about one percent of all small businesses participate in export trading. This is a great opportunity, and it is predicted that this will change by 2015.
question
While cultural differences and bureaucratic paperwork for foreign governments make the prospect of global trade difficult for small businesses, there is one bright spot on the horizon that has brought global trade closer to home. Small businesses can now ___________.
answer
use technology such as PayPal™ to fulfill orders, which gives them some assurance of payment Technological advances have made it much more feasible for small businesses to trade abroad. PayPal™, for one, allows for prompt international payments.
question
****** Chapter 7 ****** use technology such as PayPal™ to fulfill orders, which gives them some assurance of payment
answer
Contemporary managers will focus on global issues and green issues, and continue to emphasize the team approach to work. Managerial roles will continue to emphasize the team approach in working and solving problems. Contemporary managers will have an eye on "green" business—using green products in their operations and producing green products and services for others. They will also continue to have a global business focus, and be skilled in areas that serve a global business such as knowledge of foreign languages.
question
Contemporary managers ___________.
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emphasize teamwork and cooperation, and act as coaches, rather than "bosses" Managers are educated to guide, train, support, motivate, and coach employees rather than to tell them what to do. There is more emphasis on working in teams and team building. Most modern managers emphasize teamwork and cooperation rather than discipline and order giving.
question
Jenna started a small business a little less than 10 years ago. The business employed several social workers and nurses that visited and cared for persons who had left hospital care, but were not quite ready to be on their own at home. As the CEO of the firm, Jenna decided it was time to hire a business operations manager and a marketing manager to handle the details of the business. Which of the following functions of management was Jenna performing?
answer
Organizing Jenna was performing the organizing function of management. By hiring additional employees, she was designing the structure of the organization.
question
A mobile veterinary business, Preferred Pet Care, Inc., created a mission statement long before it opened its doors for business. The mission statement referred to the unique characteristics of the business: a traveling pet unit whose veterinarians went to the home of the pet owner, rather than the pet owner bringing the pet to the clinic. What other criteria should be considered for the mission statement?
answer
A description of the customers it serves and a statement about its social responsibility to the area where it operates. The mission statement should describe the main product or service that the firm offers. It should describe the customer market it serves. It can also include the company philosophy (value statement) and social responsibility statement.
question
Most businesses follow a logical process when performing the planning function. It is important to understand ______________________, before embarking upon creating future long-term goals, objectives, and strategies.
answer
the current situation Before proceeding to write long-term goals, objectives, strategies, and tactics, managers must understand the current situation—in other words, things like the strengths and skill of employees, the firm's financial position, the current economic situation, the competitive situation, and any new technology that may serve the firm as it plans for growth.
question
A traditional tool that serves as a way or organizing the company's current situation is called the SWOT Analysis. This is an acronym for ___________.
answer
Strengths, Weaknesses, Opportunities, Threats SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. This is a type of analysis performed during the preliminary steps of the planning process.
question
After 8 years of working for a company that installed underground sprinkling systems for golf courses, Jake was ready to venture into his own business. As he prepared his SWOT analysis, he evaluated where he stood at this time. He was fortunate to have $100,000 financing to get the business under way. He knew of three skilled installers who were willing and interested to work for him, and he was aware that new construction was at an all-time low, with several residential properties being foreclosed. In reviewing his list, you would categorize these events as __________.
answer
two strengths and one threat Jake had two strengths (these are internal to the operation): (1) $100,000 financing, (2) three skilled installers. He had one threat (external to the operation): (1) poor economy evidence by very little new construction and property foreclosures.
question
All managers do planning. Allison is a general manager for a large toy store. Each day she plans the number of employees she will have in each department, including the number of cashiers. She plans the break schedules and the freight delivery schedules. In the business world, we refer to this type of planning as ___________.
answer
operational planning Allison is performing operational planning, where work schedules and assignments are planned. Operational planning focuses on the planning performed by supervisors and the kinds of activities that employees would perform.
question
As managers perform all functions, we recognize that ______________ is required. For example, when making plans, the manager must typically choose between two or three alternatives, sometimes equally good ideas or sometimes ideas that each has its pros and cons.
answer
decision making Decision making is happening throughout the process of performing all managerial functions. Managers usually have to choose between or among two or more alternative ways to proceed.
question
Sergey Brin and Larry Page were the founders of Google™. Most would agree that they had a superb product, but in order to grow, the company needed more structure. Together, they agreed to hire Eric Schmidt to join the executive team as the executive chairman. Schmidt quickly began performing the __________ function, where he created well-structured departments and hired skilled people to perform the various functions of the business.
answer
organizing When performing the organizing function, management will hire and train other managers to perform the managerial functions at various levels of the organization. Top management, middle managers, and supervisory managers are typically needed in most businesses. The structure is visible in the firm's organization chart.
question
Ben oversaw the work of six pharmaceutical sales managers in the southeast region of the U.S. Each sales manager managed a team of 8-10 pharmaceutical sales representatives that developed relationships with doctors, clinics, hospital pharmacies, and local drug stores. Ben met regularly with four others in his company whose jobs were similar to his position. How would you describe the level of management Ben has achieved?
answer
Middle management Middle management positions include division managers, regional managers, plant managers, and branch managers.
question
Technical skills that apply to the business at hand are most often necessary at __________.
answer
lower levels of management Lower level and supervisory level management require more technical skills. Technical skills are the ability to perform very specific tasks for a business. These are technical skills such as a programming supervisor, a scheduling manager, or a first-line supervisor.
question
Which of the following leadership styles focuses on making decisions without consulting others?
answer
Autocratic Autocratic leadership involves making managerial decisions without consulting others. Such a style is effective in emergencies and when absolute followership is needed—for example, when fighting fires.
question
Dave facilitated a hiring committee for his advertising company. Six employees (including two managers) met together to discuss applicants and select the finalists for a creative writer position in the public relations department. Although the head of public relations would have the final nod on the candidate that would ultimately be hired, the evaluative work of the committee was very important because this group would send forward those persons they believed would be good work colleagues. In setting up this type of hiring process, the head of public relations was utilizing a(n) __________ style of leadership.
answer
democratic The manager utilized a participative (democratic) style of leadership by soliciting the opinions of several employees who might directly or indirectly work with the person ultimately selected for this position. All committee members had the opportunity to bring forth their perceptions of each candidate and to articulate their selection preference, even though the department head made the final decision. The department head was interested in their input.
question
The controlling function closes the loop for managers. It answers the question: "Did we succeed in doing what we set out to do?" Which of the following business departments has a very important role in the controlling function?
answer
Accounting department The controlling function measures performance. The accounting department provides the numbers (profit and loss statements and other financial statements), which assists management in measuring how well the firm has performed. Management relies on accounting and finance in order to evaluate progress.
question
****** Chapter 8 *** *** Rachel planned to open a pastry shop in a resort town on the east coast. As she pondered her organizational set-up, she decided she would need four employees to specialize in the creation and production of delicate pastries, and three employees to greet, serve, and sell to customers.One or two of her workers were designated as supervisors. Another preliminary organizational decision that Rachel will most likely tackle is _______________.
answer
the allocation of resources within her operation Structuring the organization requires the manager to make decisions on how the work will be performed—the division of labor, setting up teams and/or departments, allocating resources, and establishing procedures for meeting the business' objectives.
question
Division of labor means ___________.
answer
tasks are divided among a group of employees Division of labor means that functions are divided into areas of specialization such as production, marketing, and finance. Although many work environments require a division of labor for efficiency, cross-functional teamwork is being given more emphasis.
question
In the past, organizational design was set up to facilitate the needs of management, rather than ___________________.
answer
pleasing customers In the past, management was more concerned with making management's job easier at work. Firms were organized to facilitate management's needs, rather than out of a concern for pleasing the customer.
question
Julie recently started working at a major urban university. One of the first things her supervisor provided her with was a large white notebook that contained rules and regulations on just about every aspect of the university's business. As a recent business graduate, Julie realized that the university operated in a(n) ___________ environment.
answer
bureaucratic Bureaucratic organizations are rule oriented. There are clearly established, written rules and procedures.
question
A manager's need to exert tight controls on subordinates is most accurately captured by which of the following?
answer
Control will decrease as the manager gets to higher levels in the organization and work becomes less standardized. Span of control is the optimum number of subordinates a manager supervises or should supervise. The text further explains that the number of workers supervised by one person gradually narrows at higher levels of the organization because work is less standardized and there's more need for face-to-face communication.
question
Accountants at Leisure Time Gaming, Inc. have a big job! Although they work with state-of-the-art systems that create financial statements every day, the interpretation and analysis of those statements can take several hours. The accounting department consists of financial, managerial, and tax accountants. One advantage of departmentalizing the accountants is ______________.
answer
for efficiency, the employees can coordinate work within the function Departmentalization has several advantages. One particular advantage is that employees with similar expertise can coordinate the work between and among each other.
question
During the past recession, Cali-Bration Company created a __________ organization, when it restructured and eliminated several middle management positions. As it emerged from the recession, Cali-Bration realized that Internet technology permitted the remaining employees to be just as responsive to customer needs as the firm was prior to restructuring.
answer
flat A flat organization structure is one that has fewer layers of management and a broad span of control (that is, there are many people reporting to each manager). Such structures can be highly responsive to customer demands because authority and responsibility for making decisions might be given to lower-level employees.
question
ABC Company desires a successful product launch. Looking outside of its industry, it solicits the advice of companies JKL and MNO who were known for successful product introductions in past years. The business term that we use to describe the practice of looking toward others for a model approach is called _____________.
answer
benchmarking Benchmarking is comparing an organization's practices, processes, and products against the firm or firms known to do it the best.
question
ABC Company was awarded a bid to build an energy-efficient motor for a large government heating and cooling project. The requirements of the project included a timeline of one year to build and deliver the system. In order to provide a quality product and stay within the time requirements, ABC Company set up a _____________ organization, whereby employees from various functions of the business would join a team to see this project through, from start to finish. Upon completion, the team would disband and members would return to their respective functional units.
answer
matrix In a matrix organization design, specialists from different functional units of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure. A project manager can temporarily assign people from different departments to help design and market new product ideas. Members return to their functional units when the project is complete.
question
In order to build the next generation of gaming software, Leisure Time Gaming, Inc., put together a______________ organization structure. The structure included suppliers, distributors, and customers, who joined company experts to pursue the company's objectives.
answer
cross-functional Cross-functional teams consist of employees who are permanent team members, each with expertise from one or more business subject areas. The teams may also consist of suppliers, distributors, and customers.
question
Transparency refers to ____________.
answer
the seamless operation of organizational partners, so that each is perceived as an integral part of the operation, and appears to be part of the same company Transparency is a concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic information is shared as if the companies were one.
question
A large commercial equine operation (commercial horse farm) provides jobs for over 100 employees, who care for over 300 horses of various breeds. The operation consists of traditional functional units which include management, marketing, and finance, and 45 veterinarians that specialize in the various breeds of horses owned by the company. Although the firm operates with a CEO, COO, and CFO, and a director of marketing, it relies on the veterinarians to make decisions on the appropriate care and environment for the horses. Sometimes the veterinary decisions override marketing and financial concerns. The commercial farm operates as a(n) _________ organization.
answer
inverted In an inverted organization, decision makers are not necessarily the chief officers of the company. Specialists are empowered to make the best decisions for the firm. These employees are supported by top management.
question
A Far-East auto company recognized the quality of air-conditioning systems that a U.S. company in the state of Indiana successfully manufactured for the U.S. auto industry. Rather than build its own, it ______________ the air-conditioning component of its models to the U.S. company, which provided several jobs for skilled trades persons in that state.
answer
insourced When a foreign company hires U.S. firms to produce products, it has the opposite effect of outsourcing. We call this insourcing.
question
Due to his reputation of putting together powerful presentations, Brock was contractually hired by Robotic Life, Inc. to help this firm introduce the value of its new robotic arms and legs to high net worth investors. Robotic Life hired Brock strictly for this special project. At this stage of its life, the firm operates as a(n) ______________, where it solicits the services of other companies on an "as needed" basis, and then releases them when the job is done.
answer
virtual corporation Virtual corporations are companies who partner with other business firms.
question
AJ was a newly hired attorney for Leisure Time Gaming, Inc. Even though he reported directly to the president of the company, AJ noticed that the president always had time to converse with the director of sales, calling on him to get a pulse on legal/regulatory issues that, as the company attorney, AJ could have probably handled. AJ also noted that the HR manager's administrative assistant was the "go to" person for a number of things that would make life easier at work. AJ was recognizing the _________________ culture at Leisure Time Gaming.
answer
informal organization The informal organizations are the friendships, cliques, and lines of authorities at work that form spontaneously outside the formal organization.
question
****** Chapter 9 ****** Which of the following factors would NOT be part of a process to improve a business' competitive positioning in a global marketplace?
answer
Reducing product quality to keep costs low. The items U.S.manufacturers are emphasizing to regain a competitive edge are:focusing on customers, practicing continuous improvement, relying on the Internet to unite companies, maintaining close relationships with suppliers and other companies to satisfy customer needs, focusing on quality, saving on costs through site selection, and adopting new production techniques. The list does not include reducing product quality to keep costs low.
question
Which of the following statements concerning the U.S. service sector today is most accurate?
answer
This sector has grown much more rapidly than the manufacturing sector. The U.S. service sector of the economy has grown more rapidly than the manufacturing sector in recent times.
question
__________ is about converting resources into goods and services. It includes inventory management, quality control, production scheduling, follow-up services, and more.
answer
Operations management Operations management is a specialized area in management that converts or transforms resources (including human resources) into goods and services.
question
An operations manager at a wood processing plant in Oregon notices that there is significant scrap and inefficiencies in the plant's operations. Which of the following techniques would he be most interested in implementing?
answer
lean manufacturing Lean manufacturing is the production of goods using less of everything compared to mass production.
question
Designing and making custom-made guitars is an example of which of the following processes?
answer
Intermittent process Intermittent process is a production process in which the production run is short and the machines are changed frequently to make different products. The text uses manufacturers of custom-designed furniture as an example of an intermittent process.
question
A company that makes fireplace mantles uses computer modeling in order to ensure that the process used makes the most efficient use of resources. The company is equipped with _____________ technology.
answer
CAD/CAM CAD (computer-aided design) uses computer programs to design products. CAM (computer-aided manufacturing) uses computer programs in the manufacturing of products. CAD/CAM makes it possible to custom-design products to meet the needs of small markets with very little increase in cost.
question
In order for a U.S. or non-European companies to export manufactured goods to European countries, which of the following would most likely apply?
answer
Companies that want to do business with the EU must be certified by ISO standards. ISO 9000 is the common name given to quality management and assurance standards. The text points out that "what makes ISO 9000 so important is that the European Union (EU) demands that companies that want to do business with the EU be certified by ISO standards."
question
As Leisure-Time Gaming, Inc.'s business and product lines continue to grow, it wants to limit the need to build additional space to house programmers and other personnel who work on new products. The company has strategically decided to adopt ________. Skilled employees can work from remote locations.
answer
telecommuting Telecommuting is the process of working remotely from the firm's main location. Many skilled employees are now working from home. Telecommuting is becoming a major trend in business.
question
Bellandro Brewery recently became certified as an ISO 14000 company. Which of the following criteria would decision-makers evaluate for this award?
answer
Environmental improvement plans. ISO 14000 is a collection of best practices for an organization's impact on the environment.
question
__________ is the process managers use to continually monitor all phases of the production process to ensure that quality is being built into the product from the beginning and that quality is not being "inspected" into the product at the end of the process.
answer
Statistical quality control (SQC) Statistical quality control (SQC) is the process managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning.
question
Anna worked for over an hour trying to set-up her new smart phone by following the brochure directions and even going online to access services. She finally gave-up and used the online locator to find the service provider's nearest location to her home. Businesses know their products can be complicated and many customers prefer on-site service visits. Brick-and-mortar locations need to ________ in order to compete for the business of busy customers.
answer
offer outstanding customer service In order to provide value, brick-and-mortar stores must provide outstanding service and select locations that are very convenient for their customers.
question
The Toyota™ assembly plant in Tennessee purchases several thousand unassembled parts for automobiles and then performs final assembly of the vehicles before delivering them to dealers all over the nation. Purchasing parts several days or weeks before they are assembled would increase the total cash outlay the plant has tied-up in inventory at any given time. In order to reduce the expense of large inventories, most assembly plants have successfully adopted ____________ inventory systems.
answer
just-in-time Just-in-time inventory systems control the amount of inventory on hand during every hour of the working day. Partner/suppliers deliver only the amount of unassembled parts that the assembly plant will need to assemble the number of vehicles that will be assembled on any particular day.
question
The project manager building a new underwater dolphin exhibit at a large urban zoo is reviewing the chronological sequence of activities that must be completed on the project and the estimated time of completion of each activity. He is studying the _________.
answer
PERT technique The PERT technique is a chronological sequence of tasks that must be completed in order to bring a project to completion.
question
The following PERT network lists all the different tasks that must occur in order for West Coast Aquatics Swim Club to successfully host a regional swim meet at the Frank Fiscallini Swim Center. The darkened boxes are the critical path because __________.
answer
this represents the path of tasks that will take the longest to complete The critical path is the path of tasks that will take the longest to complete. If the director experiences any delays in the completion of these tasks, the entire activity will be delayed.
question
The O'Donnell Company field engineers perform installation and repair on large pieces of equipment that are used in the process of making gasoline at petro-chemical plants. Each day, the on-site engineer reviews the ___________ to determine which parts of the project are in-progress and which have been completed. This bar graph also shows the engineer which equipment must be installed before other parts are started.
answer
Gantt chart A Gantt chart is a bar graph that clearly shows what projects are being worked on and how much has been completed at any given time.
question
****** Chapter 10 ****** With respect to the development of scientific management, Frederick Taylor's objective was to ______________.
answer
increase productivity at work Frederick Taylor, the father of scientific management, wanted to increase productivity at work. He studied (observed) the way that workers performed each job and timed their progress. From this observation he developed the most efficient method to do each task.
question
At the ice cream shop where Kayla works, all shoppers are greeted with the same script: "Welcome to Chill-A-While. My name is _____. How may I help you?" All shoppers must be greeted in less than three minutes after they have entered the shop. Which management theorist would have approved of this method of operation?
answer
Taylor
question
Elton Mayo's famous experiment at the Hawthorne Plant concluded ____________.
answer
people who perceive that management permits them to contribute to work decisions might be more productive The Hawthorne Studies concluded that workers who knew they were being studied, workers who were given an opportunity to be part of the work decision making, and workers who felt part of a group at work could be more productive.
question
Recently Tommy switched jobs from a large firm, to a medium-sized firm. As one of four project managers at the new firm, Tommy recognizes that employees have much more respect for his expertise than he perceived at the larger firm where there were a minimum of 25 project managers. According to Maslow, which hierarchy of need is important to Tommy?
answer
Esteem Maslow defines esteem needs as the need for recognition and acknowledgment from others, as well as self-respect and a sense of status or importance.
question
In accordance with Maslow's way of thinking, if Elizabeth secured a good paying job that paid her enough to live in a decent apartment and buy an economical car, and if she felt that her work location and her home location were relatively safe places, she would ______________.
answer
turn her focus to the next level of needs: social needs Maslow emphasizes that people will satisfy lower order needs first. Once a level of need is satisfied, we turn our attention to the next level of needs. In this situation, the next level is social needs.
question
According to Herzberg, which of the following would be considered "motivators?"
answer
Sense of achievement and opportunity for growth. Herzberg listed several work related factors. The first five included "sense of achievement" and "opportunity for growth." Both are considered motivators.
question
Herzberg's research purposefully directed managerial thinking to ___________.
answer
develop interesting jobs which might require problem solving and decision making Herzberg's research was directed toward helping managers create jobs where employees would feel more fulfilled. He separated motivating factors from what he called hygiene factors. Motivating factors such as "more interesting work" were the type of characteristic that employees desired. Employees may recognize the absence of hygiene factors, but did not consider such characteristics as motivational.
question
Motivating employees by expanding the number of jobs or tasks that they are involved with is referred to as job ___________.
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enlargement One type of job enrichment is job enlargement, which combines a series of tasks into one challenging and interesting assignment.
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McGregor recognized that ____________.
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their attitude toward workers affected how managers proceeded to motivate According to McGregor, the way the managers "manage" depends upon their attitudes and beliefs toward workers.
question
Betty is the assistant store manager at a trendy clothing store. The store hires lots of seasonal employees. Betty has little regard for the skill or ability of those she hires, and she is certain that few would come to work on time each day if it weren't for the fact that the store is known to fire any employee who fails to be on time. As a student of motivational theory, you would describe the management style of Betty as ___________.
answer
Theory X Theory X managers typically believe that employees dislike work. Most workers' primary motivators are fear and money. Due to these employee attributes, workers must be directed, controlled, and closely monitored.
question
Which of the following approaches suggests that a manager believes that employees should be involved in both defining problems and in designing the solutions?
answer
McGregor's Theory Y Rather than emphasize authority, direction, and close supervision, Theory Y emphasizes a relaxed managerial atmosphere in which workers are free to set objectives, be creative, be flexible, and go beyond the objectives set by management. A key technique in meeting these objectives is empowerment. Empowerment gives employees the authority to make decisions and the tools to implement the decisions they make. For empowerment to be a real motivator, management should follow these three steps: (1) find out what people think the problems in the organization are, (2) let them design the solutions, and (3) get out of the way and let them put those solutions into action.
question
William Ouchi's theory Z recognized ___________.
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the merits of a hybrid form of Japanese style management and American style of management Theory Z is a hybrid style of management that incorporates what Ouchi considered to be the best of Japanese style management and American style of management. This hybrid approach considers such progressive ideas as employee involvement, informal employee control (empowerment), shared responsibility, and a slower approach to evaluation and promotion.
question
A Michigan State University student spends his summer months in his hometown, where he works for a local micro-brewery during the evening hours. In the late morning, he attends the local community college, where he takes a summer course that he knows will transfer back to MSU. Although he finds the courses just as challenging as his regular university, he does not worry about his summer grades affecting his 3.2 (out of 4.0) grade point average, because MSU only accepts the transfer credits. As long as he receives C grade or better, he maintains his current grade point average. Which of the following theories suggests that the student will only work as hard as necessary to earn a "C" grade?
answer
Expectancy Theory Expectancy theory suggests that when faced with a work situation, we ask ourselves: (1) Can I accomplish what I need to accomplish? (2) If I accomplish what I need to accomplish, what will be the reward? (3) Is the reward that I am likely to receive worth the effort (do I want this reward)? If the student puts forth maximum effort, there is a good opportunity to make an "A" grade. However, if he/she completes the class with a "C" grade or better, the best he/she can hope for is credit hours toward graduation from MSU. It is not possible to transfer an "A" or "B" grade, and their accompanying grade points. Therefore, the student is not motivated to achieve a high performance.
question
Becca works for a large management consulting firm, as a junior level consultant. She recently learned that another consultant who was hired at the same time has already received a step-up promotion. Becca knows that she has contributed to well-received projects and projects that have received accolades from clients. According to equity theory, Becca may choose to _____________.
answer
increase her inputs Equity theory says that employees want to be treated fairly. If employees perceive inequitable treatment at work, they will try to reestablish fairness by doing one of several things: (1) decrease inputs (the amount of work they do), (2) rationalize the difference, (3) increase inputs, in the hopes that managers will notice the effort, (4) rationalize that he/she is worth more, and find another job.
question
An HR director was reviewing the job description for a new position in the Information Technology department of his company. He quickly jotted down a few comments that he would later share with the department manager. Among other things, his comments included suggestions for incorporating more skill variety into the job and a little more autonomy as to how the job might be accomplished from start to finish. As a student of business, you recognize that the HR director believes that a person holding this position would be motivated by _______________.
answer
job enrichment Job enrichment involves motivating an employee through the job itself. Jobs are enriched by incorporating autonomy, task identity, skill variety, task significance, and feedback into the job.
question
****** Chapter 11 ****** Today, most managers perform some functions associated with ______________.
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human resource management The human resource function has become so important that it is no longer the function of just one department; it is a function of all managers. Most human resource functions are shared between the professional human resource manager and the other managers.
question
As the director of Human Resource Management for Idle Time Gaming, Inc., Addie's responsibilities included __________________.
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recruiting talented employees, developing and training employees, and selecting tools for performance evaluations Human resource management is the process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational objectives.
question
Adam was recruiting project managers for his small business. As he finalized the job description for the position, he worried about attracting top talent. He knew the job would be challenging, but his concern was ____________. When it comes to recruiting skilled employees, this is where small businesses are challenged.
answer
compensation Small businesses want top talent but often can't afford corporate-level benefits or expensive recruiters to hunt down the best people.
question
Which agency is charged with enforcing affirmative action programs?
answer
EEOC The EEOC is the organization charged with enforcing the provisions of the Equal Employment Opportunity Act. Congress vested the EEOC with the power of enforcement to ensure that these mandates were carried out. The EEOC became a formidable regulatory force in the administration of human resource management.
question
Businesses want productive employees. __________ focuses on short-term skills, whereas _________focuses on increasing employees' long-term abilities.
answer
Training; development Training and development include all attempts to improve productivity by increasing an employee's ability to perform. Training focuses on short-term skills, whereas development focuses on long-term abilities.
question
When performing a job analysis, the human resource manager will write a job description, as well as a job specification. The job specification consists of _________.
answer
the minimum academic and experience qualifications The job specification part of the job analysis consists of a statement designating the minimum academic and experience credentials required to hold the position. It is about the qualifications of the person who will be performing the job.
question
One of the reasons that companies experience challenges obtaining employees when positions become open is ____________.
answer
it is often difficult to find a qualified candidate that doesn't need training after hire Sometimes people with the necessary skills are not available; then workers must be hired and trained internally.
question
Once the job analysis is performed, there are several well-structured steps to the hiring process. This process includes _____________.
answer
performing background checks on selected candidates, and establishing probationary periods Steps are as follows: (1) obtaining complete applications, (2) performing initial and follow-up interviews, (3) giving employment tests, (4) conducting background investigations, (5) obtaining results from physical exams, and (6) establishing trial periods.
question
At a local university, over 50% of the faculty are part-time employees, who have similar credentials as full-time employees but do not have permanent positions. These employees are seldom offered benefits and are not represented by the educator's union. HR experts would designate these professionals as __________________.
answer
contingent employees Contingent employees are part-time and sometimes seasonal workers who are employed for a short period of time. Employers will often hire contingent workers when work increases. The advantage to employers is that these employees seldom expect benefits.
question
Jake's family owned a plumbing company with a steadfast reputation of excellent work. Yet, when Jake joined the business, his father required that he spend several years working alongside two licensed plumbers. In business, we call Jake's starting position a(n) ______________.
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apprentice An apprentice is a person who spends several years in training at a skilled trade occupation.
question
When AJ was hired by Idle Time Gaming, Inc., he accepted an opportunity to be part of the management training program. Besides on-the-job coaching, a common aspect of management development programs is ____________.
answer
job rotation Management development most often includes one or more of these characteristics: (1) on-the-job coaching, (2) understudy positions, (3) job rotation, and (4) off-the-job training.
question
Companies that make a concerted effort to attract and hire women and other minority groups ____________.
answer
know that their efforts correlate with increasing women and minority customers The hiring of minority groups and women strongly correlates with increasing minority and women customers, which translates into higher profits.
question
In order to get a comprehensive evaluation of the computer programmers he managed, Justin organized a(n) __________________, where he asked immediate coworkers and others that worked closely with the programmers to participate in the evaluation process.
answer
360-Degree Review The 360-degree review calls for feedback from all directions in the organization. Instead of basing an appraisal solely on the employee's and the supervisor's perceptions, management gathers opinions from those under, above, and on the same level as the worker.
question
Progressive companies who want to attract and keep good employees are now offering their employees ________ benefits, such as onsite dry cleaning services, shoe repair, onsite medical care, and even free breakfasts.
answer
soft Soft benefits help workers maintain the balance between work and family life that is as important to hardworking employees as the nature of the job itself.
question
When Maggie joined Techno-Nerds, Inc., she automatically joined an employee team. Team members each had base salaries, but they were also compensated through a __________ system, where they would receive bonuses for team improvements over the last time the team's performance was evaluated.
answer
gain-sharing Gain-sharing systems base bonuses on improvement over past performance.
question
****** Chapter 12 ****** The ____________, now represented by large employee unions, has shifted the payroll obligations for these workers to U.S. taxpayers.
answer
public sector There are now approximately 7.6 million union employees in government. This means that taxpayers, not stockholders, are paying the cost of salaries and benefits for these employees. As state budgets become tighter, some are calling for lower wages and benefits for these workers.
question
Which of the following would be considered an outgrowth of the Industrial Revolution, according to most historians?
answer
Union movement Historians generally agree that today's unions are an outgrowth of the economic transition caused by the Industrial Revolution of the 19th and early 20th centuries.
question
Workers originally formed unions ___________.
answer
to protect themselves from intolerable work conditions and unfair treatment Workers originally formed unions to protect themselves from intolerable work conditions and unfair treatment.
question
When was it common for employees to have 60-hour work weeks?
answer
Early 1900's The length of the average workweek in 1900 was 60 hours, but an 80-hour week was not uncommon for some industries.
question
_________________ was legislation that established the minimum wage in the United States.
answer
Fair Labor Standards Act The Fair Labor Standards Act set minimum wage and maximum basic hours for workers. The first minimum wage set was 25 cents an hour, except for farm and retail workers.
question
Under a(n) ______________ companies hire nonunion workers who are not required to join the union, but who must pay a special union fee.
answer
agency shop agreement The agency shop agreement is a situation where employers may hire nonunion workers who are not required to join the union but must pay a special union fee or pay regular union dues. Labor unions believe that such fees or dues are justified because the union represents all workers in collective bargaining, not just the union's members.
question
When negotiations appeared to be going in the wrong direction, a HVAC systems company and its union representatives agreed to bring in a(n) _______________. This expert would serve as a facilitator to get negotiations back on track; whereas, if a(n) ________ were solicited by both union and management, that person's decision would be binding.
answer
mediator; arbitrator A mediator acts as a facilitator whose purpose is to help both sides continue negotiating, by restating facts and making suggestions. An arbitrator is an expert in conflict resolution, whose decision is binding. Both union representation and management must agree to take the case to arbitration.
question
Lansing Distributors, Inc., a company that distributes a range of household products from manufacturers to retailers, was negotiating a new contract with its union employees who worked in the company's warehouses and drove its trucks. Union reps and management were willing to negotiate on 20 points, but the union wanted to discuss 2 other points that Lansing management did not want to make part of the employee contract. In this situation, the bargaining______________ constituted 20 options.
answer
zone Bargaining zone is the range of options between the initial and final offer that each party will consider before negotiations dissolve or reach an impasse.
question
Negotiations between union representatives and management came to a standstill at the Habit-You-Can-Live-With Seatbelt and Airbag Company. On the day employees went on strike, they were also asked to refrain from buying cars, vans, or trucks from any assembly plant that purchased Habit's seatbelts or airbags. The union was asking Habit's employees to participate in a(n) ___________.
answer
primary boycott A primary boycott occurs when employees are encouraged not to buy the products their employer sells.
question
A court-ordered ______________ was imposed on Fairlawn city employees that worked on streets and bridges. Although these employees agreed to strike for higher wages and benefits, the city asked the courts to order them back to work, to keep the streets free of ice and snow during the winter months.
answer
injunction An injunction is a court order directing someone to do something or to refrain from doing something. In the past, management has sought injunctions to order striking workers back to work, limit the number of pickets that can be used during a strike, or otherwise deal with actions that could be detrimental to the public welfare.
question
How would you characterize the popularity and power of today's unions?
answer
Across the board, union membership is significantly reduced, which decreases their future bargaining power. Unions today are at a crossroads. With dwindling membership, it will be more challenging to negotiate wages and even negotiate keeping wages where they are today.
question
CEO compensation that is awarded via stock options has become problematic because _____________.
answer
recent decreasing swings in stock prices lead to CEO buying opportunities which ultimately leads to a much higher percentage increase in compensation compared to other employees During the recent recession, CEOs were motivated to exercise their stock options and purchased company stock at an undervalued price. As the stock market recovered, they sold their stock and substantially increased their compensation. CEOs experienced percentage increases in pay that far outpaced their employees' salary increases.
question
A few years ago, a mid-level manager who was still completing her probationary period at a new job was called in by her direct supervisor for a first month evaluation. The conversation became rather unpleasant when the supervisor alluded to his disappointment that the new manager was not spending more time with him away from work, where they could get to know each other in a more intimate manner. In fact, he commented that such an effort might just solidify her continuing employment. The type of sexual harassment that the new manager was subjected to is called ___________.
answer
quid pro quo Quid pro quo sexual harassment refers to situations where employees are urged to submit to sexual conduct (either explicitly or implicitly) as a condition of employment, or as a condition of the employee's current or future opportunities at the place of business.
question
Companies are focusing attention on the social issue known as eldercare because it is ____________.
answer
decreasing productivity at work The National Alliance for Caregiving claims that companies lose an estimated $35 billion due to lower productivity and absenteeism due to employees care for aging family members.
question
The issue of subsidizing child care through one's employer is hotly debated. Those who oppose it ___________.
answer
complain that they will have to contribute to a benefit that they do not use One reason that childcare benefits continue to be a hotly debated issue with employees is that some employees do not want to pay for something when they receive no benefit.
question
****** Chapter 13 ****** Marketing is as much about helping sellers sell products and services, as it is about __________.
answer
helping buyers buy Marketing refers to a mutually beneficial exchange between buyers and sellers. The AMA (American Marketing Association) refers to marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
question
The idea behind marketing (known as the marketing concept) is ___________.
answer
a mutually beneficial exchange between buyers and sellers, where buyers receive quality products and good service, and sellers realize a profit The marketing concept is about a business committing to a product orientation, a service orientation, and a profit orientation.
question
Focusing on long-term customer loyalty is called ____________.
answer
customer relationship management Customer relationship management (CRM) is the process of learning as much as possible about customers and doing everything you can to satisfy them—or even exceed their expectations—with goods and services. The idea is to enhance customer satisfaction and stimulate long-term customer loyalty.
question
Mac and Zac want to start their own youth sports academy, to teach baseball skills to young boys. Which of the following steps in the marketing process is a good place to begin?
answer
Find out what young baseball players want to achieve. Before designing the product or service offerings, marketers must get to know as much as possible about the customer they will be serving. In this case, understanding young baseball players and their parents, and what they believe to be want satisfying needs as they learn the fundamentals of the game is very important.
question
As Mac and Zac explore the possibility of starting a youth sports academy, they collect demographic and lifestyle information about the families who would potentially buy their service. This exercise will help to better identify their ________.
answer
target market By conducting marketing research, including the collection of demographic and lifestyle information on those who will potentially come to the academy, the partners are closing in on the target market.
question
Once Mac and Zac have a better understanding of the kinds of baseball skills that local youth want to acquire, they can begin to prepare the ________________.
answer
marketing mix The Marketing Mix consists of designing the product, pricing the product, deciding where to place the product or service so people can buy it, and promoting the product or service.
question
Marketers constantly require good information if they are to meet or exceed their customers' expectations. When performing marketing research, Mac and Zac's first step is to ______________.
answer
determine the type of information (the question) they are seeking The basic steps in a marketing research activity are: (1) define the question and determine the present situation, (2) collect the research data, (3) analyze and interpret the data collected, and (4) choose the best solution and implement it.
question
Two baseball leagues in the city, where Mac and Zac plan to open a youth sports academy, agreed to allow Mac and Zac to distribute an email survey to their league players. In order to capture this opportunity, Mac quickly put together a set of 15 questions that inquire about the type of skills (batting, pitching, fielding, running) that league players want to develop. The survey and subsequent information this research would glean is called ________________ data.
answer
primary The survey method is one of the most common methods of primary data collection. Primary data is a new in-depth study that seeks answers to research questions. The questions asked are created by the researcher.
question
After one year of operating a youth sports academy in their hometown, Mac and Zac learned that several enthusiastic baseball players were driving to a larger town to receive similar services. In order to learn about the potential customers who were going elsewhere for service, Mac and Zac proceeded to scan the Internet to determine how competitors' services differed from theirs. They learned that competitors were open longer hours on weekends, and even had celebrity endorsements. The new information Mac and Zac collected, and its interpretation was the _______________ part of the marketing research process.
answer
analysis Marketers turn the data they collect in the marketing research process into useful information. This is part of the data analysis step in the research process.
question
Through environmental scanning, marketers can learn new ways to reach prospective customers. As they scan the _____________ environment, Mac and Zac hope to buy the most state-of-the-art mechanical arms for their youth sports academy. Recently, they learned about a robotic baseball player that stands at the plate. He can be programmed to change sizes. The big question for Mac and Zac is can they afford it; and if not, will their competitors decide to buy it?
answer
technological The technological environment is constantly changing. Businesses scan the technological environment for new products and services that may enhance how they serve the customer.
question
Recently, Mac and Zac's Youth Sports Academy has had several inquiries about girls' softball. While scanning the ____________ environment in their service area, Mac and Zac become aware of the growing importance of girls' sports, and particularly girls' softball. Girls' softball received a boost in the local market when the high school team won the state championship. Mac and Zac are seriously considering expanding their operation to include skill lessons for young girls.
answer
sociocultural Businesses monitor sociocultural trends to maintain close relationships with their customers.
question
Up until now, Mac and Zac's Youth Sports Academy has served the ____________ market. Just recently, the local high school contacted Mac and Zac's inquiring about practice space for boys' baseball and girls' softball during bad weather. If Mac and Zac negotiate a contract with the high school, they will also be serving the ___________ market.
answer
consumer; B2B B2B (Business to Business) market is one business selling to another business, institution, or organization.
question
Market segmentation is about dividing the total market for a product or service into groups with similar characteristics and needs. Marketers often divide the total market for their products and services demographically, either by age, education, or income level. If they wanted to know if all 18-year-olds in their market had similar TV show interests, their inquiry would also focus on _____________ segmentation.
answer
psychographic Psychographic segmentation refers to dividing the total market for a product or service into groups with similar interests, attitudes, and lifestyles.
question
Lauren is heading home from work and realizes she forgot to buy cat food during her lunch hour. As she navigates the traffic, she tries to decide where it will be most convenient to stop. She could go to the large discount store, which would give her the best price, but the lines are usually long after work. There are a couple of convenience stores on her route, but she isn't certain they will have her cat's brand. The grocery store is no better than the discount store after work. She settles on one of the drug store chains that also has just about everything. It is larger than the convenience stores, but never as crowded as the grocery store or discount store. In terms of consumer behavior, _____________ influences have guided Lauren's decision.
answer
situational Situational influences include physical surrounding or the type of purchase the consumer is interested in making.
question
Business to business (B2B) customers _________________.
answer
tend to be more rational in their decision making than individual consumers The B2B market is generally more rational and unemotional in their decision making.
question
****** Chapter 14 ****** One of the ways that restaurants adapt their product offerings to address changes in competition is ____________.
answer
develop new menu offerings Companies know that they must adapt their products to address changes in new competition and new markets.
question
Which of the following would be considered a convenience good?
answer
Candy bar Convenience goods and services are products that the consumer wants to purchase frequently and with a minimum of effort such as a candy bar.
question
Products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers are known as ____________ goods and services.
answer
shopping Shopping goods and services are products the consumer buys only after comparing the value, quality, price, and style from a variety of sellers.
question
Fountain of Youth Tea Company changed their glass bottles to streamlined thermos- like, blue sports bottles that fit nicely on bicycles and in car holders. A packaging innovation such as this is often perceived by the buyer as a _____________.
answer
new product Innovations in packaging and major changes in packaging can change the product in consumers' minds. This can include positioning the product as new in the eyes of the consumer.
question
New packaging technology that allows companies to track products through radio frequency identification is referred to as ____________.
answer
RFID Radio frequency identification (RFID) chips, when attached to products, send out signals telling a company where the products are at all times. The advantages of RFID chips over bar codes include that the chips can carry more information, that items don't have to be read one at a time, and that items can be read at a distance.
question
Priceline™ and Expedia™ are two online travel companies. Both are known to utilize ___________ of services such as "airline flights and hotel stays" to entice customers to purchase both at the same time, for a more reasonable price than what they would pay separately for each of these services.
answer
bundling Bundling combines goods and/or services for a single price.
question
A legally protected brand is a _______________.
answer
trademark A trademark is a legally protected brand.
question
A survey company used a dollar value to measure the ___________ of Ben and Jerry's Ice Cream, as compared to some of its worthy competitors. Essentially, the survey firm evaluated Ben and Jerry's by measuring net value of several components that would comprise the brand's perception and image to ice cream customers.
answer
brand equity Brand equity is the value of the brand, usually measured by a monetary amount.
question
GAP jeans are sold exclusively at GAP stores. This is an example of a(n) _________ brand.
answer
private Dealer (private-label) brands are products that don't carry the manufacturer's name but carry a distributor or retailer's name instead. They are usually contract manufactured. The contract manufacturer applies the retailers' label.
question
Differentiating your product so that it will appeal to additional market segments occurs most often at which stage of the product life cycle?
answer
Maturity When a product is in the maturity stage of the product life cycle, one strategy is to differentiate the product to satisfy a greater number of market segments.
question
Upscale retailers, such as Nordstrom's, feature customer service as their significant point of difference and use that difference to compete with less expensive stores. This is known as ___________ competition.
answer
nonprice Nonprice competition emphasizes product attributes other than price. Many larger companies often compete with superior service. This is the case with Nordstrom's.
question
Products that the consumer purchases which include insurance, burial services or emergency car-towing are known as ___________ goods and services.
answer
unsought Unsought goods and services are products the consumer is unaware of, hasn't necessarily thought of purchasing, or suddenly needs to solve an unexpected problem. These products include emergency car-towing services, burial services, and insurance.
question
Idea generation represents the first stage of _______________.
answer
new-product development The new-product development process has six steps. The first one is idea generation, based on consumer wants and needs.
question
Volvo is a well-known quality manufacturer of cars, trucks, and SUVs. Volvo dealers also provide financing to their customers. These products and services are part of Volvo's product _____________.
answer
mix Product mix is the combination of all product lines offered by a manufacturer. The cars, trucks, SUVs, and financing services that Volvo offers are the product lines that make up Volvo's product mix
question
The purpose of the product life cycle is it serves as a(n) __________.
answer
tool that tells the marketing manager if the product market is changing Different stages in the product life cycle call for different marketing strategies. The product life cycle can provide insight regarding future market changes. Usually, the marketing manager will re-evaluate the marketing mix.
question
****** Chapter 15 ****** The channel of distribution consists of ___________, who provide transportation and storage of goods as they are distributed from producers to ultimate consumers.
answer
marketing intermediaries Marketing intermediaries are firms that transport and store goods through a channel of distribution from producer to consumer.
question
About 80% of all wholesales are _______________. They typically are independent companies that take title to goods that they resell to retailers.
answer
merchant wholesalers Merchant wholesalers make up about 80% of all wholesalers. These independent companies alleviate risk to the producers by taking title to the goods before reselling them to retailers.
question
The movement of information and the movement of goods is a function of which of the following?
answer
Logistics Logistics is as much about the movement of information as it is about the movement of goods. Customer wants and needs must flow through the system all the way to suppliers and must do so in real time. Information must also flow down through the system with no hesitation.
question
Which utility is usually provided by producers rather than intermediaries?
answer
Form Traditionally, form utility is provided by producers rather than by intermediaries. It consists of taking raw materials and changing their form so that they become useful and marketable products.
question
As long as they do not __________, manufacturer's agents can represent several manufacturers in a specific territory.
answer
represent competing products Agents who represent producers are known as manufacturer's agents or sales agents. As long as they do not represent competing products, manufacturer's agents may represent one or several manufacturers in a specific territory.
question
When Fountain of Youth Tea Company strategized on how to distribute its product to customers, it elected to first start offering it through high-end grocery stores. The company essentially added ______________ utility to the distribution process.
answer
place Place utility refers to the strategy of distributing products to locations where it is convenient for customers to access and purchase.
question
A store that sells a huge variety of one type of product such as books, in order to dominate that category is called a category _________ store.
answer
killer Figure 15.5 of the text describes a category killer as a store that sells a huge variety of one type of product to dominate that category of goods. Office Depot is given as an example. Barnes and Noble is an example of a category killer store, specializing in the retail distribution of books and music.
question
You can find Coca-Cola products in discount stores, grocery stores, convenience stores, and even vending machines. Coca-Cola practices _______________ distribution with its product lines.
answer
intensive Intensive distribution puts products in as many retail outlets as possible.
question
When Beck's Bicycles, Inc., started its specialty bicycle business, it became the luxury brand of world famous bikers, who competed in world class races and were known to only pursue their sport using state-of-the-art equipment. The best distribution strategy for a brand with this image would be _________ distribution.
answer
exclusive Exclusive distribution strategy works for luxury brands. Producers of luxury brands usually select one distributor in a geographic area to sell its products.
question
Beck's Bicycles, Inc., purchases its wheels from a Southeast Asian company. The supplier sends the goods via ship, with the Port of Los Angeles as its destination. From there the wheels are shipped via rail to Chicago, Illinois, where they are loaded onto a truck for their final destination to Beck's assembly plant on the east coast. Beck's uses _________ shipping to transport its goods.
answer
intermodal Intermodal shipping is the use of multiple modes of transportation to complete a single long-distance movement of freight.
question
A convenience store is open seven days a week and remains open on holidays. The store provides its customers with _________ utility.
answer
time Time utility adds value to products by making them available when they're needed. Walmart and Walgreens accomplish this with stores that stay open 24 hours a day, most days of the year.
question
Now that so many goods are produced abroad, companies are finding that services such as ___________ provide important utility to the process of successfully processing products through customs and other legal requirements.
answer
web-based trade compliance systems Web-based trade compliance systems provide for goods to flow through customs and pass rigid scrutiny of government agencies such as the Food and Drug Administration.
question
Service utility is rapidly becoming the most important utility for many ________ as they face competition from direct marketing, such as the Internet or catalogs.
answer
retailers Service utility is the function of adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time. Service utility is rapidly becoming the most important utility for many retailers because without it they could lose business to direct marketing (e.g., marketing by catalog or on the Internet).
question
It is important for companies to build cooperative and transparent channel systems for moving goods, supplies, and services. Well-known fast food franchises usually set up _____________ systems, where individual franchise owners participate in channel cooperation through legal agreements.
answer
contractual Contractual distribution systems are channel systems that encourage cooperation among channel partners. Franchises are often set up as contractual systems where individual owners are bound by contract obligations to the parent company.
question
One of the fastest growing aspects of retailing is _________. Examples of firms that compete in this type of retailing are Lands End™ and L. L. Bean™, who both sell casual men's, women's, and children's clothing and accessories.
answer
direct marketing Examples of direct marketing are catalog sales and online retailers.
