Management Ch. 5 – Flashcards

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Franchising
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Contract-based business arrangement between a manufacturer or other supplier, and a dealer
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Franchisee
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The individual or business firm purchasing a franchise
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Common Shares
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Shares that give owners voting rights but only residual claims to the firm's assets and income distributions
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Board of Directors
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Sets overall policy, authorizes the corporation's major transactions, and hires the chief executive officer
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Franchisor
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The firm whose products are sold to customers by the franchisee
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Sole Proprietorship
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A form of business ownership that is least subject to legal red tape
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Business Plan
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A formal document that details a company's goals, methods, and standards
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Business Development Back of Canada (BDC)
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Governmental agency that assists, councels, and protects the interests of small business in Canada
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Small Business
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Independent business with fewer than 100 employees and revenue less than 2 million
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Causes of small business failuer
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Management shortcomings, Inadequate financing, and government regulation
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Preferred stock
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Owners of ____ have limited voting rights, but are entitled to the earliest dividends
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Vertical merger
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Merger that combines firms operating at different levels in the production and marketing process
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Horizontal merger
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Merger that joins forms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines
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Conglomerate merger
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Merger that combines unrelated firms, usually with the goal of diversification, increasing sales, or spending a cash surplus to avoid a take over attempt
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Joint venture
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Partnership between companies for a specific activity
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Non-for-profit corportaion
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Organizations whose goals do no include pursuing a profit
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Shareholders
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Owners of a corporation as a result of their purchase of shares in the corporation
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Partnership
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An association of two or more persons who operate a business as co-owners by voluntary legal agreement
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Corpration
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The form of business ownership that establishes the firm as a separate legal entity
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Business incubator
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A local program designed to provide low-cost, shared business facilities to small start-up companies
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Venture capital
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Money invested in a business by another business or a group of individuals on return for an ownership share
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Merger
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An agreement in which two or more firms combine to form one company
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Acquisition
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An agreement when one firm purchases the property and consumes the obligations of another firm
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