Chapter
Summary of Learning Outcomes
From IntroductionToBusiness OP 8D04gAa
Concepts
- What do structural unemployment, supply, supply curves, technology, and the unemployment rate mean?
"Structural unemployment is unemployment that is caused by a mismatch between available jobs and the skills of available workers in an industry or region; not related to the business cycle. Supply is
- How do businesses and not-for-profit organizations help create our standard of living?
"Businesses attempt to earn a profit by providing goods and services desired by their customers. Not-for-profit organizations, though not striving for a profit, still deliver many needed services for
- What are the sectors of the business environment, and how do changes in them influence business decisions?
"The external business environment consists of economic, political and legal, demographic, social, competitive, global, and technological sectors. Managers must understand how the environment is chang
- What sectors make up the business environment, and how do they influence business decisions?
"The external business environment consists of economic, political and legal, demographic, social, competitive, global, and technological sectors. Managers must understand how the environment is chang
- What are the primary features of economic systems, and how are the sectors of the U.S. economy linked?
"Economics is the study of how individuals, businesses, and governments use scarce resources to produce and distribute goods and services. Today there is a global trend toward capitalism. Capitalism,
- How do macroeconomic and microeconomic forces shape economic activity, employment, prices, and markets?
"structural unemployment Unemployment that is caused by a mismatch between available jobs and the skills of available workers in an industry or region; not related to the business cycle. supply The qu
- How can organizations encourage ethical business behavior?
"Top management must shape the ethical culture of the organization. They should lead by example, offer ethics-training programs, and establish a formal code of ethics."
- What is corporate social responsibility?
"Corporate social responsibility is the concern of businesses for the welfare of society as a whole. It consists of obligations beyond just making a profit and goes beyond what is required by law or u
- What philosophies and concepts shape personal ethical standards?
"Ethics is a set of moral standards for judging whether something is right or wrong. A utilitarianism approach to setting personal ethical standards focuses on the consequences of an action taken by a
- What is corporate social responsibility and how can businesses practice it?
"Corporate social responsibility is the concern of businesses for the welfare of society as a whole. It consists of obligations beyond just making a profit and goes beyond what is required by law or u
- What key terms describe international trade and global commerce?
"licensing Mercosur multinational corporations nationalism North American Free Trade Agreement (NAFTA) outsourcing preferential tariff principle of comparative advantage protectionism protective tarif
- Why is global trade important to the United States, and how is it measured?
"International trade improves relations with friends and allies, eases tensions among nations, helps bolster economies, raises people’s standard of living, and improves the quality of life. The United
- Why do nations trade?
"Nations trade because they gain by doing so. The principle of comparative advantage states that each country"
- Why do nations trade, and what barriers can restrict international trade?
"Nations trade because they gain by doing so. The principle of comparative advantage states that each country should specialize in the goods it can produce most readily and cheaply and trade them for
- How do governments, economic communities, and companies participate in the global marketplace?
"The World Trade Organization, established by the Uruguay Round of trade negotiations, has dramatically lowered trade barriers worldwide. For the first time, a trade agreement covers services, intelle
- What threats and opportunities exist for multinational corporations in the global marketplace?
"Domestic firms entering the international arena need to consider the politics, economies, and culture of the countries where they plan to do business. For example, government trade policies can be lo
- What are the advantages and disadvantages of sole proprietorships?
"4.1 Going It Alone: Sole Proprietorships 1. What are the advantages and disadvantages of the sole proprietorship form of business organization? The advantages of sole proprietorships include ease and
- What are the advantages and risks of operating as a partnership?
"4.2 Partnerships: Sharing the Load 2. What are the advantages of operating as a partnership, and what downside risks should partners consider? The advantages of partnerships include ease of formation
- How does the corporate structure provide advantages and disadvantages to a company?
"4.3 Corporations: Limiting Your Liability 3. How does the corporate structure provide advantages and disadvantages to a company, and what are the major types of corporations? A corporation is a legal
- What other specialized forms of business organization are available?
"4.4 Specialized Forms of Business Organization 4. What other options for business organization does a company have in addition to sole proprietorships, partnerships, and corporations? S corporation:
- What are the advantages and disadvantages of sole proprietorships and partnerships?
"A business that is established, owned, operated, and often financed by one person. The advantages of sole proprietorships include ease and low cost of formation, the owner’s rights to all profits, th
- How do corporations and specialized business organizations structure ownership and liability?
"A corporation is a legal entity chartered by a state. Its organizational structure includes stockholders who own the corporation, a board of directors elected by the stockholders to govern the firm,
- Why is franchising an appropriate form of business organization for some companies?
"Franchising is one of the fastest-growing forms of business ownership. It involves an agreement between a franchisor, the supplier of goods or services, and a franchisee, an individual or company tha
- Why are mergers, acquisitions, and changing ownership trends important to business growth?
"In a merger, two companies combine to form one company. In an acquisition, one company or investor group buys another. Companies merge for strategic reasons to improve overall performance of the merg
- What key terms describe entrepreneurship and business financing?
"angel investors business plan debt entrepreneurs equity intrapreneurs small business Small Business Administration (SBA) Small Business Investment Company (SBIC) venture capital Key Terms Individual
- Why do people become entrepreneurs, and what types of entrepreneurs exist?
"5.1 Entrepreneurship Today 1. Why do people become entrepreneurs, and what are the different types of entrepreneurs? Entrepreneurs are innovators who take the risk of starting and managing a business
- What characteristics do successful entrepreneurs share?
"5.2 Characteristics of Successful Entrepreneurs 2. What characteristics do successful entrepreneurs share? Successful entrepreneurs are ambitious, independent, self-confident, creative, energetic, pa
- How do small businesses contribute to the U.S. economy?
"5.3 Small Business: Driving America's Growth 3. How do small businesses contribute to the U.S. economy? Chapter 5 Entrepreneurship: Starting and Managing Your Own Business 203"
- Why do people become entrepreneurs, and what makes them successful?
"5.1 Entrepreneurship Today\n\n1. Why do people become entrepreneurs, and what are the different types of entrepreneurs? Entrepreneurs are innovators who take the risk of starting and managing a busin
- How do small businesses contribute to the economy and what challenges do their owners face?
"5.3 Small Business: Driving America's Growth\n\n3. How do small businesses contribute to the U.S. economy? Small businesses play an important role in the economy. They account for over 99 percent of
- How does the Small Business Administration help small businesses?
"5.7 The Small Business Administration\n\n7. How does the Small Business Administration help small businesses? The Small Business Administration is the main federal agency serving small businesses. It
- What trends are shaping entrepreneurship and small-business ownership?
"5.8 Trends in Entrepreneurship and Small-Business Ownership\n\n8. What trends are shaping entrepreneurship and small-business ownership? Changes in demographics, society, and technology are shaping t
- What is the role of management?
"Management is the process of guiding the development, maintenance, and allocation of resources to attain organizational goals. Managers are the people in the organization responsible for developing a
- What are the four types of planning?
"Planning is deciding what needs to be done, identifying when and how it will be done, and determining who should do it. Managers use four different types of planning: strategic, tactical, operational
- How do leadership styles and sources of power influence behavior?
"The ability to influence others to behave in a particular way is power. Leaders who share decision-making with group members and encourage discussion of issues and alternatives include democratic, co
- What distinguishes programmed and nonprogrammed decisions and different management levels?
"Programmed decisions are made in response to frequently occurring routine situations. Nonprogrammed decisions are responses to infrequent, unforeseen, or very unusual problems and opportunities where
- What are the role of management and the four types of planning?
"nonprogrammed decisions operational planning organizing participative leaders planning power programmed decisions referent power reward power situational leadership strategic planning supervisory (fi
- How do managers organize, lead, and control organizational activities?
"6.3 Organizing 3. What are the primary functions of managers in organizing activities? Organizing involves coordinating and allocating a firm’s resources in order to carry out its plans. It includes
- What managerial roles and skills are necessary for success?
"6.6 Managerial Roles 6. What roles do managers take on in different organizational settings? In an informational role, the manager may act as an information gatherer, an information distributor, or a
- What trends will affect management and leadership in the future?
"6.8 Trends in Management and Leadership 8. What trends will affect management in the future? Three important trends in management today are preparing for crises management, the increasing use of info
- What are the basic elements of an organizational structure?
"The order and design of relationships within a firm; consists of two or more people working together with a common objective and clarity of purpose. A visual representation of the structured relation
- What are the traditional forms of organizational structure?
"Firms typically use traditional, contemporary, or team-based approaches when designing their organizational structure. In the traditional approach, companies first divide the work into separate jobs
- What contemporary and team-based organizational structures are companies using?
"In recent decades, companies have begun to expand beyond traditional departmentalization methods and use matrix, committee, and team-based structures. Matrix structures combine two types of tradition
- How are traditional organizational structures and departments designed?
"organization organization chart problem-solving teams process departmentalization product departmentalization reengineering self-managed work teams span of control specialization staff positions virt
- What contemporary and team-based structures are organizations using?
"7.2 Contemporary Structures 2. What contemporary organizational structures are companies using? In recent decades, companies have begun to expand beyond traditional departmentalization methods and us
- How do organizations establish authority and distribute decision-making power?
"7.4 Authority—Establishing Organizational Relationships 4. What tools do companies use to establish relationships within their organizations? The managerial hierarchy (or the management pyramid ) com
- How do mechanistic, organic, and informal organizations differ?
"7.6 Organizational Design Considerations 6. How do mechanistic and organic organizations differ? A mechanistic organization is characterized by a relatively high degree of work specialization, rigid
- What terms describe recruitment, labor relations, and employee development?
"recruitment recruitment branding right-to-work law selection selection interview selective strike strategy shop steward simulation succession planning training and development unemployment compensati
- What is the human resource management process, and how are human resource needs determined?
"Summary of Learning Outcomes 8.1 Achieving High Performance through Human Resources Management 1. What is the human resource management process, and how are human resource needs determined? The human
- How do firms recruit applicants?
"8.2 Employee Recruitment 2. How do firms recruit applicants? When a job vacancy occurs, most firms begin by trying to fill the job from within the ranks of their own employees, known as the internal
- How do firms select qualified applicants?
"8.3 Employee Selection 3. How do firms select qualified applicants?"
- How do organizations plan for, recruit, and select human resources?
"recruitment recruitment branding right-to-work law selection selection interview selective strike strategy shop steward simulation succession planning training and development unemployment compensati
- How do organizations develop, evaluate, and compensate employees?
"Activities that provide learning situations in which an employee acquires additional knowledge or skills to increase job performance. Government payment to unemployed former workers. Pay for lost wor
- How do labor unions, collective bargaining, and grievance procedures shape labor relations?
"A labor union is an organization that represents workers in dealing with management over disputes involving wages, hours, and working conditions. A company is unionized through an organizing drive th
- What laws, agencies, and workplace trends affect human resource management?
"A number of federal laws affect human resource management. Federal law prohibits discrimination based on age, race, gender, color, national origin, religion, or disability. The Americans with Disabil
- What are the basic principles of Frederick Taylor’s scientific management?
"Scientific management is based on the belief that employees are motivated by economic incentives and that there is “one best way” to perform any job. The four basic principles of scientific managemen
- What did Elton Mayo’s Hawthorne studies reveal about worker motivation?
"The pride that comes from special attention motivates workers to increase their productivity. Supervisors who allow employees to have some control over their situation appeared to further increase th
- What is Maslow’s hierarchy of needs, and how do these needs relate to employee motivation?
"Maslow believed that each individual has a hierarchy of needs, consisting of physiological, safety, social, esteem, and self-actualization needs. Managers who accept Maslow’s ideas attempt to increas
- How are McGregor’s Theories X and Y and Ouchi’s Theory Z used to explain worker motivation?
"Douglas McGregor influenced the study of motivation with his formulation of two contrasting sets of assumptions about human nature—designated Theory X and Theory Y. Theory X says people don’t like to
- What are the basic components of Herzberg’s motivator-hygiene theory?
"Frederick Herzberg’s studies indicated that certain job factors are consistently related to employee job"
- What is Maslow’s hierarchy of needs, and how does it relate to employee motivation?
"Maslow believed that each individual has a hierarchy of needs, consisting of physiological, safety, social, esteem, and self-actualization needs. Managers who accept Maslow’s ideas attempt to increas
- How do McGregor’s Theories X and Y and Ouchi’s Theory Z explain worker motivation?
"Douglas McGregor influenced the study of motivation with his formulation of two contrasting sets of assumptions about human nature—designated Theory X and Theory Y. Theory X says people don’t like to
- What quality, operations, and supply-chain terms are essential to world-class operations management?
"Quality control: The process of creating quality standards, producing goods that meet them, and measuring finished goods and services against them. Robotics: The technology involved in designing, con
- Why is production and operations management important in both manufacturing and service firms?
"Summary of Learning Outcomes 10.1 Production and Operations Management—An Overview 1. Why is production and operations management important in both manufacturing and service firms? In the 1980s, many
- What types of production processes do manufacturers and service firms use?
"10.2 The Production Process: How Do We Make It? 2. What types of production processes do manufacturers and service firms use? Products are made using one of three types of production processes. In ma
- How do organizations decide where to put their production facilities and design the facility?
"10.3 Location, Location, Location: Where Do We Make It? 3. How do organizations decide where to put their production facilities? What choices must be made in designing the facility? Site selection af
- Why are production and operations management important to manufacturing and service firms?
"10.1 Production and Operations Management—An Overview 1. Why is production and operations management important in both manufacturing and service firms? In the 1980s, many U.S. manufacturers lost cust
- How do firms plan resources, route work, and schedule production?
"The aspect of production control that involves setting out the work flow—the sequence of machines and operations through which the product or service progresses from start to finish. The aspect of pr
- How do quality management and lean manufacturing improve operations?
"The process of creating quality standards, producing goods that meet them, and measuring finished goods and services against them. A quality-control process that relies on defining what needs to be d
- How do technology and automation transform manufacturing and service operations?
"The technology involved in designing, constructing, and operating computer-controlled machines that can perform tasks independently. 10.7 Transforming the Factory Floor with Technology 7. What roles
- What is the marketing concept and how does relationship-building support it?
"Marketing includes those business activities that are designed to satisfy consumer needs and wants through the exchange process. Marketing managers use the “right” principle—getting the right goods o
- How do managers create a marketing strategy?
"A firm creates a marketing strategy by understanding the external environment, defining the target market, determining a competitive advantage, and developing a marketing mix. Environmental scanning
- What is the marketing mix and how do product and market distinctions affect marketing?
"To carry out the marketing strategy, firms create a marketing mix—a blend of products, distribution (place) systems, prices, promotion, and people. Marketing managers use this mix to satisfy target c
- How do consumers and organizations make buying decisions?
"Buyer behavior is what consumers and businesses do in order to buy and use products. The consumer purchase decision-making process consists of the following steps: recognizing a need, seeking informa
- What are the marketing concept, relationship marketing, and marketing strategy?
"Marketing includes those business activities that are designed to satisfy consumer needs and wants through the exchange process. Marketing managers use the “right” principle—getting the right goods o
- How do consumers, organizations, and researchers make buying decisions?
"Buyer behavior is what consumers and businesses do in order to buy and use products. The consumer purchase decision-making process consists of the following steps: recognizing a need, seeking informa
- What are the main forms of market segmentation and product classification?
"Success in marketing depends on understanding the target market. One technique used to identify a target market is market segmentation. The five basic forms of segmentation are demographic (populatio
- How are new products developed, tested, introduced, and priced?
"To succeed, most firms must continue to design new products to satisfy changing customer demands. But new-product development can be risky. Many new products fail. The steps in new-product developmen
- What are reach, sales promotion, sales prospects, and social media?
"Reach is the number of different target consumers who are exposed to a commercial at least once during a specific period, usually four weeks. Sales promotion consists of marketing events or sales eff
- What is the nature and function of distribution?
"Distribution (place) includes the efficient managing of the acquisition of raw materials by the factory and the movement of products from the producer or manufacturer to business-to-business users an
- What is wholesaling, and what are the types of wholesalers?
"Retailers are firms that sell goods to consumers and to industrial users for their own consumption. Wholesalers are firms that sell finished goods to retailers, manufacturers, and institutions. Whole
- What are the different kinds of retail operations and how can supply-chain management improve efficiency?
"Some 15 million Americans are engaged in retailing. Retailing can be either in-store or nonstore. In-store retail operations include department stores, specialty stores, discount stores, off-price re
- What is the nature and function of distribution and wholesaling?
"Distribution (place) includes the efficient managing of the acquisition of raw materials by the factory and the movement of products from the producer or manufacturer to business-to-business users an
- What are the different kinds of retail operations and how does supply-chain management improve performance?
"Some 15 million Americans are engaged in retailing. Retailing can be either in-store or nonstore. In-store retail operations include department stores, specialty stores, discount stores, off-price re
- What is promotion and what are the key elements of a promotional mix?
"Promotion aims to stimulate demand for a company’s goods or services. Promotional strategy is designed to inform, persuade, or remind target audiences about those products. The goals of promotion are
- How do advertising, personal selling, sales promotion, and public relations support marketing goals?
"Cost per contact is the cost of reaching one member of the target market. Often costs are expressed on a cost per thousand basis. Reach is the number of different target customers who are exposed to
- How has information technology transformed business and managerial decision-making?
"Businesses depend on information technology for everything from running daily operations to making strategic decisions. Companies must have management information systems that gather, analyze, and di
- Why are computer networks an important part of today’s information technology systems?
"Today companies use networks of linked computers that share data and expensive hardware to improve operating efficiency. Types of networks include local area networks, wide area networks, and wireles
- What types of systems make up a typical company’s management information system?
"A management information system consists of a transaction processing system, management support systems, and an office automation system. The transaction processing system collects and organizes oper
- What financial statements measure a firm’s revenues, expenses, profits, and cash flows?
"An income statement is a financial statement that summarizes a firm’s revenues and expenses and shows its total profit or loss over a period of time. Net loss is the amount obtained by subtracting al
- How do liabilities, owners’ equity, and working capital describe a firm’s financial position?
"Liabilities are what a firm owes to its creditors; also called debts. Long-term liabilities are claims that come due more than one year after the date of the balance sheet. Owners’ equity is the tota
- What ratios measure liquidity, inventory efficiency, profitability, and returns to owners?
"Liquidity ratios are ratios that measure a firm’s ability to pay its short-term debts as they come due. The inventory turnover ratio is the ratio of cost of goods sold to average inventory; measures
- How do accountants and regulations support financial information and business decisions?
"Managerial accounting is accounting that provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations. Operating exp
- Why are financial reports and accounting information important, and who uses them?
"Accounting involves collecting, recording, classifying, summarizing, reporting, and analyzing a firm’s financial activities according to a standard set of procedures. The financial reports resulting
- How do public and private accountants differ, and how has federal legislation affected their work?
"Public accountants work for independent firms that provide accounting services—such as financial report preparation and auditing, tax return preparation, and management consulting—to other organizati
- What are the six steps in the accounting cycle?
"The accounting cycle refers to the process of generating financial statements. It begins with analyzing business transactions, recording them in journals, and posting them to ledgers. Ledger totals a
- How do financial statements and ratios reveal a firm’s financial condition and performance?
"The balance sheet represents the financial condition of a firm at one moment in time, in terms of assets, liabilities, and owners’ equity. The key categories of assets are current assets, fixed asset
- What is money and what functions does it serve?
"Money is anything that is acceptable as payment for goods and services. For money to be a suitable means of exchange, it should be scarce, durable, portable, and divisible. Money functions as a mediu
- What types of financial institutions help move funds through the economy?
"Financial intermediation is the process in which financial institutions act as intermediaries between the suppliers and demanders of funds. Commercial banks are profit-oriented financial institutions
- What is the Federal Reserve System and how does it influence the economy?
"The Federal Reserve System, or Fed, is the central bank of the United States and consists of 12 district banks, each located in a major U.S. city. The discount rate is the interest rate that the Fede
- How are deposits in banks and thrift institutions protected?
"The Federal Deposit Insurance Corporation (FDIC) is an independent, quasi-public corporation backed by the full faith and credit of the U.S. government that insures deposits in commercial banks and t
- What is money, and what are its characteristics, functions, and forms?
"Money is anything that is acceptable as payment for goods and services. For money to be a suitable means of exchange, it should be scarce, durable, portable, and divisible. Money functions as a mediu
- How do financial institutions and the Federal Reserve support financial intermediation?
"An operating license issued to a bank by the federal government or a state government; required for a commercial bank to do business. Profit-oriented financial institutions that accept deposits, make
- How does the Federal Reserve regulate money and credit?
"The interest rate that the Federal Reserve charges its member banks. The purchase or sale of U.S. government bonds by the Federal Reserve to stimulate or slow down the economy. Requires banks that ar
- What are common securities and securities markets?
"Municipal bonds are bonds issued by states, cities, counties, and other state and local government agencies. A mutual fund is a financial-service company that pools investors’ funds to buy a selectio
- How do financing, risk, and returns affect financial decisions?
"The principal is the amount borrowed by the issuer of a bond, also called par value. Retained earnings are profits that have been reinvested in a firm. Return is the opportunity for profit. A revolvi
- What are common securities, loans, and business financing terms?
"Secured loans are loans for which the borrower is required to pledge specific assets as collateral, or security. Securities are investment certificates issued by corporations or governments that repr
- How does the financial manager support the firm’s overall strategy?
"Finance involves managing the firm’s money. The financial manager must decide how much money is needed and when, how best to use the available funds, and how to get the required financing. The financ
- How do finance and financial managers guide a firm’s strategy and spending?
"16.1 The Role of Finance and the Financial Manager 1. How do finance and the financial manager affect the firm’s overall strategy? Finance involves managing the firm’s money. The financial manager mu
- What are the main sources of short-term and long-term business financing?
"16.3 Obtaining Short-Term Financing 3. What are the main sources and costs of unsecured and secured short-term financing? Short-term financing comes due within one year. The main sources of unsecured
- How do firms raise money through equity financing?
"16.5 Equity Financing 5. When and how do firms issue equity, and what are the costs? The chief sources of equity financing are common stock, retained earnings, and preferred stock. The cost of sellin
- How do securities markets help firms raise funding and enable investors to trade?
"16.6 Securities Markets 6. How do securities markets help firms raise funding, and what securities trade in the capital markets? Securities markets allow stocks, bonds, and other securities to be bou