Chapter 1 Explain the people and activities involved in business.

Owners put up the resources--money or credit--to start a business. Employees are responsible for the work that goes on within a business. Owners can manage the business themselves or hire managers to accomplish its tasks. A business's major role is to satisfy its customers. There are forces beyond an organization's control--such as legal and regulatory forces, the economy, competition, technology, social responsibility and ethics--all affect operations. Management involves coordinating employees' actions to achieve the firm's goals; organizing people to work efficiently; motivating them to achieve the business's goals; and acquiring, developing, and using resources effectively and efficiently. In essence, managers plan, organize, staff, and control the tasks required to carry out the work of the company. Marketing includes all the activities designed to provide goods and services that satisfy consumers' needs and wants. Marketers gather information to determine what customers want and then use promotion-advertising, personal selling, sales promotion, and publicity--to communicate the benefits and advantages of their products. Finance refers to activities concerned with obtaining money and using it effectively by the owners.

What are the three questions that an economic system must answer? o What goods and services, and how much of each, will satisfy consumers needs? Concerns allocation of resources among alternatives, i.e. the economy must allocate the varieties of goods and services which yield the greatest satisfaction to the consumers. o How will goods and services be produced, who will produce them, and with what resources will they be produced? This deals with utilizing the most efficient process to produce the goods and services. Production is said to be inefficient when it is possible to reallocate resources and, as a result, produce more of at least one good without producing less of any other good. o How are the goods and services to be distributed to consumers? The ideal distribution of goods and services is equal distribution among all members in the economy. However, in the real world this is never achieved.

Chapter 2 What are the 6 main ethical issues in business? o Misuse of company resources is the most commonly observed misconduct (Time theft, use of personal email and social networking sites at work is a growing problem, stealing office supplies, unauthorized use of equipment and software). o Abusive and intimidating behavior (spreading rumors, insults, discriminate by gender, race, or age). o Conflict of interest. Bribes represent a conflict of interest because they benefit an individual at the expense of an organization or society. o Fairness and honesty are at the heart of business ethics (How employees use resources; no deceit, coercion, or misrepresentation; fair competition; disclosure of potential harm caused by products). o Communications (false and misleading advertising, deceptive personal selling tactics, lying, and product labeling) o Business Relationships are relationships with customers, suppliers and co-workers (ethical behavior within a business is

important, keeping company secrets, meeting obligations and responsibilities, avoiding undue pressure). Managers have the responsibility to create ethical work environment and provide a positive example. Plagiarism--taking someone else's work and presenting it as your own--is another issue related to business relationship What are the 4 dimensions of social responsibility? o Voluntary Responsibilities (being a good corporate citizen; contributing to the community and quality of life) o Ethical Responsibilities (being ethical; doing what is right, just, and fair; avoiding harm) o Legal Responsibilities (obeying the law societys codification of right and wrong ; playing by the rules of the game) o Economic Responsibilities (being profitable) Chapter 3 What are some social and cultural barriers in international business? o Cultural differences include differences in spoken and written language (true meaning misinterpreted and lost) o Differences in body language (nonverbal through gestures, posture, and facial expressions) and personal space (distance at which a person feels comfortable) o Family Roles also influence marketing activities (alcohol Muslim countries) o Perception of time (business meeting late) o Religious holidays and local costumes of the host country (Islamic countries breaks while working to pray) o Metric system (lack of uniformity creates problems for both buyers and sellers in the international marketplace) What are the differences between balance of trade and balance of payments? Balance of trade: The difference in value between a nations exports and its imports. A nation that exports more than it imports has a favorable balance of trade. Because the United States imports more products than it exports, it has a negative balance of trade, or trade deficit. The trade deficit

fluctuates according to such factors as the health of the United States and other economies, productivity, perceived quality, and exchange rates. Trade deficits may contribute to the failure of businesses, the loss of jobs, and a lowered standard of living. Balance of payment: The difference between the flow of money into and out of a country and includes: o Countrys balance of trade o Foreign investments o Foreign aid o Foreign loans o Military expenditures o Money spent by tourists When a country has a trade deficit, more money flows out of the country than into it. If more money flows out of the country than into it from tourism and other sources, the country may experience declining production and higher unemployment, because there is less money available for spending. Chapter 4 What are the difference forms of ownership and how are they used?

What are the differences between preferred stock and common stock? Preferred stock: A special type of stock whose owners, though not generally having a say in running the company, have a claim to profits before other stockholders do. Common stock: Stock whose owners have voting rights in the corporation, yet do not receive preferential treatment regarding dividends.

Chapter 5 Advantages and disadvantages of a small business Disadvantages High stress level - Multitasking results in long hours

Advantages Independence - Being your own boss - Dont fit the corporate mold - Freedom to choose whom they work with. - Work at home Costs - Less money to start and maintain - Family volunteers to work to save money Flexibility - Adapt to changing market demands - Develop and introduce a new product in a shorter time Focus - Efforts in a defined market niche - Avoid competition from larger firms, helping them to grow into stronger companies Reputation - Quality and service

High failure rate 50% of all new businesses fail within the first 5 years - Poor business concept - Burdens imposed by government regulation - Undercapitalization Lack of funds to operate normally Seasonal variations in sales which make cash tight and few businesses make money from the start. - Managerial inexperience or incompetence No knowledge or experience to manage a growing business effectively

- Inability to cope with growth Growth often requires the owner to give up a certain amount of direct authority

What is the undercapitalization for a small business?

Undercapitalization: the lack of funds to operate a business normally. It is important for the success or failure of a small business in order to have a good cash flow.

Chapter 6 What are the 5 functions of management? o Planning: Determining the organizations objectives and deciding how to achieve them. o Organizing: Structuring of resources and activities to accomplish objectives in an efficient and effective manner. o Staffing: Hiring qualified people to carry out the work of the organization. o Directing: Motivating and leading employees to achieve organizational objectives. o Controlling: Evaluating and correcting activities to keep the organization on course. What is the systematic 6 step approach in the decision making process? o Recognize and define the decision situation which may be either positive or negative. The situation must be carefully defined before management can make a decision. o Develop options, both standard and creative. As a general rule, more time and expertise are devoted to the development stage of decision making when the decision is of major importance. o Analyze options involves analyzing the practicality and appropriateness of each option. Management should consider both the consequences of each option and whether the options adequately address the decision situation. o Select the best option from among the list of options. This is often a subjective process because many situations do not lend themselves to mathematical analysis. o Implement the decision. Effective implementation requires planning. Additionally, management should anticipate resistance from people within the organization and be ready to deal with unexpected consequences. o Monitor de consequences Did the decision accomplish the desired result? If not, management must analyze the situation to find out if the decision was the wrong one, if the situation changed, or if some other option should be implemented. The decision situation may have been incorrectly defined, or the results may not have had time to show up.

Chapter 7 What is organizational culture and how is it expressed? Organizational culture is a firms shared values, beliefs, traditions, philosophies, rules, and role models for behavior. A firms culture may be expressed formally through its mission statement, codes of ethics, memos, manuals, and ceremonies, but it is commonly expressed informally by including dress codes, work habits, extracurricular activities, and stories. Explain how teamwork and communication delegates tasks and responsibilities. Delegation of authority is the process of giving employees not only tasks, but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks. Delegation gives a responsibility, or obligation, on employees to carry out assigned tasks satisfactorily and be held accountable for the proper execution of work. The principle of accountability means that employees who accept an assignment and the authority to carry it out are answerable to a superior for the outcome. Chapter 8 Assess the importance of quality in operations management. Controlling quality is another critical element in production and operations management because defective products can harm a firm. Quality reflects the degree to which a good or service meets the demands and requirements of customers. Determining quality can be difficult because it depends on customers' perceptions of how well the product meets or exceeds their expectations. Quality control refers to the processes an organization uses to maintain its established quality standards. Companies employing total quality management (TQM) programs know that quality control must be incorporated throughout the transformation process, from the initial plans to develop a specific product through the facility planning stages to the actual manufacture of the product. One method through which many companies have tried to improve quality is statistical process control, a system in which management

collects and analyzes information about the production process to pinpoint quality problems in the production system. Manufacturing and service-providing firms must set product specifications and quality standards. ISO 9000 is a series of quality assurance standards designed to ensure consistent product quality under many conditions. What is sustainability and how does it impact in manufacturing? Pressure has increased for manufacturing and production systems to reduce waste and improve sustainability. Consumers prefer to purchase goods that were manufactured in an environmentallyfriendly facility. Sustainability deals with reducing the consumption of resources and the long-term well-being of the planet, including natural entities and the interactions of individuals, organizations, and businesses. Chapter 9 List Maslows hierarchy of needs Maslow's hierarchy shows the order in which people strive to satisfy these needs. Abraham Maslow theorized that humans have five basic needs: o Self-Actualization implies being the best that one can be. o Esteem Needs relate to self-respect and respect from others. o Social Needs the need for love, companionship, and friendship--the desire for acceptance by others. o Security Needs the need to protect oneself from physical and economic harm. o Physiological Needs the most basic and first needs to be satisfied, are the essentials for living--water, food, shelter, and clothing. Maslow's theory maintains that the more basic needs at the bottom of the hierarchy must be satisfied before higher-level goals are pursued. It also suggests that employees will be motivated to contribute to organizational goals only if they are able first to satisfy their physiological, security, and social needs through their work.

Explain the motivation process. A person who recognizes or feels a need is motivated to take action to satisfy the need and achieve a goal. When a need exists, an individual engages in goal-directed behavior designed to satisfy that need. Human relations is concerned with the needs of employees, their goals and how they try to achieve them, and the impact of those needs and goals on job performance.

Chapter 10 What are the primary characteristics of diversity? o o o o o o Sexual orientation Age Gender Race Ethnicity Abilities

What are the differences between job description and job specification? Job description: a formal, written explanation of a specific job, usually including job title, tasks, and relationship with other jobs, physical and mental skills required duties, responsibilities, and working conditions. Job specification: a description of the qualifications necessary for a specific job, in terms of education, experience, and personal and physical characteristics.

Chapter 11 Explain the marketing concept and its implications for developing marketing strategies. Marketing concept is the idea than an organization should try to satisfy customers needs through coordinated activities that also allow it to achieve its own goals. The marketing concept suggests that a business should find out what consumers need and want, develop the product that fulfills those needs or wants, and then get the products to the customer. Although customer satisfaction is the goal of the marketing concept, a company must also achieve its own objectives, such as boosting productivity, reducing costs, or achieving a percentage of a specific market. Relationship marketing is the process of building intimate customer interactions to maximize customer satisfaction. The goal of relationship marketing is to satisfy customers so well that they become loyal, committed to sharing information, and rely on the business. Briefly describe the evolution of the marketing concept from the Industrial Revolution to the 21st century. o Production Orientation 19th Century Manufacturing efficiency: New technologies with new management ideas and ways of using labor made products poured into the marketplace, where demand for manufactured goods was strong. o Sales Orientation Early 20th Century Supply exceeds demand; a need to sell products exists. Sales were the primary means of increasing profits and the most important activities were personal selling and advertising. o Market Orientation 1950s An approach requiring organizations to gather information about customer needs, share information across the firm and use information to build long-term relationships with customers First determine what customers want New technologies are helping to improve communication and are helping companies learn what customers want

Chapter 12 What is the product development process? To introduce a new product, a business generally follows a multistep process: o Idea generation: New ideas can come from marketing research engineers, and outside sources such as advertising agencies, management consultants, or customers. o Product screening: Marketers look at the organization's resources and objectives; assess their ability to produce and market the product; and consider consumer desires, competition, technological changes, social trends, and political, economic, and environmental considerations. o Concept testing o Business analysis is a basic assessment of a product's compatibility in the marketplace and its potential profitability. o Product development: The idea is developed into a prototype, and various elements of the marketing mix are developed for testing. o Testing marketing is a trial mini launch of a product in limited areas that represent the potential market, allowing a complete test of the marketing strategy in a natural o Commercialization is the full introduction of a complete marketing strategy and the launch of the product for commercial success. What are a push strategy and a pull strategy? Push strategy: An attempt to motivate intermediaries to push the product down to their customers. Pull strategy: the use of promotion to create consumer demand for a product so that consumers exert pressure on marketing channel members to make it available.

Chapter 13 What are the 4 legal and social issues in Internet marketing? o Privacy: Shopping on the Internet allows companies to better track consumers (cookies). Laws and regulations cannot keep up with the rapidly-changing Internet. o Identity theft occurs when criminals obtain personal information that allows them to impersonate someone else in order to access financial accounts and make purchases. o Online fraud includes any attempt to conduct fraudulent activities online. Cybercriminals are increasingly using online social networking sites and other digital media to commit fraud (charities and collect donations). o Intellectual property can include songs, movies, books, electronics, software, etc. It is generally protected by patents and copyrights. What element of the marketing mix is best adaptable for digital media? Promotion is one of the best applications for digital media. Thanks to online promotion, consumers can be informed by reading customer-generated content before making purchasing decisions. Consumer consumption patterns are changing and marketers must react and give consumers what they want. Chapter 14 Whats the accounting equation? = Liabilities + Owners Equity The difference between a firms assets and its liabilities and reflects historical values

Assets A firm's economic resources or items of value that it owns such as cash, inventory, land, equipment, buildings, and other tangible and intangible things.

A firms debts and obligations

The relationship between assets, liabilities and owners equity

What are the differences between certified public accountant (CPA) and certified management accountants (CMA)? Certified public accountant (CPA): An individual who has been state certified to provide accounting services to the public (individuals or firms) for a fee ranging from the preparation of financial records and the filling of tax returns to complex audits of corporate financial records. Certified management accountants (CMAs) can be CPAs and may become private accountants, CMAs, by passing a rigorous examination by the Institute of Management Accountants, so CPAs have some managerial responsibility.

Chapter 15 What are the tools for regulating the money supply?

What is a mutual fund? Mutual fund is an investment company that pools individual investor dollars and invests them in large numbers of well diversified securities. A special type of mutual fund called a money market fund invests specifically in short-term debt securities issued by governments and large corporations.

Chapter 16 What is the chief goal of financial managers? The chief goal of financial managers who focus on current assets and liabilities is to maximize the return to the business on: o Cash: A crucial element in financial management is effectively managing the firm's cash flow, the movement of money through the organization on a daily, weekly, monthly, or yearly basis. o Temporary investments of idle cash: If cash comes in faster than it is needed to pay bills, businesses can invest the cash surplus for periods as short as one day or for as long as one year, until it is needed. o Accounts receivable: Many businesses make the vast majority of their sales on credit. o Inventory: The financial manager has to coordinate inventory purchases to manage cash flows. The object is to minimize the firm's investment in inventory. What are the types of bonds? o Unsecure bonds: debentures, or bonds that are not backed by specific collateral and there are the most common type. o Secured bonds: bonds that are backed by specific collateral that must be forfeited in the event that the issuing firm defaults. o Serial bonds: a sequence of small bond issues of progressively longer maturity. o Floating-rate bonds: bonds with interest rates that change with current interest rates otherwise available in the economy. o Junk bonds: a special type of high-interest-rate bond that carries higher inherent risks.