General Management Exam Review - NOCTI
Terms in this set (257)
the process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources
a management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives
a management function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organizations goals and objectives
creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organizations goals and objectives
a management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not
an encompassing explanation of why the organization exists and where it's trying to head
an outline of the fundamental purpose of an organization
the broad, long term accomplishments an organization wishes to attain
specific, short term statements detailing how to achieve the organizations goals
SWOT = Strengths, Weaknesses, Opportunities and Threats; a planning tool used to analyze an organizations strengths, weakness, opportunities and threats
the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals
the process of developing detailed, short term statements about what is to be done, who is to do it, and how it is to be done
the process of setting work standards and schedules necessary to implement the company's tactical objectives
the process of preparing alternative courses of action that may be used if the primary plans don't achieve the organizations objectives
choosing among two or more alternatives
the process of solving the everyday problems that occur. problem solving is less formal than decision making and usually calls for quicker action
coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas
PMI = Pluses, Minuses, Implications; listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column
a visual device that shows relationships among people and divides the organizatins work; it shows who is accountable for the completion of specific work and who reports to whom
highest level of management, consisting of the president and other key company executives who develop strategic plans
the level of management that includes general managers, dividsion managers, and branch and plant managers who are responsible for tactical planning and controlling
managers who are directly responsible for supervising workers and evaluating their daily performance
skills that involve the ability to perform tasks in a specific discipline or department
human relations skills
skills that involve communication and motivation; they enable managers to work through and with people
skills that involve the ability to picture the organization as a whole and the relationship among its various parts
a management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives
leadership style that involves making managerial decisions without consulting others
participative (democratic) leadership
leadership style that consists of managers and employees working together to make decisions
leadership style that invovles managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives
finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm
dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own personal use
individuals and units within the firm that receive services from other individuals or units
amounts of money
the difference between revenue and expenses
books in which financial records are written
a summary of all the financial data in the account ledgers that ensures the figures are correct and balanced
a yearly statement of the financial condition, progress, and expectations of an organization.
profit and loss account
a financial statement showing revenue, expenditure and profit during a given period
the P&L account begins with...
total sales (=revenue) generated during a month, quarter or year
the P&L account ends with...
earnings (= profit / the bottom line)
cost of goods sold (COGS)
manufacturing costs, wages of blue-collar workers, transport costs etc.
salaries of sales and office staff, marketing costs, rent etc.= overheads
profits from investments in other companies
Earnings before Interest, Taxes, Depreciation and Amortization
the loss in value of a tangable asset (e.g. a vehicle)
the loss in value of an intangible asset (e.g. the purchase of a licence or trademark)
a financial statement that reports assets, liabilities, and owner's equity on a specific date
the basic equation that has to balance is:
Assets = Liabilities + Shareholders´ equity
anything of value owned by a business
any amount owed to a creditor
the shareolder's claims on a company's assets after all of its creditors have been paid
current assets or short-term assets
items that can or will be converted into cash within one year; may also include marketable securities
shares (stocks) and bonds
fixed assets or long-term assets
items that are relatively permanent, such as land, buildings, and equipment
long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value
customers´ approval and support of a business (reputation, contacts and expertise of companies that have been bought)
current liabilities or short-term liabilities
borrowed money (bank debt, money owed to suppliers, unpaid salaries and bills) that must be repaid within 12 months
financial obligations that will take the business more than one year to repay.
the difference between current assets and current liabilities
loan capital including also any overdraft (temporary negative balance)
money an organization owes to its vendors and suppliers.
taxes built up over time, unpaid taxes
salaries paid for after the service has been performed, typically includes future bonuses
the value of raw materials and stock
part of a building that cannot be moved, such as lights; personal property so securely attached to real estate that it becomes part of the real estate
a long-term bank loan to purchase a home or other real estate
a loan for fixed period of time with fixed interest rate
amounts set aside for anticipated one-time payments that are not part of regular operations - perhaps a lawsuit, or a compensationpackage for employees being laid off
reserves, the amount of profit which is kept back by a business for future investment
cash flow statement
a financial statement that shows the flow of money in and out of the business; it shows the real cash that is available to keep the business running
causes of cash flow problems
late payments and non-payments, unforeseen costs, unexpected changes in demand, over-borrowing from the bank to finance expansion plans
solutions for managing cash flow
credit control, stock control, expenditure control, marketing initiatives, using an outside company to recover a debt
using an outside company to recover debts, obtaining funding by selling account receivable
funds raised through various forms of borrowing that must be repaid (e.g. trade credit, bank loan, issuing bonds)
money raised from within the firm, from operations or through the sale of ownership in the firm (e.g. reinvested earnings, sale of assets, issue of new shares)
issues in financial management
cost centres, profit centres, variance analysis, costing methods (standard versus marginal costing), valuing assets
measure the ability to turn assets into cash to pay short-term depts
measure the company's ability to generate profits
leverage (debt) ratios
measure the degree to which a firm relies on borrowed funds in its operations
measure the effectiveness of the use of resources from an operational point of view
finance and organizational structure
CFO (.........................................................) is on the Board. 3 senior managers below report to CFO:
T (..........................) and CAO (...................................)
financial controller (is responsible for)
planning, monitoring (comparing planned spending with actual spending), producing financial data for the senior management team, analysing major financial decisions
treasurer is (responsible for)
managing cash flow and raising new funds
chief accounting officer (is responsible for)
keeping the company´s books, preparing financial statements, preparing tax returns, developing strategies to minimize taxes
the information system that identifies, records, and communicates the economic events of an organization to interested users (majandusarvestus)
the phase of accounting concerned with providing information to stockholders, creditors, and others outside the organization (finantsarvestus)
the activity of recording business transactions (raamatupidamine)
the commercial processes involved in promoting and selling and distributing a product or service
channel of distribution that buys goods from wholesalers or directly from manufacturers and resells them to the final consumer.
Obtain goods from manufacturers and resell them to industrial users, other wholesalers and retailers.
pay for something
the exchange of goods for an agreed sum of money
the marketing function of moving goods
marketing function of holding goods so they're available when they're needed
Budgeting for marketing activities,obtaining the necessary funds needed for operations,and providing financial assistance to customers so they can purchase the business products and service.
Studying buyer interests and needs, testing products, and gathering facts needed to make good marketing decisions
bearing the uncertainties that are part of the marketing process
grading and valuing
grouping goods according to size, quality, or other characteristics, and determining appropriate price for products and services
An approach to business that centers on capturing business by focusing on creating and manufacturing better products at lower prices.
Companies emphasized widespread distribution and promotion in order to sell products and services
describes a firm in which all decisions are made with a conscious awareness of their effect on the consumer.
the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives
the world of commercial activity where goods and services are bought and sold
research that gathers and analyzes information about the moving of good or services from producer to consumer
Identified segments of the market that a business wants to have as their customers.
The blending of four marketing elements-product, distribution, price, and promotion
an artifact that has been created by someone or some process
the high value or worth of something
Shipping and transportation, delivery to customers.
encouragement of the progress or growth or acceptance of something
A written document that acts as a guidebook of marketing activities for the marketing manager
product life cycle
Four stages that product goes through over its life: introduction, growth, maturity, and decline.
the product life-cycle stage in which the new product is first distributed and made available for purchase.
The product life cycle stage in which sales rise rapidly
The product life cycle stage in which sales peak and then increase at a slower rate or start to decline
The product life-cycle stage in which a product's sales decline
physical products purchased by companies to produce other products
goods (as food or clothing) intended for direct use or consumption
Inexpensive products that are purchased regularly and require little time and effort for purchase decisions.
Items purchased after comparing prices and features.
goods that are not mass-produced but rather assembled individually or in small quantities
items that the consumer either does not know about or knows about but does not initially want
is money a business earns above and beyond the money that it spends for salaries and other expensses
Is the chance an entrepreneur takes of losig time and money on a business that may not prov profitable
Customers, employees, stockholders, suppliers,dealers, bankers, media, people in the local community, enviromentalists, elected govt officials
Advantages of Entrepreneuship
Freedom to make their own decisions, more opportuinity, and possible wealth
Disadvantages of Entreprenurship
Entreprenurship risk time and money to start and manage a business. they lose benefits as to working for another company or person
How govt. reduces risk for starting a business
allow private ownership, pass laws that enable contracts and ability to enforece in court, establish a world wide trade currency, lessen coruption in business and govt. keep taxes and regulations to a min.
Technology benefit workers, business, consumer
workers to be more effective efficient and productive
study of how society chooses to employ resources, and distribute them for consumption among competeing groups and individuals
2 branches of economics
Macroeconomics micro economics
studies the operation of a nation's economy as a whole
studies the behavior of people and organizations in a particular market
study of how to increase resources and create the conditions that will make better use of them
how does capitalism create a climate for economic growt?
business people dont often deliberately set out to help others; they mostly work for their own prosperity and growth
the economy grows and prosper through the efforts of improving their own sitiuation in life
is an economic system in which all or most of hte means of production and distribution are privately owned and operated for profit.
Who decides to produce under capitalism
business decide what to produce, how much to pay workers, how much to charge for goods and services
basic rights under capitalism
Right to Private Property, Right to own a business and to keep that business profit after taxes, freedom of competition, and right to freedom of choice
How does the Free Market work?
buyers and sellers negotiate prices for goods and services influence the decsions about what gets produced and in what quantities.
is an economic system base on the premise that some business should be owned by the governemnt
Advantages of Socialism
creats more social equity. workers receive more education, health care, fewer work hours, longer vacations
Disadvantage of Socialism
lowers incentive to start a business or to work hard higher unemployment rate and slower growth rate
Socialism differ from communism
communism the government owns almost all major production facilities and dictates what gets produced and by whome
is part capitalist and part socialist, business privately owned but taxes are high and income is redistributed
Gross domestic product
is the total value of final goods and services prodecud in a country in a given year
refers to the % of civilians at least 16 years old who are unemployed and tried to find a job within 4 weeks
consumer price index
measures changes in the prices of about 400 goods and services that consumers buy
what are the 4 phases of business cycles
economic boom, recession, a depression, recovery
when two or more quarters show declines in the GDP, prices fall, people purchase fewer products, businesses fail
increase government spending and cut taxes in order to stimulate the economy when the economy is in a recession.
consists of government efforts to keep economy stable by increasing or decreasing taxes or government spending
the management of the moey supply and interest rates
importance of monetary policy
when unemployment gets too high, the federal reserve bank may put more money into the economy and lower interest rates
Why should nations trade with other nations?
no country is self-sufficient, other countries need products that propersous countries can provide, natural resources and technological skills are not distributed evenly around the world
theory of comparative advantage?
contends that a country should make and then sell those products it produces most efficiently but buy those it cannot producs as efficiently
that a country has a monopoly on a certain product or can produce the product more efficiently than any other country. there are few examples of absolute advantage
what kind of products can be imported and exported?
any kind of product
selling products to other countries
buying products from other countries
Balance of trade
is the relationship of exports to imports
Balance of payments
is the balance of trade plus other money flows such as tourism and foreign aid
selling products for less ina foreign country than in your own country
Ways a company can engage in global business
licensing, exporting, franchising, contract maufacturing, joint ventures, strategiv alliances, direct foreign investment
multinational corporations differ from other cmompanies that particiapte in global business
M.C's have manufacturing facilities or other physical presence abroad
Forces that can discourage particiaption in global business
sociocultural forces economic and financial force, legal refulatory forces, physical and enviromental forces
use of goverment regulations to limit the import of goods and services
taxes on foreign products
Prohibits the importing or exporting of certain products
Off shore outsourcing?
is the purchase of goods and services from outside a firm rather than progiding them inside the company
Why major conern?
many jobs int he US will be lost due to offshore outsourving and that the quality of products produced could be inferior
refers only to laws written to protect people from fraud, theft, and violence
abiding by the moral standards accepted by society. reflects people's proper relationships with one another
How to tell if business decisions are ethical?
is it legal? it is balanced? how will it make me feel?
Managements role in setting ehtical standards?
management tolerance of intolerance of eithical misconduct influences employees more than any written ethics coes
Complaince based eithcs
concerned with avoiding legal pinsihsment,
Integrity based codes
define the organiations guiding values
Corporate social respobsibility
the concern business have for society
How do businesses demonstrate corporate responsibility
staisfy customers with goods and services, make money for its investors, creat jobs for employees, mus create new wealth for society
companys social respobsibility measuerd
add together the ogranizations positive actions and then subtract the negative effects to get a net social benefit
Ethical Behavior in global marks
making sure suppliers do not violate Human rights and envirolmental standards
A philosophy, an attitude, a perspective, or a management orientation that stresses customer satisfaction, An organizational activity, set of institutions, and processes.
people giving up something in order to receive something they would rather have.
conditions for an exchange
1. at least two parties, 2. each party has something of value to the other party,3. each part is capable of communication and delivery, 4. each party is free to accept or reject, 5.
customers' evaluation of a good or service in terms of whether it has met their needs and expectations
The relationship between benefits and the sacrifice necessary to obtain those benefits
the delegation of power and authority to subordinates
a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase product; it is synonymous with the marketing concept
the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives
a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace
a strategy that focuses on keeping and improving relationships with current customers
the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits
social marketing orientation
the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests
in the portfolio matrix, a business unit that generates more cash than it needs to maintain its market share
A set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition
cost competitive advantage
being the low-cost competitor in an industry while maintaining satisfactory profit margins
A strategy of increasing sales by introducing new products into new markets
searching the environment for important events or issues that might affect an organization
curves that show costs declining at a predictable rate as experience with a product increases
the process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan's objectives
a marketing strategy that entails attracting new customers to existing products
market opportunity analysis
The description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments.
a marketing strategy that tries to increase market share among existing customers
a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization
Product, Price, Place, Promotion
the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
a statement of what is to be accomplished through marketing activities
a written document that acts as a guidebook of marketing activities for the marketing manager
a company's plan that identifies how it will use marketing to achieve its goals
Niche Competitive Advantage
the advantage achieved when a firm seeks to target and effectively serve a small segment of the market
a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate
in the portfolio matrix, a business unit that shows rapid growth but poor profit margins
a marketing strategy that entails the creation of new products for present markets
strategic business unit
strategic business unit, a subgroup of a single business or collection of related businesses within the larger organization
The process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities
sustainable competitive advantage
an advantage that cannot be copied by the competition
A comparison of strengths, weaknesses, opportunities, and threats that helps executives formulate strategy.
code of ethics
Principles of conduct within an organization that guide decision making and behavior.
corporate social responsibility
business's concern for society's welfare
foreign corrupt practices act
U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.
marketing efforts to produce, promote, and reclaim environmentally sensitive products
pyramid of corporate social responsibility
a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure
cause related marketing
Commercial activity in which businesses and charities form a partnership to market an image, a product, or a service for their mutual benefit; a type of promotional campaign
scientific study that aims to solve practical problems
Pure science that aims to increase the scientific knowledge base
the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle
consumer product safety
The Consumer Product Safety Commission (CPSC) researches product safety, maintains a clearinghouse of information on the risks associated with various products, sets standards for product safety, and may ban the manufacture and sale of products it deems to be unduly hazardous to consumers
the use of demographic information to help a company properly segment and target the market for products.
When a company implements strategies that attempt to shape the external environment within which it operates
the generation following the baby boom (especially Americans and Canadians born in the 1960s and 1970s)
People born between 1979 and 1994
an increase in the overall level of prices in the economy
the ability to purchase goods and services, a comparison of income versus the relative cost of a set standard of goods and services in different geographic areas
An economic slowdown of the economy which results in rising unemployment, increased business failures, declining economic growth and higher personal bankruptcies.
a specific group of consumers that have similar wants and needs
buyer for export
An intermediary in the global market that assumes all ownership risks and sells globally for its own account
using more capital than labor in the production process
Central American Free Trade Agreement
private-label manufacturing by a foreign company
the practice of using barter rather than money for making global sales
direct foreign investment
a method of investment in which a company builds a new business or buys an existing business in a foreign country
Selling goods abroad at a price below that charged in the domestic market
An intermediary that acts like a manufacturer's agent for the exporter; the export agent lives in the foreign market
An intermediary who plays the traditional broker's role by bringing buyer and seller together
General Agreement on Tariffs and Trade
global marketing standardization
Production of uniform products that can be sold the same way all over the world
Marketing that targets markets throughout the world
group of twenty
a forum for international economic development that promotes discussion between industrial and emerging-market countries on key issues related to global economic stability
international monetary fund
a United Nations agency to promote trade by increasing the exchange stability of the major currencies
sending U.S. jobs abroad
an agreement between two or more companies to share a business project
The largest latin american trade agreement; includes Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, and Uruguay
An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management
North American Free Trade Agreement
an agreement to dramatically lower trade barriers worldwide; created the World Trade Organization
a United Nations agency created to assist developing nations by loans guaranteed by member governments
World Trade Organization