27 terms

Management: Contemporary Business World

STUDY
PLAY

Terms in this set (...)

Business
Organization that provides goods or services to earn profits
Profits
Difference between a business's revenue and its expenses
External Environment
Consists of everything outside an organizations boundaries that might affect it.
Domestic Business Environment
Includes the climate, business policies, business facilities, business regulations and rules, logistics, political setup, style of governance, culture, traditions, belief system, economy, etc. of the country the business operates in.
Global Business Environment
The International factors that affect a business. These factors include Trade Agreements, International economic conditions, political unrest, & cultural barriers.
Technological Environment
Includes human knowledge, work environment, physical equipment, electronics, and telecommunications.
Political-Legal Environment
Deals with the relationship between business and government. Legal system defines what a company can and cannot do and control things such as hiring practices, local zoning requirements, & product identification laws. Government agencies also regulate things such as advertising laws & safety/health conditions.
Socio-Culture Environment
Customs, morals, values, and demographic characteristics of a society that a business operates in.
Economic Environment
Focuses on the conditions that exist in the economic system in which a company operates. When this is strong, jobs are growing and wages are higher.
Economic System
A nations system for allocating its resources among its citizens, both individuals and organizations.
Factors of Production
Resources that a country's businesses use to produce goods and services. They include entrepreneurship, natural resources, capital resources, and human resources.
Human Resources (Labor)
Physical or intellectual contributions people make while working
Capital Resources
Man-made resources used to produce other goods & services. Includes such things as money, equipment, buildings, and parts/supplies.
Entrepreneurship
Individual who accepts the risks and opportunities involved in creating and operating a new business.
Natural Resources
Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.
Planned Economy
Economy that relies on a centralized government to control all or most factors of production and to make all or most production decisions.
Market Economy
Economy in which individuals control production based off of supply and demand.
Communism
Political System in which the government owns and operates ALL factors of production.
Capitalism
Political System that allows for private ownership of the factors of production and encourages entrepreneurship.
Socialism
Planned economic system in which the government owns & operates only selected major sources of production. Examples of these sources include banking, transportation, telecommunication, or industries producing steel or oil.
Supply
The willingness and ability of a producer to offer goods & services
Demand
The willingness of consumers to purchase goods & services
Law of Demand
Buyers will purchase more of a product as its price drops & buy less of a product as its price increases.
Law of Supply
Producers will offer more of a product for sale as its price rises and less as its price drops.
Equilibrium Price
The price at which the quantity of goods demanded and the quantity of goods supplied are equal.
Surplus
Situation in which quantity supplied exceeds quantity demanded.
Shortage
Situation in which quantity demanded exceeds quantity supplied.