someone who is willing to assume the responsibility, risk and rewards of starting and operating a business
..., focusing all marketing decisions on a very specific group of people who you want to reach.
a type of thinking that is associated with creativity - seeing lots of solutions to a problem
A written plan that identifies a problem to be solved, its criteria, and its constraints.
is the use of geometrical primitives such as points, lines, curves, and shapes or polygon
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another
The ownership of intangible and non-physical goods. This includes ideas, names, designs, symbols, artwork, writings, and other creations.
Expenses incurred to decide whether to go into business and which business to enter can be expensed
up to $5,000; the balance is amortized over a period of 180 months. If the start-up expenses exceed $50,000, the immediate deduction is reduced dollar for dollar, until no deduction after $55,000.
the process of starting, organizing, managing, and assuming the responsibility for a business. The foundation of the free market economy. Create diverse product market.
Basic Organization Structure
function, product, market, customer, location. Division of labor, structure for making decisions. Goal: Maintain efficiency in business.
Span of Management - too many immediate subordinates to be effective. Job assignments unclear.
Functional Management Structure
Divides the parts of the business by what they do. Production, Acctg, marketing, etc.
operations are spread out over a variety of areas each operating independently
functional and product structures - both financial and production oversee a project
managerial decisions are imposed on subordinates and management has greater responsibility; little communication overall on the hierarchy; Employees very dependent on jobs and exploited by management. Ineffective
managerial assumption that management acts in the best interest of the workers; little communication overall on the hierarchy; Management patronizing and fail to take into account employees feelings. Ineffective
small degree of trust in employees by management; all employees feel some responsibility for the overall success of the company, there is some degree of teamwork and freedom to act on minor issues among employees. But management handles larger issues and does not trust lower level employees with important manners.
most effective. Managers have trust in subordinates because every employee is well trained and competent. Motivation by reward not punishment.
owned and operated by one person. Suffer from limited sources of capital, high risk. Do not have to pay income taxes on profits, only personal income.
distinct and viable entity. Ownership of a corporation is held by individuals who own shares of corporation's stock. Individual shareholders are not responsible for the actions of the corporation-just lose initial investment. Employees cannot be prosecuted for the acts of the corporation at large. Attract solid managers, manipulate/influences govt policy to suit their ends.
Stockholders elect the members of a board of directors who oversee the operations of the corporation. Real power held by management group not stockholders who cooperate with a few major stockholders to ensure they remain in power.
permission given by stockholders to someone else to manage the stockholder's interest in the corporation.
Advantages of Corporations
ownership of corporations is easily transferable and it rarely has any effect on the daily operations of the business.
Disadvantages of corporations
double taxation; company taxed as legal entity and shareholders must pay income taxes on dividends.
business owned and operated by two or more principals for the purpose of making a profit. Jointly provide capital and labor in exchange for shared profit or loss. No govt permission is required for a partnership, business affairs do not have to be shared beyond partners., as a business form is not required to pay income taxes. Disadvantages: unstable, hard to dissolve if one partner is found to be incompetent.
small group of individuals or smaller groups that join together to achieve some common goals. Example: credit unions, retail consumer groups, residential organizations, and marketing associations.
Board of directors
selects upper level management including the CEO and supervises strategy and financial objectives.
assess the business' current status, anticipate trends in the market and consider the financial implications of proposed plans. Planning is impossible without good records from the acctg department.
Steps to Business planning
1. Becoming aware of an opportunity or problem. 2. Define a clear and verifiable objective. 3. Develop the premises of their future plans - forecasting changes in market, assessing population growth and changes in price level. 4. Consider the various means of getting the job done, weigh alternatives. 5. Selecting a course of action. 6.Develop the supporting plans for the great plan to be completed.
statements of purpose that will define the way a business goes about achieving its goals. A successful set of policies set limits to business activity and encourage initiative.
Overall plans that take into consideration such external factors as trends in the marketplace or actions of the competitors. Course of action.
Business rules and programs
things that employees are either required to do or are forbidden from doing.
Open Market operations
government purchasing and selling of government securities (bonds) to affect the size of the money supply (to increase, buys securities)
centralized national bank, established by the National Monetary Commission in 1908 via the Federal Reserve Act in 1913, bank of private banks. Consists of the Board of Governors, Fed Open Market Committee, 12 Federal Reserve banks and the various banks and advisory committees.
Interstate commerce commission ICC
established in 1887 by Interstate Commerce Act. Regulates rates that carriers charge and oversees any mergers, acquisitions and sales of carriers.
Sum of 4 components of aggregate demand: net exports-.exports less imports, consumption -.total spent on durable goods, non durable goods and services, investment and federal/state/local government purchases. Excludes net income from foreign sources -.that included is GNP.
Cost push inflation
increases in the cost of production lead to supply shortages across the economy, leading to an increase in prices.
Economic situation in which GDP is on the decline for 3 quarters. Leads to falling prices which can lead to a depression. Can sometimes lead to an increase in prices which is known as stagflation.
State of a market in which there are a number of firms selling the identical product at the same price. No one firm has control over the market.
a market structure in which many companies sell products that are similar but not identical
economics; a market in which control over the supply of a commodity is in the hands of a small number of producers and each one can influence prices and affect competitors
exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices
the desire and ability to sell a particular good at a particular price within a given time period.
Relationship between supply and demand
demand curve slopes such that a greater quantity is being demanded when the price is lower.
Law of Diminishing Returns
If one aspect of production is increased while all the others remain at the same level, the overall return will decrease after a certain point
huge numbers of people entering and leaving the job market at any time. Time between being unemployed and finding a job.
changes in industry result in a mismatch between jobs available and the skills possessed by workers.
unemployment that rises during economic downturns and falls when the economy improves
the ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than other producers.
Basic equation of accounting
Assets = sum of liabilities and capital.
Total Value of ownership = assets less liabilities
when a partnership or person owns a business, this ownership is registered as net worth, capital or proprietorship. When a business has borrowed funds in order to sustain operations, claims to the lenders are known as liabilities. Taxes on property are also a liability.
Sales, net sales
total amount of goods sold in a period - considered final when delivered. Net sales = sales less returns, damaged goods and discounts.
Cost of goods sold
the total cost of buying raw materials and paying for all the factors that go into producing finished goods; Does not include things like office expenses, shipping or advertising.
Inventory Turnover ratio
A ratio that measures the liquidity of inventory by measuring the number of times average inventory sold during the period; computed by dividing cost of goods sold by the average inventory during the period.
Total Marketing concept
The idea that a business must organize itself so that the marketing department has the resources to attract new customers. Marketing activities account for about 1/3 to 1/4 of the workforce.
Combination of tools used by marketing program to promote a certain product to market. Includes product mix, distribution mix, communication mix and the service mix.
the exclusive, legal right of a person to reproduce, publish, and sell his or her own literary, musical, or artistic creations
a name, symbol, or other device identifying a product; it is officialy registered with the U.S. government and its use is legally restricted to its owner
When marketing executives attempt to remove the threat of competition by marketing their product to an exclusive portion of the population.
Phases of Marketing
(1) Marketing executives research the market in an attempt to determine exactly what goods and services customers are looking to buy. (2) Company attempts to provide the product to the public at the appropriate time,place,and price.
Physical Distribution management
Transfer of goods from producer to customer. Main goals: maximize level of customer service and minimize cost to company.
inventory accounting in which the most recently acquired items are assumed to be the first sold; method is supposed to create the lowest ending inventory in a period of rising prices. Also create a lower taxable income, lower gross profit.
inventory accounting in which the oldest items (those first acquired) are assumed to be the first sold; creates a higher ending inventory and lower cost of goods sold, higher gross profit and higher taxable income.
A measure of the sensitivity of demand to changes in price. Calculated by dividing the percent change in quantity demanded by the percent change in price.
Enables students to enter the marketplace with a more sophisticated understanding of how to spend their money.
Consumer finance companies
Small companies that loan money for basically any purpose at a high interest rate.
All commercial banks in the US are owned by private individuals thru the purchase of common stock.
Federal Deposit Insurance Corporation: A federal guarantee of savings bank deposits initially of up to $2500, raised to $5000 in 1934, and frequently thereafter; continues today with a limit of $250,000
A system under which the government guarantees that depositors will not lose any money even if their bank goes bankrupt.
depository institution originally set up to serve small savers overlooked by commercial banks
Savings and loan association
a thrift institution that is required by law to make a certain percentage of its loans as home mortgages
Life Insurance companies
Large holders of individual savings; assets of life insurance company are earned by selling policies for much more money than the likely cost of death benefits to be paid out at the time they are sold. Insurance companies typically invest their assets in corporate stock, corporate stock bonds and home mortgages.
Commercial finance companies
purchase the accounts receivable of a business at a discount but seller pays if default. Make loans on business inventory or machinery and equipment. Charge higher rates that commercial banks due to higher risk involved.
Factoring and Commercial Finance
Factoring companies purchase accounts receivable from businesses at a discount also but take the loss if the accounts receivable is unpaid.
Leasing advantages and disadvantages
More expensive to lease because companies pay for interest and depreciation on equipment. Leasing costs are tax deductible and there is less up front cost layout, less commitment to assets.
Represents ownership in a publicly held company which entitles owners to dividends (if declared by the company's Board of Directors), voting rights on matters affecting the company, and in the elections of Boards members.
Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold
Long-term debt issued by private corporations typically paying semi-annual coupons and returning the face value of the bond at maturity
Types of bonds
Mortgage bond; property on bond;, Collateral trust bond; stocks and bonds held from other companies are held as security of repayment; Debenture; assets and earnings of company offered as repayment;
Financial institutions that assist firms in the process of issuing securities to investors. Investment banks also advise firms engaged in mergers and acquisitions, and they are active in the business of selling and trading securities in secondary markets.
Employ market analysts to research firms to find strengths and weaknesses of businesses looking for financial investors. Almost all investment banks operate as brokers. Charge a commission on purchases and sales.
A marketplace where member brokers who represent investors meet to buy and sell securities. NYSE.
Security exchange members
4 types: commission brokers, registered traders, odd-lot dealers, those who focus on own behalf.
Price earnings ratio
Ratio between the market price of a stock and the profits per share over the last year. To compute the Price -Earnings ratio, divide the earnings into the market price of stock.
people buying on the margins--paying cash for some and using credit for the remainder of the purchase. Problem: people cannot pay off their credit
Stock market that experiences a general decline in prices of stock. Not all stocks experience a decline in value, but most do.
Stock market experiences a general rise in prices and stock trading volume for shares over a period of time.
a written contract with a promise to pay a supplier a specific sum of money at a definite time
identify, consider and make the most efficient defense against various types of risk.
4 main categories of employee rights
collective bargaining, working hours and pay, workplace safety, discrimination in the workplace.
Human resource accounting
A process designed to measure the present cost and value of human resources as well as their future worth to the organization.
Applications for employment
Application forms cannot inquire about age, marital status, arrest records, gender, religion, citizenship or nationality.
Statute of Frauds
State law requires certain instruments, such as deeds, real estate sales contracts and certain leases, to be in writing to be legally enforceable
A trade agreement between Canada, the United States and Mexico that encourages free trade between these North American countries.
rate of return on bonds
Yield is a figure that shows the return you get on a bond. The simplest version of yield is calculated using the following formula: yield = coupon amount divided by price. When you buy a bond at par, yield is equal to the interest rate. When the price changes, so does the yield.
converting foreign exchange rates
This report promulgates exchange rate information pursuant to Section 613 of Public Law 87-195 dated September 4, 1961 (22 USC 2363 (b)) which grants the Secretary of the Treasury sole authority to establish for all foreign currencies or credits the exchange rates at which such currencies are to be reported by all agencies of the government. The primary purpose is to ensure that foreign currency reports prepared by agencies shall be consistent with regularly published Treasury foreign currency reports as to amounts stated in foreign currency units and U.S. dollar equivalents.
National environmental policy 1967
is a United States environmental law that established a U.S. national policy promoting the enhancement of the environment and also established the President's Council on Environmental Quality
A division of shares of a company into a larger number of shares. A 2 for 1 split allows a shareholder to double the number of shares but worth one half of their previous value.
M0: In some countries, such as the United Kingdom, M0 includes bank reserves, so M0 is referred to as the monetary base, or narrow money.
is referred to as the monetary base or total currency; This is the base from which other forms of money like checking deposits are created and is traditionally the most liquid measure of the money supply
narrowest measure of the money supply that includes all coins and paper bills in circulation, traveler's checks, checking account balances, and balances in credit unions
All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits.
measure of the money supply Example. M2 plus deposits at institutions that are not banks such as savings and loan associations
Money Zero Maturity; A definition of the money supply that includes monetary balances immediately available at zero cost to households and businesses for making transactions. Equals M2 minus small time deposits plus money market mutual fund balances owned by businesses.
Delta Pi Epsilon
a national graduate honorary society for professionals who support and promote scholarship, leadership, and cooperation toward advancement of education for and about business. Established in 1936 at New York University.
Marketing Education Association
The national Marketing Education Association is an organization of educators and business people committed to the career development of youth and adults in the area of marketing, management and entrepreneurship
The Association of Career and Technical Educators
The Association of Career and Technical Educators (ACTE) is the largest national education association dedicated to the advancement of education that prepares youth and adults for careers. Its mission is to provide education leadership in developing a competitive workforce. ACTE works full-time on legislative issues to make sure career and technical education programs are adequately funded and that their members get all they need to make the most of their professional abilities
American Vocational Association
The Business Education Division of ACTE is a diverse, broad-based group dedicated to educating today's students for tomorrow's business community. The skills taught in business education programs include keyboarding, database management, office management, accounting, and communications.
DECA, a national association of marketing education students, provides teachers and members with educational and leadership development activities to merge with the education classroom instructional program. DECA chapters attract students who are interested in preparing for entrepreneurial, marketing, or management careers. Working hand-in-hand with the education and business communities, DECA's goal is for its student members to develop a "career success kit" to carry into their business and personal lives after graduation.
International Society for Technology in Education
A nonprofit professional organization that focuses on improving teaching and learning through effective integration of technology in pre k-12 and teacher education.
Opportunities for students to consider different careers and industries, learn basic workplace behavior, develop specific skills within an industry, and apply academic and occupational skills in the workplace.
School Based Enterprises
An effective educational tool in helping to prepare students for the transition from school to work or college. For many students, they provide the first work experience; for others, they provide an opportunity to build management, supervision and leadership skills.
Allows the student the opportunity to observe and participate in activities related to a career field; supervised by school personnel and related to the student's career choice. May be paid or unpaid
Relationship with an experienced person, the mentor, who advises and helps a less experienced person, a protégée. Mentors are role models
a program that allows students to enhance classroom learning with part-time work related to their majors and interests
A short-term experience that allows the student to follow an experienced worker and see the day-to-day activities of a particular career.
Marketing is defined by the American Marketing Association as "the activity, set of institutions, for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
what are the four goals of business communication
receiver understanding, receiver response, favorable relationship, organizational goodwill
can be positive or negative; with words, actions or both. achieve this by replying to the message
organizational good will
needs to reflect positive on the company's products, services, and personnel
the line in which the communication purpose might change. people might omit or add to a story
flows between a business organization and the things that it interacts with. (customers, suppliers, competitors, media, or gov) can be formal or informal
the communication process model includes what?
sender, message, receiver, feedback, & communication barriers
select the type of message, analyze the receiver, using the you viewpoint, encourage feedback, & remove communication barriers
listening and reading carefully, being open to different types of senders and new ideas, making notes when necessary, providing appropriate feedback to the sender, asking questions to clarify the message
any other meaning a word suggests to a receiver based on his or her experiences, interests, attitudes, and emotions. (can result in slang or sarcasm)
what are the six principles of word selection?
choose understandable words, be specific, choose strong words, emphasize positive words, avoid overused words
what are the four principles of effective sentences?
unity, short sentences, active voices, appropriate emphasis
what are the five principles of making good paragraphs?
keep them short, unity, organize them logically, appropriate emphasis, coherence
how does a short paragraph help the reader?
helps the reader organize their thoughts, increases understanding, & is more inviting
verbal and nonverbal interactions that occur in one on one and small groups
description of your qualifications that can be used for any job related to your career objective and sent to more than one employer
provides info in a format that emphasizes qualifications categorized by skills and accomplishments
conditions for an exchange
Two or more individuals/groups/orgs must participate and each must possess something of value the other party wants; Should provide a benefit or satisfaction to both parties involved in the transaction; Each party must have confidence in the promise of the "something of value" held by the other; •Parties must meet expectations to build trust
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
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
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
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
the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
a written document that acts as a guidebook of marketing activities for the marketing manager
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
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.
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
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
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
buyer for export
An intermediary in the global market that assumes all ownership risks and sells globally for its own account
direct foreign investment
a method of investment in which a company builds a new business or buys an existing business in a foreign country
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
global marketing standardization
Production of uniform products that can be sold the same way all over 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
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
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
A set of tests designed to evaluate a user's ability to create documents using MS Office applications.
the act of giving up one thing (money, credit, labor, goods) in return for something else (goods, services, or ideas)
Absolute Cell reference in a spreadsheet
($B$1*B5) the dollar sign; $; in front of both the row and column reference changes the reference to an ABSOLUTE reference as opposed to a relative referece
Costs that change directly with the amount of production; examples are energy supply and labor costs
a record of the financial situation of an institution on a particular date by listing its assets and the claims against those assets