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| Government owns all factors of production, communism. E.g. china, north korea, russia, cuba, iran, etc. |
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| Basis of Capitalism, ownership opened to all |
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| Combination of command and market, what Canada is. |
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| All FOP are shared, Canada is sometimes called this due to its shared health care and pension plans |
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| total of all goods and services produced LOCALLY by a country, a dollar value |
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| All goods and services produced by a country regardless of WHERE they were actually made. |
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| Set of measures that stabilize the economy, government embracing both fiscal and monetary policy |
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| Set by the government (sometimes for political reasons or to stabilize the economy) to manage taxes and spending of revenue. |
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| Control interest rates and the nation's money supply primarily through the bank of Canada. |
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| High interest rates, money is more expensive and therefore reduces spending by buyers and sellers, restricts money supply and suppresses the economy therefore stopping inflation. |
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| Low interest rates, cheap money, stimulates economy, loosens money supply, increases production |
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| safe products, be informed about relevant info (calories), be heard (complain), choose what you buy (competition), to be educated about purchases (risks), courteous service |
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| Difference between exports and imports. Exports exceed imports= trade surplus, other way round is trade deficit. Canada has had a trade surplus since 1975 |
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| Illegal agreement between companies to "fix" their prices, takes away the competition that drives prices down |
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| Determinants influencing Organizational Structure |
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Definition
| size, strategy, technology, economic conditions |
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| Matrix organizational structure |
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| Manager and regular line managers share authority |
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| Team of specialists from different departments to work on a specific project. |
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| Divisional organizational structure |
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| Separates into various divisions of a large company, for ex. a car company might separate into SUV's, vans, compact cars, etc. |
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| Virtual organizational structure |
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| small staff, no formal structure |
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| Functional Organizational structure |
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| grouped by department: marketing, HR, etc. |
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| flow of decision making power and reporting relationships, demonstrated through organizational charts (those ones with boxes and arrows) |
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| Building blocks of organizational structure |
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| Specialization and departmentalization |
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| Bases of departmentalization |
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| Functional (mareting, finance, HR, etc.), customer (department stores: women, men, children's departments), product, geographic, process (production processes to make the product, for ex. a chip maker would put different kinds of chips in different departments) |
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| Used on lower level managers being groomed for a management position, rotated through jobs learning a variety of skills, and gaining a better understanding of the overall sub-unit or company as a whole. |
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| Work stimulation in which job is performed under conditions stimulating the actual work environment. Advantage: allows for self-paced work and immediate feedback |
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| certain percentage must follow into each category |
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| Scientific Management Approach |
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| More efficient=more profit=higher pay=more motivation=winning. Therefore time and motion studies were conducted to increase efficiency |
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| Hawthorne Effect: 1920, first indication that money doesn't motivate but human relations does, managers taking an interest in workers. |
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| Theories X and Y: X managers believed that workers were lazy and uncooperative (needed punishments and rewards), Y believed they were energetic and self motivated (McGregor believed this) This is a classical motivation theory |
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| physiological (food), security, social, esteem (status, job-title), and self fulfillment |
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| Dissatisfaction and satisfaction depends on two factors, hygiene (dissatisfaction: security, policies, etc.) and motivational (satisfaction: recognition) |
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| Expectancy theory (Vroom) |
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| Theory that people are motivated to work towards rewards they want and have a reasonable chance of obtaining |
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| Employee's needed fairness when they compared salary to other employee's and without fairness (equity) they won't be motivated |
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| (extinction) withhold reward |
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| Well quantified goals leads to better performance |
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| Adjusts standard work schedule to fit employees needs, increases commitment an job satisfaction |
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| Time, Place, Form, and Ownership. |
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| Key measure of economic growth, quantity of goods and services produced by an economic system within a specific time period |
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Methods and technology used in the production of a service, taking into account:
-worker training
-just-in-time production systems
-material requirements
-training
-quality control. |
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| Master Production Schedule |
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| Shows which products will be produced, when, and what resources will be used. |
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| Everything from transportation, to storage, inventory control (receiving, handling, counting), and purchasing raw materials for production. |
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| Focus on human performance (skills), high customer orientation, the process as well as the outcome (process is of greater importance), different quality considerations (speed vs. quality) |
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| Focuses mainly on outcome instead of the process, less customer contact. |
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| Equipment (and staff) organized according to function, from assembly-polishing-painting. Good for custom work as product can pass through whichever area is needed. |
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| Used on a "family" of products (very similar), more efficient because equipment doesn't have to be adjusted for different tasks. E.g. one machine makes pockets on absolutely everything |
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| Organization according to single product, usually an assembly line. Efficient but inflexible and expensive due to specialization of equipment |
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| gets rid of assembly lines and cuts down on production, having suppliers pre-assemble many parts and the workers just combine parts to make the finished product |
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| Allows understaffing in low production times (product layout system) |
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| Flexible Manufacturing Systems (FMS) |
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| Using one piece of equipment to have multiple uses, caters to a large labor force but little capital to buy technology |
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| Reduces FMS operations to smaller, more manageable groups |
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| labor productivity formula |
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| Divide gross domestic product by the total number of workers, compares output to the resources used to produce that output. |
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| Total Quality Management (TQM) |
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| quality assurance, includes all parts of business (customers, suppliers, employees, etc.) Tracked by Ishikawa (fishbone) diagram, a cause and effect for tracking problem sources. With all activities necessary for getting a product to the marketplace (planning, etc.) |
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| Tools for TQM: evaluation process to determine added value activities, material flows, and paperwork. Any items that contribute to customer appeal are enhanced, those that don't are reduced. resulting in process variation |
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| Any change in employee's material or work methods that affect output quality |
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| Statistical process control |
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| Statistical techniques that allow managers to analyze variations in product data. E.g. control charts on samples drawn randomly from production Tool for TQM |
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| Firms must constantly raise quality capabilities to remain competitive. However to improve costs money (facilities, equipment, training, etc.) Includes cost of internal failures and external failures |
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| Quality Improvement teams |
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| Cross functional teams assemble to analyze and solve problem, improving work quality by engagement and giving employees a sense of responsibility |
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| Compares firms output to the industry leaders output. |
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| compares quality of a firm's output with their own best past performance. Tracking results over time, showing improvement or decline. |
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| International standard of quality that includes product testing, correcting defects, etc. |
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| ISO 9000 extended to being environmentally friendly |
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| serves external users i.e. shareholders, investors, etc. Keep them informed about firm's financial condition via income statements and balance sheets, all procedures according to GAAP requirements |
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| Serves internal users (managers, some employees), report on expenses, revenues, budgets. provides info to facilitate with planning, forecasting and decision making |
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Chartered accountants: Focus on external financial reporting for stockholders,Canadian revenue agency: auditing, taxes, management services, need university degree and national exam.
Certified general accountants: exam and training, works in private industry or a CGA firm, can audit statements in most provinces.
Certified management accountants: exam, leadership program, university degree, focus on analyzing financial info to gain competitive advantage and develop strategy |
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| Assets-liabilities=owners equity |
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| integrates improvement with employee development, transforming itself to respond to changing demands and needs |
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| Workforce Management system |
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| monitoring worker productivity and then scheduling most productive workers for more hours and at busiest times. Mostly retail and food industry |
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| Piece-rate incentive plan |
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| certain amount of money for every unit produced |
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| Ties money directly to performance which increases motivation |
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| additional pay for each new skill or knowledge (degree) acquired. |
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| aka pay-for-performance; rewards paid to managers for especially productive output- producing earning that significantly exceed cost of bonus |
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| Distribute bonuses to employees when company's costs are reduced through greater work efficiency. This is an effort to emphasize that employees have the same goals as company, therefore share same economic gains |
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| Assets, liabilities, owner equity. Financial position at one point in time (usually by the year) |
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| Cash, accounts receivable, merchandise, supplies, and prepaid expenses. Anything that can be converted to cash within a year |
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| amount customer owes company |
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| land, buildings, equipment, anything of long-term value or use. Fixed because they are harder for liquidity |
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| Distributing the cost of a major asset over the years in which it produces revenue. Calculated by dividing its cost by the amount of years it is expected to be useful, and subtracting that amount each year |
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| copyright, patents, franchise fees, etc. high economic value but difficult to precisely calculate. |
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| additional money invested in firm by owner |
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| net profit (profit after taxes and operating expenses) minus dividend payments to stock holders, part of owner's equity |
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| common stock, paid in capital, and retained earnings. |
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| profit-and-loss statement, revenues-expenses=profit (or loss) The "bottom line", divided into 3 categories: sales, revenues, and operating expenses |
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| Subtract the cost to make the goods sold from revenue. |
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| Profit minus ALL expenses and income taxes |
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| shows uses of cash, divided into 3 categories: operations, investment, and financing. Excludes transactions that don't direct affect cash receipts, such as depreciation. Gives indication of short term viability, can they pay the bills? |
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| Double-entry bookkeeping system |
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| All transactions are entered twice, once in how it affects assets and again in how it affects liabilities, e.g. company buys inventory with cash: decrease in cash, increase in inventory. Every transaction affects two accounts |
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| Short term solvency ratios |
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Definition
| Short term measure of a companies liquidity, estimates risk and ability to pay immediate debts, assets divided by liabilities. Higher the ratio the lower the risk to investors, financially strong companies have a 2:1 ratio. |
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| Calculates ability to repay long term debt using the debt-to-owner's-equity-ratio, which is the debt divided by owner's equity |
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Tools to produce a desired response from market
1. product: quality, features, packaging, brand name, etc. Includes product differentiation
2. price: low enough to attract consumers, high enough to meet companies profit goals
3. place: easy access / distribution and support. Includes suppliers location, store, geographic concentration, etc.
4. promotion: communication, image, public relations |
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| Marketing segments: common traits between consumers |
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Definition
geographic- province, climate, population density, etc.
demographic- age gender, family size, religion, generation, etc. Most popular method because t's easy to gather and analyze the data, an objective criteria that can't be altered
psychographic- psychological traits including interests class, personality, lifestyle. Unlike geography and demographics this can be changed with proper marketing
product-use-variable: Behavioral, usage rate, occasion, user status (first time, regular etc.) |
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| Inexpensive, purchased frequently with minimum time and effort e.g. soap |
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| More expensive, infrequent, comparison of brands, e.g. camera |
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| expensive, rarely purchased, major effort (e.g. house) |
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| National (kellogg's), licensed (using firm's name on other company's products, renting intangible asset), private (carrying name of retailer or wholesaler, e.g. presidents choice) |
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| Right to use a brand-name |
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| Protects an idea or invention for twenty years |
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Ultimately to increase sales, but also:
-Communicate info (what, where)
-position products (establish an image, e.g. only positioning Estee Launder in department stores cause it to be seen as up-scale)
-add value (discounts)
-Allows consumers to position it mentally next to other products on the market, regarding price, quality, features |
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| Advertisements by a manufacturer designed to reach retailers/wholesalers, different focus as they are non-emotional buyers. |
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| By manufacturer to other manufacturers, professional purchasing agents and managers of firms buying raw materials or components |
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| By manufacturer, retailer or wholesaler to reach customer |
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| Sets an initial high price to cover costs and generate profit, only works if marketing convinces customer it's truly different from everything else on the market. |
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| Prices low to sell more and build customer loyalty |
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| Fish bone diagram, cause and effect for tracking problem sources, includes any activity necessary to get a product into market place |
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| Withhold negative consequence, such as putting your gloves on when it's cold takes away the cold and reinforces wearing mittens |
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| Labor, capital, entrepreneurs, natural resources, and information resources. |
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| Conversion of of private firms to government owned |
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| GDP has been adjusted due to changes in currency values and prices (due to inflation) |
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| GDP measured in current dollars and prices (does not take changes in currency values into account) |
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| Part of business cycle, two or more consecutive quarters where the economy shrinks |
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| Depression extending more than 2 years |
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| promotes product over the long-term rather than a short term sale |
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| gain the greatest market percentage |
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| responding to market demand in real-time made possible by technology |
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| Exchange rate's are set so that products are around the same price in every country |
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| strategic move to gain french support and ultimately cause them not to join the french revolution. The act allowed them to practice the roman catholic religion, have a representative in gov while maintaining tithes and land system |
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