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BUS 496
BUS 496 exam 1
68
Business
Undergraduate 4
02/22/2011

Additional Business Flashcards

 


 

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Term
Strategy
Definition
Set of actions that managers take to increase their company's performance relative to rivals
Term
Profitability
Definition
The return that a company makes on the capital invested in the enterprise
Term
Competitive advantage
Definition
Achieved when a company's profitability is greater than the average profitability of all firms in its industry
Term
Sustained Competitive advantage
Definition
Achieved when a company is able to maintain above-average profitability for a number of years
Term
General Managers
Definition
Bears responsibility for the overall performance of the company or for one of its major subunits or divisions
Term
Functional Managers
Definition
Responsible for supervising a particular function - that is, a task, activity, or operation like accounting, marketing, R&D, IT, or logistics.
Term
Multidivisional Company
Definition
A company that competes in several different businesses and has created a separate self contained division to manage each of these
Term
Business Unit
Definition
Self contained division (with its own functions-for example, finance, purchasing, production, and marketing departments) that provides a product or service for a particular market
Term
Strategy formulation
Definition
Task of analyzing the organization's external and internal environments and then selecting appropriate strategies
Term
Strategy implementation
Definition
Putting strategies into action
Term
SWOT analysis
Definition
comparison of strengths, weaknesses, opportunities, and threats
Term
Autonomous Action
Definition
Action taken by lower-level managers who, on their own initiative, formulate new strategies and work to persuade top-level managers to alter the strategic priorities of a company
Term
Emergent Strategies
Definition
Strategies that "emerge" in the absence of planning
Term
Scenario Planning
Definition
Formulating plans that are based on "what if" scenarios about the future
Term
Cognitive biases
Definition
Systematic errors in human decision making that arise from the way people process information
Term
Prior hypothesis bias
Definition
A cognitive bias that occurs when decision makers who have strong prior beliefs tend to make decisions on the basis of these beliefs, even when presented with evidence that their beliefs are wrong
Term
Escalating commitment
Definition
A cognitive bias that occurs when decision makers, having already committed significant resources to a project, commit even more resources if they receive feedback that the project is failing
Term
Reasoning by analogy
Definition
Involves the use of simple analogies to make sense out of complex problems
Term
Representativeness
Definition
Cognitive bias rooted in the tendency to generalize from a small sample or even a single vivid anecdote
Term
Illusion of control
Definition
Cognitive bias rooted in the tendency to overestimate one's ability to control events
Term
Devil's advocacy
Definition
when one member of a decision-making group acts as a devil's advocate, bringing out all the considerations that might make the proposal unacceptable
Term
Dialectic Inquiry
Definition
Generation of a plan (thesis) and a counter plan (an anti-thesis) that reflect plausible but conflicting courses of action
Term
Stakeholders
Definition
Individuals or groups with an interest, claim, or stake in the company, in what it does, and in how well it performs
Term
Corporate Governance
Definition
Mechanisms that exist to ensure that managers pursue strategies in the interests of an important stakeholder group, the shareholders.
Term
Internal Stakeholders
Definition
Stockholders and employees, including executive officers, other managers, and board memebers
Term
External Stakeholders
Definition
Individuals and groups outside the company that have some claim on the company
Term
Mission
Definition
What it is that a company exists to do
Term
Vision
Definition
Desired future state
Term
Values
Definition
Beliefs about how managers and employees of a company should conduct themselves, how they should do business, and what kind of organization they should build to help the company achieve its mission
Term
Organizational Culture
Definition
Set of values, norms, and standards that control how employees work to achieve an organization's mission and goals
Term
Goal
Definition
Precise and measurable desired future state that a company attempts to realize
Term
Risk Capital
Definition
Equity capital for which there is no guarantee that stockholders will ever recoup their investment or earn a decent return
Term
Agency problem
Definition
Problem that arises when managers pursue strategies that are not in the interests of stockholders
Term
Agency Theory
Definition
Theory dealing with the problems that can arise in a business relationship when one person delegates decision making authority to another
Term
Agency relationship
Definition
Arises whenever one party delegates decision making authority or control over resources to another
Term
Principal
Definition
person delegating authority to an agent, who acts on the principals behalf
Term
Agent
Definition
A person whom authority is delegated by a principal
Term
Information asymmetry
Definition
Situation in which one party to an exchange has more info about the exchange than the other party
Term
Governance mechanisms
Definition
Mechanisms that principles put in place to align incentives between principals and agents and to monitor and control agents
Term
Takeover Constraint
Definition
Threat arising from the risk of being acquired by another company
Term
Ethics
Definition
Accepted principles of right or wrong that govern the conduct of a person
Term
Business ethics
Definition
Accepted principles of right or wrong governing the conduct of business people
Term
Ethical Dilemmas
Definition
Situations where there is no agreement about exactly what the accepted principles of right and wrong are or where none of the available alternatives seem ethically acceptable
Term
Self Dealing
Definition
Managers efforts to find a way to feather their own nests with corporation monies
Term
Information Manipulation
Definition
Efforts used to control corporate data to distort or hide info in order to enhance own financial situation or competitive position of firm
Term
Anticompetitive behavior
Definition
Actions aimed at harming actual or potential competitors, most often by using monopoly power, thereby enhancing the long-run prospects of the firm
Term
Opportunistic exploitation
Definition
Efforts to unilaterally rewrite the terms of a contract with suppliers, buyers, or complement providers in a way that is more favorable to the firm, often using their power to force the revision through
Term
Substandard working conditions
Definition
Created when managers underinvest in working conditions or pay employees below market rates, in order to reduce their costs
Term
Environmental Degradation
Definition
Pollution or other forms of environmental harm that result directly from a firm's actions
Term
corruption
Definition
Payment of bribes or other unethical acts by managers in effort to gain access to lucrative business contracts
Term
Code of ethics
Definition
Formal statement of the ethical principles a business adheres to
Term
Opportunities
Definition
Conditions in company environment that it can take advantage of to formulate and implement strategies that will enable it to become more profitable
Term
Threats
Definition
Conditions in the external environment that endanger the integrity and profitability of a company's business
Term
Industry
Definition
Group of companies offering products or services
Term
Competitors
Definition
Enterprises that serve the same basic customer needs
Term
Potential Competitors
Definition
Companies that are not completing but have the capability to do so
Term
Barriers to entry
Definition
Factors that make it costly for companies to enter industry
Term
Economies of scale
Definition
Reductions in unit costs attributed to a larger output
Term
Brand Loyalty
Definition
Preference of consumers for the products of established companies
Term
Absolute Cost Advantage
Definition
A cost advantage that is enjoyed by incumbents in an industry and that new entrants cannot expect to match
Term
Switching Costs
Definition
Costs that consumers must bear to switch from the products offered by one established company to the products offered by a new entrant
Term
Rivalry
Definition
Competitive struggle between companies in an industry to gain market share from each other
Term
Consolidated Industry
Definition
Industry dominated by a small number of large companies or, in extreme cases, just one company, which often is in a position to determine industry prices
Term
Fixed Costs
Definition
Costs that must be borne before the firm makes a single sale
Term
Exit barriers
Definition
Economic, strategic and emotional factors that prevent companies from leaving the industry
Term
Bargaining power of buyers
Definition
Ability of buyers to bargain down prices charged by companies in the industry or to raise the costs of companies in the industry by demanding better product quality and service
Term
Bargaining power of suppliers
Definition
Ability of suppliers to raise the price of inputs or to raise the costs of the industry in other ways
Term
Substitute products
Definition
The products of different businesses or industries that can satisfy similar customer needs
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