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| moral principles by which people conduct themselves personally, socially, or professionally |
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| rules based on moral principles about how businesses and employees ought to conduct themselves |
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| a set of guidelines for maintaining ethics in the workplace |
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| a shop or factory in which workers are employed for long hours at low wages and under unhealthy conditions |
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| a conflict between self-interest and professional obligation |
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| the duty to do what is best for the good of society |
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| 4 Sectors One Owes Social Responsibility |
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| Customers, Employees, Society, Creditors/Owners |
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| the act of making charitable donations to improve the welfare of society |
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| Bono made RED to raise money to fight AIDS in Africa |
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| Food and Drug Administration: a federal government agency that protects consumers from dangerous or mislabeled products |
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| Americans With Disabilities Act |
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Definition
| bans discrimination against people with physical or mental disability |
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| Occupational Safety and Health Administration |
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Definition
| sets and enforces work-related health and safety rules |
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| requires that men and women are paid the same wages for doing equal work |
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| mandates truthful reporting of financials to protect shareholders and the general public from accounting errors and fraudulent practices |
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| What company got in trouble for publicizing false financial records? |
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Definition
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| The Ethical Decision-Making Process |
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Definition
a. Identify the ethical dilemma
b. Discover alternative actions
c. Decide who might be affected
d. List the probably effects of the alternatives
e.Select the best alternative |
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| Business owned by one person |
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| Business owned by two or more people who share its risks and rewards |
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| Business that is registered by a state and operates apart from its owners |
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| Organization that is owned and operated by its members |
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| Organization that focuses on providing a service, but not to make a profit |
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| Contractual agreement to use the name and sell the products or services of a company in a designated geographic area |
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| Six Types of Business Ownerships |
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Definition
| Sole proprietorship, partnership, corporation, cooperation, franchise, and nonprofit organization |
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Definition
| Producers (gather raw goods), processors (change raw materials into more finished products), manufacturers (make finished products out of processed goods), retailers (purchase goods from wholesalers and sell them to consumers), intermediaries (move goods from one business to another), and wholesalers (distribute goods) |
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| Six Functions of Businesses |
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Definition
Production: the process of creating, expanding, manufacturing, or improving goods and services
Procurement: the buying and reselling of goods that have already been produced
Marketing: the process of planning, pricing, promoting, selling, and distributing ideas, goods, and services
Management: the process of achieving company goals by planning, organizing, leading, controlling, and evaluating the effective use of resources
Finance: the business or art of money and management
Accounting: involves maintaining and checking records, handling bills, and preparing financial reports for a business |
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Definition
Planning: setting objectives and making long and short term plans for meeting the objectives
Leading: influencing, guiding, and directing people under one’s management to carry out their assigned tasks
Organizing: obtaining and coordinating resources so that a business’s objectives can be met
Controlling: setting standards for work, evaluating performance, and solving problems that prevent certain tasks’ completion |
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Definition
Top-level Manager: is responsible for setting goals and planning for the future as well as leading and controlling the work of others
Middle Manager: carries out the decisions of top management. They’re often responsible for various departments in business, such as the production, marketing, and accounting
Operational Manager: is responsible for the daily operations of a business. |
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Term
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Definition
| Show how the firm is structured and who is in charge of whom |
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Definition
| organizational structure in which managers on one level are in charge of those beneath them |
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| Organizational chart shows the direct line of authority as well as staff who advise the line personnel |
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Definition
| Puts authority in one place- with top management |
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| Decentralized Organization |
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Definition
| Gives authority to a number of different managers (often evident in international businesses) |
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Definition
| Divides responsibility among specific units, or departments |
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| 3 Ways to Manage and Lead Others |
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Definition
Initiative: the ability to act and make decisions without the help or advice of others
Human Relations: the study of how people interact in the workplace and how communication can be improved
Integrity: an adherence to a code of ethical values such as honesty, loyalty, and fairness |
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Term
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Definition
Autocratic Leadership: one person runs everything and makes all decisions without consulting others
Democratic Leadership: managers work with employees to make decisions but the leader makes the final decision
Free-Rein Leadership: requires the leader to set goals for mangers and employees and then leave them alone to get the job done (giving mangers and employees the power to run things and make decisions is called delegating) |
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Definition
| People employed in a business, commonly referred as personnel, who provide the skills, knowledge, labor, and experience needed to make a business productive |
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| Human Resources Management |
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Definition
| The process of finding, selecting, training, and evaluating employees |
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| a fixed amount of pay each week/month/year |
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| actively looking for qualified people to fill a job |
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| someone who comments on a job applicant’s character and qualifications for a job |
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| the process of verifying certain information provided by a job applicant |
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Definition
| Gives an employee a higher-level job with more authority, responsibility, and pay |
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Definition
| A move to another job within the company, usually at the same level and pay |
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Term
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Definition
| Leaving the company for any reason, either voluntary (involves exit interview) or involuntary (layoff/termination) (turnover is the number of employees who leave an organization and are replaced over time) |
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Term
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Definition
outline financial facts of a new venture
"road map" to its future |
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Term
| 6 Reasons for Creating a Financial Plan |
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Definition
1) identify needed assets
2) describes amount of money needed to start/operate
3) what expenses businesses will incur and how to cover them
4) how businesses will document and report financials
5) forecasts finances to predict future profitability
6) how businesses will acquire money and expand |
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| Examples of Business Assets |
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Definition
| cash, equipment, buildings, supplies, inventory, land |
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Term
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Definition
| money supplied by investors, banks, or owners of a business |
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Term
| Difference between start up and operating capital |
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Definition
Start up: used to pay for various assets/expenses of a new venture/business (remodeling, security deposits, permits/licenses, supplies)
Operating: keep it running (payroll, rent, utility bills, bank fees) |
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Term
| Why do business owners use a budget? |
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Definition
| Guide to business' future, control spending, predict money business will need |
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Term
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Definition
| systematic process of recording and reporting the financial position of a company/person |
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Term
| What does an accountant do? |
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Definition
| maintains and reviews records |
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Term
| Big Four accounting firms |
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Definition
Princewaterhouse Coopers
Deloitte Touche Tohmatsu
Ernst and Young
KPMG |
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Term
| What is the significance of GAAP? |
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Definition
universal way to prepare financial records
all businesses follow these guidelines to ease communication |
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Term
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Definition
| property or other items of value owned by a business |
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Term
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Definition
current: used up or converted to cash during normal cycle of business
fixed: items of value held for over a year |
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Term
| What is the difference between accounts receivable and accounts payable? |
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Definition
receivable: total amount of money owed to a business (current asset)
payable: short term liability, what you owe |
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Term
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Definition
Assets = Liabilities + Owner's Equity
can tell if you're right when the two sides are equal |
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| What are financial statements and who is required to make them public? |
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Definition
Documents that summarize business transactions
Corporations are required to make them public |
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Term
| Who reads/analyzes financial statements used in business? (5) |
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Definition
| Stockholders, banks, employees, investment companies, owners read them to learn about a company's financial condition |
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Term
| Three Main Financial Statements |
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Definition
income statement: net income/loss
balance sheet: report of balance or assets, liability, and owner's equity)
cash flows: money available at any time |
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Definition
| a company that sells all or practically all of a product or service with little or no competition |
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Term
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Definition
| raw materials from nature that are used to produce goods |
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Term
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Definition
| the study of how individuals and groups of individuals strive to satisfy their wants and needs by making choices |
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| things used to produce goods and services such as buildings, materials, and equipment |
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| amount of money given or asked for when goods and services are bought or sold |
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Definition
| an individual who undertakes the creation, organization, and ownership of a business |
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| entrepreneurial resources |
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Definition
| people who recognized opportunities ans start businesses |
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Definition
| amount of goods and services that producers will provide at various prices |
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Definition
| the economic resources neccesary to produce a society's goods and services |
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Definition
| process of recognizing a business opportunity, testing it in the marker, and gathering the resources necessary to start and run a business |
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| methods societies use to distribute resources |
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| people who make the goods and services for which they are paid |
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Definition
| number of jobs increase and consumers spend more so there is higher demand |
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Term
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Definition
| Number of jobs decrease and consumers spend less so there is lower demand |
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Term
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Definition
| Gross Domestic Product: compute the sum of goods ans services sold to businesses, consumers, the governments, and other companies |
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Term
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Definition
| the level of material comfort as measured by the goods and services that are available |
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Definition
| the number of people who are able and willing to work but cannot find work during a given period |
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Definition
| the general increase in the price of good and services (Buying power decreases) |
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Definition
| general decrease in the price of goods and services (supply>demand, production cut, demand goes down) |
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Definition
GDP
Standard of Living
Unemployment Rate
Rate of Inflation |
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Term
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Definition
government spends more than it collects
(surplus: revenue exceeds spending) |
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Definition
| total amount of money the government owes |
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Term
| Four Stages of Business Cycle |
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Definition
Recovery
Prosperity
Recession
Depression |
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| Four Functions of Management |
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Definition
Planning: process of creating goals and objectives
Organizing: getting the resources arranged in an orderly and functional way to accomplish goals and objectives
Leading: providing direction and vision
Controlling: keeping the company on track and making sure goals are met |
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| Circular Flow of Economic Activity |
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Definition
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