MGMT 1000 Study Guide - Midterm Guide: Business Process Management, Purchasing Power Parity, Initial Public Offering
28 Oct 2016
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Chapter 1:
Factors of production: Labour, capital, entrepreneurs, natural resources, and information.- the
resources used to produce goods and services
•Labour: mental and physical capabilities of people.
•Capital: funds needed to start business and to keep it operating and growing.
•Entrepreneurs: accept opportunities and risks involved in creating and owing a business.
•Natural resources: physical resources such as land water mineral deposits….
•Information: specialized knowledge and expertise of people who work in businesses.
Economic systems: the way a nation allocates its resources amount citizens
•manage the factors of production
•Command Economy: government controls all or most factors of production and makes all or
most decisions.
•Market economy: Individuals control all or most factors of production.
•Communism: A type of command economy in which government owns and operates all
industries.
•Market: process between buyers and sellers of a particular good or service.
•Input market: firms buy resources that they need in the production of goods and services.
•output market firms supply goods and services in response to demand on the part of
consumers.
•Lobbyist: a person hired by a company or an industry to represent its interests with
government officials.
•Trade association: an organization dedicated to promoting the interests and assisting the
members of a particular industry.
•Law of Demand: The principle that buyers will purchase (demand) more of a product as price
drops
•Demand and supply schedule: assessment of the relationships between different levels of
demand and supply at different price levels.
•Surplus: situation in which quantity supplied exceeds quantity demanded.
•Shortage: quantity demanded will be greater than the quantity supplied.
•Monopolistic competition: a market or industry characterized by a large number of firms
supplying products that are similar but distinctive enough from one another to give firms some
ability to influence price.
•Oligopoly: a market or industry characterized by a small number of very large firms that have
the power to influence the price of their product and/ services.
•Monopoly: a market or industry with only one producer, who can set the price of its products
and/or resources.
Chapter 2:
•External Environment: Everything outside an organizations boundaries that might affect it.
•Economic Environment: Conditions of the economic system in which an organization
operates.
•Aggregate Output: Total quantity of good and service produced by an economic system during
a given period.
•GDP: Total value of all goods and services produced within a given period by a national
economy through domestic factors of production
•Business Cycle: pattern of short-term ups and downs (expansions and contractions) in an
economy.
•Gross National Product (GNP): Total value of all goods and searches produced by a national
economy within a given period regardless of where the factors of production are located.
•GDP PER Capita: Gross domestic product per person.
•Real GDP: GDP calculated to account for changes in currency values and price changes.
•Purchasing Power Parity: principle that exchange rates are set so that the prices of similar
products in different countries are about the same.
•Productivity: Measure of economic growth that compares how much a system produces with
the resources needed to produce it.
•Balance of Trade: The total of a country exports (Sales to other countries) minus its
imports(purchases from other countries).
•National Debt: the total amount of money that a country owes its creditors.
•Budge Deficits: the result of the government spending more in one year than it takes in during
that year.
•Inflation Occurrence of widespread price increases throughout an economic system.
•Consumer Price Index(CPI): Measure of the prices of typical product purchases by consumers
living in urban areas.
•Deflation: A period of generally falling prices.
•Unemployment: the level of joblessness among people actively seeking work in an economic
system.
• Fiscal Policies: Policies whereby governments collect and spend revenues.
•Monetary Policies: Policies whereby the government controls the size of the nations money
supply.
•Research and Development( R&D): Those activities that are necessary to provide new
products, services, and processes.
•Political-Legal Environment: Conditions reflecting the relationship between business and
government, usually in the form of government regulation.
•Socio Cultural Environment: Conditions including the customs, values, attitudes, and
demographic characteristics of the society in which an organization functions.
•Outsourcing: Strategy of paying suppliers and distributors to perform certain business
processes or to provided needed materials or services.
•Business process management: Approach by which firms move away from department-
oriented organization and toward process- oriented team structures that cut across old
departmental boundaries.
•Acquisition: The purchases of a company by another, larger firm, which absorbs the smaller
company into its operations.
•Merger: The union of to companies to form a single new business.
•Poison Pill: A defence management adopts to make a firm less attractive to an actual or
potential hostile suitor in a takeover attempt.
•Divestiture: Occurs when company sells part of its existing business operations to another
company
•Spinoff: Strategy of setting up one or more corporate units as new, independent corporations.
Chapter 3:
•Ethics: Individual standards or moral values regarding what is right and wrong or good and
bad.
•Business Ethics: Ethical or unethical behaviours by a manger or employee of an organization.
•Managerial Ethics: Standards of behaviour that guide individual managers in their work.
