MGMT 1P93 Study Guide - Midterm Guide: Videotelephony, World Trade Organization, Oligopoly

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Published on 15 Oct 2011
School
Brock University
Department
Business - Management
Course
MGMT 1P93
Midterm Review
Chapter 1 Questions:
1. What is the role of business in the economy?
a. Define business and discuss the role of business in the economy.
Business Basics
-Business - any activity that provides goods and services in an effort to earn profit.
- Not-for-profit organizations focus on causes not profit
- Profit - the financial reward that comes from starting and running a business; the
money that a business earns in sales (or revenue), minus expenses
-Entrepreneurs are people who risk time, money, and other resources to start and
manage a business
-Business drives up the standard of living, which, in turn, contributes to the quality of
life.
-Business encourage entrepreneurial spirit
2. How has business evolved?
a. Explain the evolution of modern business.
Evolution of Business
- Industrial Revolution - 1700-mid 1800s
- Mass Production
- Factories
- Work Specialization
- Efficiency
- Entrepreneurship Era - Mid 1800s
- Industrial Titans
- Wealth Creation
- Increase in Living Standard
- Manipulation/Competition
- Exploitation
- Production Era - Early 1900s
- Assembly Line
- Refining Production
- Productivity Gains
- Decrease Costs
- Hard Sell
- No Customer Focus
- Marketing Era - 1950s
- Consumer Power
- Growth in Consumerism
- Product Differentiation
- Customer Focus
- Relationship Era
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- Long-term Relationships
- Satisfied Customers
- Use of Technology
3. What is the role not-for-profit organizations in the economy?
a. Discuss the role of not-for-profit organizations in the economy.
Not-for-Profit Organizations Partner With For-Profit Business
- Many not-for-profits work with business to improve the quality of life in society
4. What are the core factors of production?
a. Outline the core factors of production and how they impact the economy.
Factors of Production: Basic Building Blocks
- Business rely on some combination of these factors:
- Natural Resources
-Capital
- Human Resources
- Entrepreneurship
- Entrepreneurial activity can kick-start an economy by harnessing the
other of production
5. What elements of the environment affect business?
a. Describe today’s business environment and discuss each key dimension.
Elements of the Business Environment
- Economic Environment
- Government takes an active role to support businesses:
- Economic development is supported by Industry Canada
- Provinces promote economic development by providing investment and
tax incentives
- Legislation supports enforceable contracts
- Economic Vulnerabilities
- CEO/Worker pay gap
- Consumer debt
- Federal/provincial debt
- Unemployment
- Corruption
- Competitive Environment
- Today’s competition is intense
- Companies must focus on customer satisfaction
- Build long-term relationships
- Provide value
- Customer satisfaction = profitability
- Cheap doesn’t equal value
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- Must use imagination, innovation and determination to bring value to
customers
- Creativity is important to the economy
- with global competition, the stakes are high
- Many of the latest inventions have come from companies who are able to
understand what consumers want before they do
- this trend is likely to build momentum as global competition intensifies
- Speed to market: leading edge (perfect timing) vs. bleeding edge (too early to
market)
- Employee satisfaction key to bottom-line results
- Finding and holding best talent challenge as baby boom generation age
and retires
- Technological Environment
- Technology has transformed businesses and consumers
- How companies do business:
- Telecommunications, computers, World Wide Web
- Robotics
- Flexible Manufacturing
- Alternative Selling/eCommerce
- How consumers shop:
- Online Information; comparative shopping
- Alternative buying/eCommerce
- Global Environment
- Technology
- Technology is linking customer/suppliers worldwide
- Free Trade
- China and India’s economies are growing
- Free trade has impacted the migration of jobs, lowered prices, and
increased quality of goods and services
- General Agreement on Tariffs and Trade (GATT) signed in 1995 in 125
countries, encourages lower tariffs, and fewer trade restrictions
- World Trade Organization (WTO) deals with trade rules between nations
- North American Free Trade Agreement (NAFTA) free trade agreement
between North America
- Natural Disasters
- Blurred lines between countries/world
- Terrorism is more of a threat today
- Social Environment
- Diversity
- Aging population
- Rising worker expectations
- Ethics and social responsibility
6. How are business trends impacting careers?
a. Explain how current business trends might impact your career choices.
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Document Summary

Chapter 1 questions: what is the role of business in the economy, de ne business and discuss the role of business in the economy. Business - any activity that provides goods and services in an effort to earn pro t. Not-for-pro t organizations focus on causes not pro t. Pro t - the nancial reward that comes from starting and running a business; the money that a business earns in sales (or revenue), minus expenses. Entrepreneurs are people who risk time, money, and other resources to start and manage a business. Business drives up the standard of living, which, in turn, contributes to the quality of life. Business encourage entrepreneurial spirit: how has business evolved, explain the evolution of modern business. Use of technology: what is the role not-for-pro t organizations in the economy, discuss the role of not-for-pro t organizations in the economy.