MGMT 1281 Chapter Notes - Chapter 2: Purchasing Power Parity, Business Process Management, Money Supply
15 Jun 2018
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Chapter 2
Organizational Boundaries and Environments
External Environment: Everything outside an organization’s boundaries that might affect it.
Organizational Boundary: That which separates the organization from its environment.
The Economic Environment
Economic Environment: Conditions of the economic system in which an organization operates.
Aggregate Output: Total quantity of goods and services produced by an economic system
during a given period. *an increase in aggregate output is economic growth
Standard of Living: Total quantity and quality of goods and services that a country’s citizens can
purchase with the currency used in their economic system.
Business Cycle: Pattern of short term ups and downs (expansions and contractions) in an
economy.
Gross Domestic Product (GDP): Total value of all goods and services produced within a given
period by a national economy through domestic factors of production.
Gross National Product (GNP): Total value of all goods and services 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: GDO calculated to account for changes in currency values and price changes.
Nominal GDP: GDP measured in current dollars or with all components valued ay current
prices.
Purchasing Power Parity: Principle that exchange rates are set so that the prices of similar
products i different countries are about the same.
Productivity: Measure of economic growth that compares how much a system produces with the
resources need to produce it.
Balance of Trade: The total of a country’s 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.
Budget Deficits: The result of the government spending more in one year than it takes in during
that year.
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Document Summary
External environment: everything outside an organization"s boundaries that might affect it. Organizational boundary: that which separates the organization from its environment. Economic environment: conditions of the economic system in which an organization operates. Aggregate output: total quantity of goods and services produced by an economic system during a given period. *an increase in aggregate output is economic growth. Standard of living: total quantity and quality of goods and services that a country"s citizens can purchase with the currency used in their economic system. Business cycle: pattern of short term ups and downs (expansions and contractions) in an economy. Gross domestic product (gdp): total value of all goods and services produced within a given period by a national economy through domestic factors of production. Gross national product (gnp): total value of all goods and services 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.
