MGTA01H3 Chapter 1: Chapter 1

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24 Feb 2011

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Business: an organized effort to provide goods or services, to customers, in order to make a profit. Profit: the money that remains after a business"s expenses are subtracted from its revenues. Profit is the fundamental reason for a business to exist. They provide services, but not for a profit. Loss: when expenses are greater than revenues. (it cost more money to produce the products and run the business, than the business can generate through sales. ) Economics: the study of how businesses and people make choices about: what things to produce/consume, how best to produce things, how best to distribute wealth. The basic economic theory states that there are basic building blocks used to produce anything, we call those building blocks factors of production. : natural resources raw materials found in ground, grown from earth, or harvested from nature. Examples include: coal, wheat, water, wood: labour human beings, example workers, capital money, or machines and technologies that money can buy.

Related Questions

A diversified company's business units exhibit good financial resource fit when

A.the resource requirements of each business exactly match the company's available resources.

B.each business is a cash cow.

C.a company has the resources to adequately support the requirements of its businesses as a group without spreading itself too thin and when individual businesses add to a company's overall strengths. each business is sufficiently profitable to generate an attractive return on invested capital.

D.each business unit produces large internal cash flows over and above what is needed to build and maintain the business.

viridiankoala364

16) Which of the following best defines the term business cycle? a) the pattern of short-term ups and downs in an economy the total quantity of goods and services produced by an economic system during a given period the conditions of the economic system in which an organization operates the measure of economic growth that compares how much a system produces with the resources needed to produce it d)

The two biggest drawbacks or disadvantages of unrelated diversification are

A)underemphasizing the importance of resource fit and the strong likelihood of diversifying into businesses that top management does not know all that much about.

B)insufficient cash flows to finance so many different lines of business and a lack of uniformity among the strategies of the businesses it has diversified into.

C)volatile sales and profits and making the mistake of diversifying into too many cash cow businesses.

D)the difficulties of competently managing many different businesses and being without the added source of competitive advantage that cross-business strategic fit provides.

E)over-investing in the achievement of economies of scope and the difficulties of achieving a good mix of cash cow and cash hog businesses.