Business 110 Chapter 2 Upgrade

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Business 110 Chapter 2

Terms in this set (52)

Factors and forces outside an organization that

external environment
affect the organization's performance.

That which separates the organization from its

organizational boundary
environment

Conditions of the economic system in which an

economic environment
organization operates.

pattern of short term ups and downs ( expansions

business cycle
and contractions) in an economy

A period during which aggregate output declines.

recession Conventionally, a period in which aggregate
output declines for two consecutive quarters.

A severe and prolonged reduction in economic

depression
activity as occurred during the 1930s

The total quantity of goods and services

aggregate output
produced in an economy in a given period.

The amount of goods and services people can

standard of living
buy with the money they have.

The sum total of the value of all the goods and

gross domestic product
services produced in a nation
Business 110 Chapter 2 The total value of goods and services, including
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income received from abroad, produced by the

gross national product (GNP) residents of a country within a specific time
period, usually one year.

real GDP GDP adjusted for price changes

GDP measured in current dollars (i.e., with current

nominal GDP
prices)

a measure of how many units of currency are

needed in one country to buy the amount of
purchasing power parity
goods and services that one unit of currency will
buy in another country

A measure of economic growth that compares the

productivity output of an economic system with the resources
needed (input) to produce that output.

Difference between how much a country imports

balance of trade
and how much it exports

The amount of money a national government

national debt
owes to other governments or its people

budget deficit Government spending more than it takes in

A condition in which national output is growing

stability steadily, with low inflation and full employment of
resources

An increase in the overall level of prices in the

inflation
economy
Business 110 Chapter 2
consumer price index
A measure of the overall cost of the goods and
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services bought by a typical consumer

deflation A situation in which prices are declining

level of joblessness among people actively

unemployment
seeking work in an economic system

government economic policy intended to smooth

stabilization policy out fluctuations in output and unemployment and
to stabilize prices

policies that a government uses to direct how it

fiscal policies
collects and spends revenue

Government policies that control the amount of

monetary policies
money in circulation and its growth rate

all the ways firms create value for their

technology
constituents

research and development those activites that are necessary to provide new
(R&D) products, services, and processes

improving knowledge in an area without primarily

basic or pure R&D focusing on weather any discoveries that might
occur are immediately marketable.

focusing specifically on how a technological

innovation can be put to use in the making of a
applied R&D
product or service that can be sold in the
marketplace.

The process of taking a new technology from the

technology transfer
laboratory to the marketplace.
Business 110 Chapter 2 large-scale information system for organizingStudy
and
enterprise resource planning managing a firm's processes across product lines,
(ERP) departments, and geographic lcations

the relationship between business and

political-legal environment
government

Conditions including the customs, values attitudes,

socio-cultural environment and demographic characteristics of the society in
which an organization functions

skills and resources with which an organization

core competency competes best and creates the most value for
owners

strategy of paying suppliers and distributors to

outsourcing perform certain business processes or to provide
needed materials or services

various forms of electronic communications that

allow users to form online communications that
social media
allow users to form online communities and share
ideas, opinions, and content

strategy of using the internet and word of mouth

viral marketing
to spread product information

any activity that adds value to some input,

process
transforming it into an output for a customer.

Approach by which firms move away from

business process department-oriented organization and toward
management process-oriented team structures that cut across
old departmental boundaries
Business 110 Chapter 2
acquisition one firm buys another Study

merger consolidation of two firms

the combination of two or more firms competing

horizontal merger
in the same market with the same good or service

a merger of companies where one is a supplier or

vertical merger
customer of the other

conglomerate merger a merger of companies in unrelated business

a merger in which the acquired company

friendly takeover
welcomes the acquisition

a merger in which one company buys enough of

the other company's stock to take control even
hostile takeover
though the other company is opposed to the
takeover

a defense adopted by management to make a

poison pill firm less attractive to a hostile suitor in a takeover
attempt

Sale by a company of an asset that is not

divestiture performing well, that is not core to the company's
business, or that is worth more as a separate entity

strategy of setting up one or more corporate units

spinoff
as new, independent corporations

involves two or more enterprises co-operating in

strategic alliance (or joint
the research, development, manufacture, or
venture)
marketing of a product
Business 110 Chapter 2
subsidiary corporation
A corporation that is under the control of another
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corporation that owns a majority of the shares.

parent corporation A corporation that owns a subsidiary