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| money left over from revenue after expenses, motivates individuals to engage in business activity. |
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| People who are trying to start a business |
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| Someone who can identify and seizes opportunities. Someone with a higher need for achievement, risk tolerance and creativity than small business owners or corporations |
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| Labour, capital, entrepreneurs, natural resources and information resources (also import market) |
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| Gov. owns all factors of production and industries, makes all decisions regarding distribution of resources. Bad because it doesn't give incentive to do better. This is a monopoly |
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| Government owns all key industries (oil, electric, etc.) supposed to be more efficient |
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| Supply and demand based, Capitalism, ownership opened to all, freedom of choice. |
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| Combination of command and market. This is what the U.S. and Canada is, no country has pure capitalist, socialist or communist country |
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| Conditions of economic system in which an organization operates. |
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| Key economic goals: applies to economic environment |
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| Key economic goals of the government: economic growth, stability and full employment. If you have these three you can afford good health care. |
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| reccurring pattern ups and downs in the economy- four phases- peak, recession, trough & recovery |
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| total quantity of goods and services that a country's citizens can purchase |
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| total quantity and quality of goods and services available to a country's population |
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| value of all goods and services produced by an country's economy within a given period through domestic factors of production |
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| Gross National Product (GNP) |
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| value of goods and services produced by a national economy with given period regardless of production location |
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| come from better efficiency, improves standard of living |
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| value of exported products minus value of imported |
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| amount of money that a government owes creditors |
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| most successful firms focus on core competencies |
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| Porter's Five Force Model |
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| Supplier power, substitutes, buyer power, risk of entry all equal intensity of competition |
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| Rivalry among existing competitors |
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| Firms increase, become equal in capablity, demand for product grows, cost to switch is low, dissatisfied with position and move to improve it |
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| Many customers, few companies. To buy is cheaper than make |
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| Size of buyer, switching costs low, information (on costs to make) |
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| Business Process Management |
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| Moving away from department-oriented organizations toward process-oriented teams |
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| Increase public confidence, improve internal operations by providing consistent standards, helps managers respond to problems |
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| behavior towards employees (hiring, firing and working conditions), economic agents (customers, competitors, suppliers, stockholders) and behavior towards organization |
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| process of identifying an opportunity in the marketplace and capitalizing on it |
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| Creates something new within large organization |
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| Entrepreneurs identify opportunities and resources then start new venture set-up you then need growth and stability |
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| Doing more with less, preferably someone else's resources |
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| Debt (a loan) or equity (selling a portion of the ventures) |
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| Someone who provides money to ventures in exchange for equity, high-risk |
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| Benefits of franchising for the franchiser |
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| rapid growth, shared advertising costs, increased investment money, motivated owners, local expertise |
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| Benefits of franchising for the franchisee |
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| Access to management (expertise), no need to build a business, lower failure rates, well-developed brand, training provided, economies in scale in buying supplies, help with financing, be your own boss. |
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| Advantages: Freedom, simplicity, low start-up costs, tax benefits. Disadvantages: full liability, difficult to raise money, reliance on yourself |
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| Frequently used by professional, two or more individuals agree to combine financial, managerial and technical abilities to operate a business |
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| Partnership with limited liability, don't participate actively in the business. Needs one general partner to participate and be held liable. |
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| Most common, similar to sole proprietorship because partners are liable |
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| Advantages of Partnership |
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| more money, talent and tax benefits. Disadvantages, liability and potential conflict |
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| Regardless of size or industry corporations must have the following characteristics, separate legal entity from owners, property rights and obligations, indefinite life span, limited liability. |
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| Part of corporation, governing body, responsible to shareholders, make major decisions, personally responsible for unpaid tax |
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| Avoiding tax by distributing profits |
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| advantages are limited liability, company maintains value, professional management, easy to raise money. |
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| Income Trust Disadvantages |
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| Start-up costs, double taxation (corporations and stockholders both pay taxes on profit) regulations, stockholder revolts. |
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| Incorporated form of business where it is owned and democratically controlled by the people who use it's services or product. Earnings distributed by use rather than level of investment. Formed to benefit its owners in the form of reduced prices and distribution of surpluses |
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| A country can produce certain items more cheaply than it can other items |
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| a country can produce something more cheaply or better than any other country |
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| International competitiveness |
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| ability of a country to generate more wealth than other countries |
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| difference between the total value of exports, and the total value of imports. |
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| Cash flow into or out of the country |
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| Cash flow comes in through |
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| exports, foreign tourist spending in canada, foreign investments in canada, earnings from canadian investments outside of canada |
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| Cash flow goes out through |
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| imports, canadian tourist spending overseas, foreign aid grants, military spending abroad, canadian investment abroad, earnings from foreign investment |
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| Levels of International Business |
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| Exporter/importer (stays in home country but imports goods), international firm (significant portion of business abroad), multinational firm (assets and facilities in 2 or more foreign countries) |
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| Determinants of organizations structure |
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| size, strategy, technology and economic conditions |
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| flow of decision-making power and reporting (who you report to) relationships, part of organizational structure |
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| Building Blocks of Organizational Structure |
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| Specification on how a job is supposed to be done and how these jobs relate to each other |
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| a task fragmentized into component parts |
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| Specialization and company size |
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| small company = fewer employees and therefore less specialization |
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| Grouping related jobs into logical units, brings accountability, easy for managers to monitor and better control |
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| Bases of Departmentalization |
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| Functional (marketing, finance), customer (department store) and process (manufacturing, food processes) |
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| Either centralized (control from above, consistency) or decentralized (lower and mid-level managers to make decisions, flexible, delegate tasks) |
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| Duties, conditions, tools used. Job specifications: skills required. Used for recruitment, performance appraisal and compensation rate |
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| Forecasting HR demand and supply |
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| When to hire and layoff, consideration to expansion, economic trends and sales forecast. |
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| determines how well their doing, how effective recruiting and selection is and what are training and compensation needs |
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| Performance Appraisal Methods |
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| Simple ranking (best to worst), forced distribution (certain percentage must fall into each category from great to poor), graphic rating scale (1-5), critical incident method (particular good or bad events recorded) |
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| Performance based or Merit pay plans (good work earns more) |
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| Individual incentives (real time reward), piece-rate plan (how fast/speed), sales commission, bonuses (annual), pay for knowledge (degrees=more cash) |
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| Workforce Management systems |
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| monitoring worker productivity and then scheduling most productive at busiest times |
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| The profitability level of the firm is used to determine the bonuses of employees |
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| Bonuses for reduction in cost (due to increased efficiency) |
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| Mandated protection plans, optional plans (healthy care), paid time off, unpaid sabbaticals. |
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| Equal Employment Opportunity Regulations |
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| Protects people from unfair or inappropriate discrimination |
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| Canadian Human Rights Act 1977 |
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| Applies to federally regulated organizations, prohibits discrimination for age, race, color, etc. |
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| Employment Equity Act 1986 |
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| Designates 4 groups as disabled (woman, minorities, aboriginal people, disabled) Purpose is to make sure nobody is denied opportunities for reasons unrelated to ability. Required to publish statistics. Enforced by Canadian Human Rights commission |
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| Equal pay for work of equal value to the firm, classified based on qualifications, similar requirements paid the same |
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| customers, suppliers, stockholders, competitors |
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| Consumer (sell to members and public such as gas station), financial (credit unions), insurance, housing cooperatives !provide houses for those with stocks) |
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| Most profitable companies |
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| Encana corp (gas), canadian wheat board, canadian natural resources |
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| firms buy resources they need in the production of goods and services. input money to economy |
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| supply goods and services in response to demand on the part of customers. output goods |
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