Forms of Business
This form of business is known for being easy, quick, simple, and affordable, while giving the owner full control with minimal administration.
What is a sole proprietorship?
These private investors put money into emerging startups in exchange for equity stakes and make up one of the fastest-growing segments of the small business capital market.
Who are angels?
A workplace allows employees to decide the best way to reach objectives, encourages autonomy, and relies heavily on trust. This environment reflects which leadership style?
What is free-rein leadership?
If the U.S. imports $200 billion from Japan and exports $120 billion to Japan, is the U.S. running a trade surplus or a trade deficit?
trade deficit
A company donates to community programs, ensures fair labor practices, sources materials sustainably, and focuses on ethical decision-making in all business activities. This approach is an example of what?
What is corporate social responsibility (CSR)?
Common Law vs Statutory Law?
Common Law → judges establish when deciding disputes
Statutory Law → enacted by a federal or state legislature
What is a B Corp?
A B Corp is a for-profit company verified by the B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.
State 3 characteristics of entrepreneurs.
high energy, competitiveness, skilled at organizing, value achievement over profit, desire for immediate feedback, self-reliance, perseverance, not risk-averse
An organization determines long-term goals, develops strategies to achieve them, allocates resources, and sets measurable standards to track progress. Which function of management is this?
What is planning?
What does it mean for a country to have a comparative advantage?
a country sells the products it produces most efficiently, and buys from other countries the products it cannot produce as efficiently
You imagine your decision being on the front page of the newspaper to judge its morality before acting. What ethical test are you applying?
What is the front-page test?
Bernie Madoff and Sam Bankman-Fried are famous examples of people who committed this type of deception that promises high returns with low risk.
What is a Ponzi scheme?
This regulatory body oversees the sale of stock and financial reporting, requiring full disclosure and due diligence.
What is the SEC (Securities and Exchange Commission)?
What is intrapreneurship?
Applying entrepreneurial thinking inside an established organization to spark innovation while still operating within its goals.
What are the forms of planning and what do they do?
Strategic Planning → the setting of broad, long-range goals by top managers
Tactical Planning → the identification of specific, short-range objectives by lower-level managers
Operational Planning → the setting of work standards and schedules
Contingency Planning → backup plans in case primary plans fail
A government places a tax on imported cars, raising their price relative to domestic cars, to protect local manufacturers. This type of trade policy instrument is known as what?
What is a tariff?
Why was the Dodd-Frank Act enacted?
The Dodd-Frank Act was enacted in response to the 2008 financial crisis. It aimed to strengthen financial regulation, consolidate regulatory agencies, increase consumer protections, and tighten oversight of credit rating agencies to help prevent another major economic collapse.
What is a trademark? Give an example of something that was Trademarked.
Any distinctive word, symbol, design, name, logo, slogan, or trade dress a company uses to identify the origin of a product or to distinguish it from other goods on the market (example: Apple’s logo)
This type of stock gives its owners voting rights and residual claims to assets.
What is common stock?
What does it mean for a company to go public?
A privately owned company transitions to a publicly traded corporation by selling shares of its stock to the general public for the first time.
Fill in the blank: The Chief _____ Officer implements the CEO’s changes, the Chief _____ Officer introduced change in an organization, the Chief _____ Officer makes decisions regarding IT equipment or the creation of new IT systems, and the Chief _____ Officer obtains funds, plans budgets, collects funds, etc.
Chief Operating Officer (COO), Chief Executive Officer (CEO), Chief Information Officer (CIO), Chief Financial Officer (CFO)
What is the Foreign Corrupt Practices Act (FCPA)?
The FCPA outlawed the practice of paying bribes to foreign government officials in order to gain business.
What is stakeholder theory (Freeman)?
This approach argues that a corporation has responsibilities not just to maximize profits for shareholders but to consider the impact of its actions on employees, customers, communities, and the environment.
In this non-binding approach, a neutral third party helps disputing parties reach an agreement without going to court.
What is mediation?
What is vertical acquisition? Give an example.
Vertical acquisition is when a firm buys another firm within its distribution channel. An example could be IKEA acquiring forests.
What are the advantages and disadvantages of going public?
Advantages: ability to raise large amounts of capital, improved corporate image, improved access to future financing, attracting and retaining key employees, using stock for acquisitions, listing on a stock exchange
Disadvantages: dilution of founder’s ownership, loss of control, loss of privacy, regulatory requirements and SEC reporting, filing expenses, accountability to shareholders, pressure for short-term performance, loss of focus
Provide one example of a well-written mission statement and one example of a poorly written mission statement, and briefly explain why.
Good: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”
Bad: “Our mission is to deliver superior quality products and services for our customers and communicates through leadership, innovation, and partnerships”
What is a joint venture, and what are the benefits of forming one?
A partnership in which two or more forms join to undertake a major project.
Advantages: shared technology, shared risk, shared marketing & management expertise, entry into markets where foreign firms are often not allowed unless goods are produced locally
Passed after the Enron scandal, this law established stricter standards for U.S. public companies, accounting firms, and boards to improve financial transparency and corporate accountability.
What is the Sarbanes-Oxley Act of 2002 (SOX)?
What is the difference between Arbitration and Mediation?
Arbitration can be binding OR non-binding whereas Mediation is ALWAYS non-binding
(Binding = if we can’t agree on this, we have A come in, we both make our case to A, they will make a decision, legally bound to do that)
(Non-binding = sit down with M and try to work things out before going to court)