Nonprofit Organizations
What is a nonprofit organization?
Only focuses on furthering a mission, social cause, or shared goal. Not making money
What does a labor union do?
Advocates for its members and negotiates for better wages, working conditions, working hours
What is wage determination?
Determining how much an employee should get paid based on their experience, knowledge, skills, etc.
What is a conglomerate?
Multi-industry company that consists of several different and unrelated business entities that operate in various industries.
What is an angel investor?
Someone who donates money to a company, not expecting something in return
What is an example of a Nonprofit that we have talked about in class?
Goodwill, American Heart Association, American Red Cross, Public schools, the Government, labor unions
Negatives of labor unions
What is one major factor in wage determination?
What is a horizontal merger?
Combination of companies operating in the same industry and at the same stage of the production or distribution process
What is a venture capitalist?
an investor who provides young companies with money in exchange for some ownership of the company
What does a nonprofit do with extra money?
Reinvests the money back into the organization/retained money
Benefits of labor unions?
Better wages, job security, reduced inequality, political influence advocating for the workers
What is the theory of negotiated wages?
A labor union's bargaining power determines its members' wages
What is a vertical merger?
Combination of two or more companies who are part of the same industry but are at different stages of the supply chain for the same product or service
Merging of a lumber company and a bat company
What is crowdfunding?
Using social networking to appeal to potential investors
How do nonprofits help their community?
Provide resources, offer jobs, skills training, education programs
How do labor unions influence the economy?
Can increase the price of products from companies, obtain higher wages for its members, can cause work disputes(strikes)
What is the signaling theory?
Employers are willing to pay more to workers with certificates, degrees, or other indicators that “signal” superior knowledge or ability
How do mergers help businesses grow?
Add some additional facilities, enter a new market, gain expertise and intellectual property, less competition
What are some advantages and disadvantages of a partnership?
Advantages-easy to start, easy to manage, more efficient due to slightly larger size
Disadvantages-each partner is responsible for the actions of other partners, limited life, conflict between partners
How do nonprofits survive when they don't make any money?
Donations, volunteers, membership fees, grants from the government, tax exempt
Collective bargaining, Mediation-3rd party recommends a compromise, Arbitration-3rd party makes final decision, Fact Finding-3rd party determines the facts that relate to the dispute, Government seizure-government takes control of the company to keep it running, Injunction-court order not to act
What is the market theory of wage determination?
The pay or salary of a worker is determined by the supply and demand for the worker’s abilities and services in the market
How can mergers be bad for the economy?
Less competition for companies, allowing for companies to raise their prices and go unchallenged
Advantages and disadvantages of a sole proprietorship
Advantages-easy to start, relatively easy to manage, keep all profits, satisfaction of owning a business
Disadvantages-unlimited liability(responsible for company's debts), difficult to raise money, inefficiency if there are not enough employees, difficulty attracting qualified employees