Notes, summaries, assignments, exams, and problems for Economy

Human Resource Management in Small Businesses

The Small Business Administration (SBA) defines a small business as one that is independently owned and operated.

Country Culture in Global Business

A country's culture is the set of values, symbols, beliefs, languages, and norms that guide human behavior within that country.

The Strategic Planning Process

Corporate Mission

A company's mission is its continuing purpose or reason for being. The corporate mission is the sum total of the organization’s ongoing purpose.

Objective Setting

Objectives are the desired end results of any activity. Objectives should have four basic characteristics:

1. They should be expressed in writing.
2. They should be measurable.
3. They should be specific as to time.
4. They should be challenging

CHAPTER 9: MERGERS AND ACQUISITIONS

1. The Basic Forms of Acquisitions

• Merger or Consolidation
• Acquisition of Stock
• Acquisition of Assets

Merger vs. Consolidation

Merger

• One firm is acquired by another
• Acquiring firm retains name and acquired firm ceases to exist
• Advantage – legally simple
• Disadvantage – must be approved by stockholders of both firms

Consolidation

• Entirely new firm is created from combination of existing firms

Acquisition

A firm can be acquired by another firm or individual(s) purchasing voting shares of the firm’s stock

• Tender offer – public offer to buy shares
• Stock acquisition
  • No stockholder vote required
  • Can deal directly with stockholders, even if management is unfriendly
  • May be delayed if some target shareholders hold out for more

Finance Concepts: Ratios, Markets, and Risk

1. 1. Types of work in finance subareas

   Be able to recognize the types of work in subareas of finance such as investments, financial management, international finance, etc.

2. 2. Basic ratio categories to know

   Know the basics of the different ratio categories (e.g., liquidity, asset management, profitability).

   Liquidity — a ratio that measures the relationship between a firm's current assets and current liabilities.

3. 3. Average collection period ratio

   Know what the average collection period ratio measures.

   The average number of days between the date a credit sale is made and the date the purchaser pays for that sale.

4. 4. Time value of money concept

   Know that money in the future is worth less than money today.

   (Time

Forms of Business Organization

Sole Proprietorship

Introduction and Definition

Introduction, Definition

Characteristics

• Single ownership
• No separate legal entity
• Less legal formality
• Unlimited liability
• Secrecy
• Flexibility
• Risk
• No sharing of profit or loss

Advantages

• Easy to form and wind up
• No profit sharing
• Better control
• Secrecy
• Flexibility
• Personal touch

Disadvantages

• Unlimited liability
• Limited capital
• Lack of managerial expertise
• Lack of continuity

Joint Stock Company (JSC)

Joint Stock Company Overview

• Introduction
• Definition
• Features
• Advantages
• Disadvantages
• Types of companies
• Incorporation of JSC
• Legal documents
• Management

Memorandum vs. Articles of Association

• Definition
• Main object
• Subject matter
• Obligation
• Registration
• Significance
• Relationship
• Provision
• Legal status

Private

Clients, Customers, and Consumers

• Customer: A person who buys a product but is not a habitual client.
• Client: A person who usually buys a product.
• Consumer: A person who uses a product but does not necessarily pay for it.

Consumer Protection

Consumers are at the end of the distribution channel. A consumer purchases a product or service for direct use, not for reselling or for further production. The following stages in the distribution chain of goods from their production to the time they reach the end user.

The manufacturer is the party that makes the product. This is stage 1.

The wholesaler is the intermediary who buys products from the manufacturer and sells them on to the retailer. This is stage 2.

The retailer is the party who sells the product... Continue reading "Understanding Consumer Rights and Legal Protection in Spain" »

T.11 1. Is

the organization design of the MNE a function of its strategy or vice versa? Is both a function of its strategy and its design also drives its strategy. The objective of organization design is to provide, maintain, and develop the organizational structure that works best toward the achievement of firm’s strategic objectives into workable assignments of rights, duties, and responsibilities for the various units and individual positions that make up the organizational apparatus. The structure can represent a constraint on the firm’s mode of operations and in turn on its strategic thinking.

2. If you

were a top manager in a subsidiary in Mexico, would you expect similar to subsidiaries in London in authority, knowledge flow, or strategic... Continue reading "Global Organization Design and Integration Strategies" »

Chapter 15

Which one of the following statements is the MOST accurate?

D) A rise in the average value of transactions carried out by a household or a firm causes its demand for real money to rise.

If there is initially an

B) excess supply of money, the interest rate will fall, and if there is initially an excess demand, it will rise.

Which one of the following statements is the MOST accurate?

D) An increase in the money supply lowers the interest rate while a fall in the money supply raises the interest rate, given the price level and output.

An increase in

E) real output raises the interest rate while a fall in real output lowers the interest rate, given the price level and the money supply.

The aggregate real money demand schedule L(R,Y)

D) slopes... Continue reading "Effects of Money Supply on Interest Rates and Currency Values" »

Core Business Fundamentals and Economic Concepts

Defining Business and Its Resources

Business

Business is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs. The term refers to all such efforts within a society. A business is a particular organization that must perform three core activities:

• Be organized.
• Satisfy needs.
• Earn a profit.

Material Resources

These include raw materials used in the manufacturing process, as well as buildings and machinery.

Sales Revenue

The money a business receives from its customers in exchange for goods or services.

Profit

What remains after all business expenses have been deducted from sales revenue.

Economic Principles

Economy

The way in which people... Continue reading "Essential Business Concepts and Economic Definitions" »

Unit 2

1. Market Types: Understanding the Differences

Differences between the current market, potential market, objective market, and product-market.

• Current market: The demand for a specific product.
• Potential market: The maximum number of potential buyers.
• Objective market: The market a company targets with its products.
• Product market: Products regarded as substitutes.

2. Types of Markets Based on Competition

Types of markets according to the number of competitors.

• a) Monopoly
• b) Oligopoly
• c) Monopolistic Competition
• d) Perfect Competition

3. What is a Franchise?

What is a franchise? (Que es una franquicia?) A franchise is a contractual relationship that covers a wide range of service provisions, goods supply, leasing of a commercial name or brand on... Continue reading "Market Analysis: Current, Potential, and Objective Markets" »

IFRS for Small and Medium-Sized Entities (SMEs)

What are *not* the IASB's Objectives?

To strive for worldwide use of International Accounting Standards instead of national accounting standards.

What is the Primary Function of the IASB?

To develop and publish IFRS and strive for their worldwide use in general-purpose financial statements and other financial reporting.

What is the Primary Objective of IFRS?

IFRS sets out recognition, measurement, presentation, and disclosure requirements dealing with transactions and other events and conditions that are important in general-purpose financial statements.

What are the Major Differences Between IFRS and US GAAP?

Compared to US GAAP, IFRS are more principles-based, objective-oriented, and with emphasis on... Continue reading "IFRS for SMEs: Understanding Key Concepts and Applications" »