DSST Introduction To Business

Instructions:

• Answer 50 questions in 15 minutes.
• If you are not ready to take this test, you can study here.
• Match each statement with the correct term.
• Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. A _____ ________ incentive plan rewards employees not solely on the basis of overall profits but in relation to achievement of goals such as cost savings or quality improvement.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.


2. Employees who receive _______ earn cash payment based on the number of hours the employee has worked or the number of units the employee has produced.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Wages. Unlike salaried workers - workers earning wages receive cash payment directly related to the number of hours worked or pieces produced. Wages provide an incentive to an employee to produce more in order to receive a higher paycheck.
Deficit - In 1999 - the U.S. trade deficit soared to record heights - due to a falloff in U.S. exports rather than a surge in foreign imports.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.


3. Many recent international trade agreements and organizations have supported the basic principles of ______ _______ - a theory that each nation will ultimately benefit the most if they freely trade with each other without restrictive measures.
Just In Time - A just-in-time system minimizes waste and keeps costs down. However - it requires careful coordination between manufacturers and suppliers in order to work effectively.
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Free Trade - The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) are both famous examples of organizations founded to support free trade. The WTO - in particular - has been a target for American protesters who fee


4. More extreme than a quota - an ________ completely bans the import or export of certain products.

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5. Usually - human resources will use the job description to develop a ____ __________ - describing the skills - education - and previous experience that the job requires.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Wages. Unlike salaried workers - workers earning wages receive cash payment directly related to the number of hours worked or pieces produced. Wages provide an incentive to an employee to produce more in order to receive a higher paycheck.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Commission - Depending on the company and position - a commission can be either the sole compensation or else an incentive payment made in addition to salary or wages.


6. In 1999 - eleven European countries turned over control of their individual monetary policies to the newly created European Central Bank. One of the major reasons for joining forces was the anticipated advantages that would come from creating a unifi

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7. The term _________ refers to the coordination of an organization's resources for the manufacture of goods or the delivery of services.

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8. Defined contribution plans - defined benefits plans - and 401(k) plans are all examples of _______ plans - the most popular type of retirement coverage in companies today.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Intrapreneurs - Work units led by intrapreneurs are formed to provide the parent company with creative ideas usually hindered by the red tape and procedures of a large-scale corporate environment.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.


9. The ultimate goal of a _________ ___________ is not to judge the individual employee but rather to improve their on-the-job performance. It lets employees understand how they are presently doing - instructs them on how they can improve performance -
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make
Incubators - Incubators are centers that provide small businesses with a professional setting and various resources - legal and accounting services - marketing support - etc. - they might need to get started.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.


10. Because competitors in an industry often have common objectives when it comes to government action - they commonly unite to form a __________ group in an attempt to persuade legislators to vote for their group's interest.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
Tying - Microsoft was recently found guilty of violating antitrust laws - in large part because the court considered the bundling together of Web browsers and operating systems to be a tying contract.
Outsourcing - Although outsourcing might give a company increased flexibility and additional expertise - it can also result in a loss of control over the work and a greater dependence on suppliers.


11. _____________ - or subcontracting work to outside companies - is a common staffing strategy by companies that lack specialized resources internally.
Outsourcing - Although outsourcing might give a company increased flexibility and additional expertise - it can also result in a loss of control over the work and a greater dependence on suppliers.
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.


12. An increasingly used recruiting strategy is for companies to hire ___________ employees to assess their on-the-job performance before hiring them permanently.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.


13. In the past few decades - some industries that were under strict government control have been opened up to competition through ___________ - or the abandonment or relaxation of existing regulations.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Franchise - In exchange for an initial fee and possibly monthly royalties - a buyer can obtain a franchise of a larger company and have the right to sell its goods and services.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.


14. Particularly with the recent increase in workplace violence - human resource departments are more carefully conducting ____________ ________ to verify all educational credentials and previous jobs - to account for any large time gaps between jobs - a
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay


15. The _____ is a government agency that serves as an invaluable resource and advocate for small businesses - often providing them with financial assistance - training - and a variety of helpful programs.
Sanction - Traditionally - a sanction has been used by the government as a forceful attempt to make a country change its behavior. However - sanctions are being used more sparingly today - as studies have shown them to be generally ineffective.
Agency - Some better known examples of a regulatory agency include the Occupational Safety and Health Administration (OSHA) - the Equal Employment Opportunity Commission (EEOC) - and the Environmental Protection Agency (EPA).
SBA - Among other services - the Small Business Administration (SBA) will back bank loans to qualified business owners - a guarantee that usually results in longer repayment terms.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to


16. One way in which two or more companies might jointly develop - produce - or sell products in the global marketplace is by forming a long-term partnership called a ________ ___________.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Deficit - In 1999 - the U.S. trade deficit soared to record heights - due to a falloff in U.S. exports rather than a surge in foreign imports.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.


17. Some countries practice an economic policy of ___________ - where they restrict international trade in order to shield a country's industries from foreign competition and the possible loss of jobs in those industries.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare


18. In today's customer-focused - quality-oriented economy - many current production systems use traditional mass production techniques to create customized goods and services - a system known as mass __________.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.


19. The first step in planning for a company's staffing needs is called ___________ - when the HR department determines the numbers and kinds of employees that will be needed in the company's future - and how many employees are currently available to mee

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20. ______ is widely used today to apply computer graphics and mathematical modeling in the design of products.
CAD - Computer-aided design (CAD) is just one of the major developments in manufacturing automation today. Others include computer-aided engineering (CAE) - computer-aided manufacturing (CAM) - and flexible manufacturing system (FMS).
Liability - Because many of these product liability lawsuits seem frivolous and excessive - many lawmakers are beginning to question the strictness with which the laws are interpreted.
FDI - A company that increases its involvement in foreign countries through establishing Foreign Direct Investment (FDI) might build marketing or production facilities - or even purchase existing firms.
Venture Capitalists - Small businesses that need large sums of investment (usually $10 million or more) and that have potential for rapid growth often turn to venture capitalists for financing.


21. __________ are cash payments that are linked either to specific individual - group - and company-wide goals; overall productivity; and company success.

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22. NAFTA is a controversial example of a ________ bloc - an organization of nations that removes barriers to trade among their members and also establishes uniform barriers to trade with nonmember nations.
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Business Plan - Not only does a business plan help sway potential investors - it also provides the company with an overall strategy and guides its operations


23. Since campaign laws limit the abilities of a business to donate money directly to a candidate - businesses will often instead funnel money through a _______.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem
Antitrust - Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.


24. One of the keys to an effective production process is to prepare an accurate production ________ that estimates how much of a company's goods and services must be produced in order to meet future demand.
Agency - Some better known examples of a regulatory agency include the Occupational Safety and Health Administration (OSHA) - the Equal Employment Opportunity Commission (EEOC) - and the Environmental Protection Agency (EPA).
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Forecast - Although a production forecast cannot be predicted with certainty - it is an essential tool for use in the planning - budgeting - and scheduling of resources.
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.


25. Once human resources has decided it needs to fill a particular position - it will then evaluate the requirements of the position through a formal - objective method called ___ _______.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.
Floating - Neither Thailand or Indonesia were ready when their currency devalued rapidly after switching to a floating exchange rate system. In such a system - the value of a currency is not determined in relation to more stable currencies - but in r
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.


26. The ________ department plans the best way to hire employees - oversee their training - evaluate their performance - and compensate them.
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
HR - The human resources (HR) department is generally in charge of hiring employees for a company - ensuring the quality of their job performance - and administering their compensation and benefits.
CAD - Computer-aided design (CAD) is just one of the major developments in manufacturing automation today. Others include computer-aided engineering (CAE) - computer-aided manufacturing (CAM) - and flexible manufacturing system (FMS).
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.


27. A _____ business can be defined as a company that is independently owned and operated - is not dominant in its field - and is relatively small in terms of sales and number of employees.
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.


28. ____________ is a common payment approach that uses wide pay grades. It allows today's flatter companies to reward employees without having to move them up a hierarchy.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.
Wages. Unlike salaried workers - workers earning wages receive cash payment directly related to the number of hours worked or pieces produced. Wages provide an incentive to an employee to produce more in order to receive a higher paycheck.
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.


29. Facilities specifically designed to house small businesses during their early growth phase are known as __________.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to
Incubators - Incubators are centers that provide small businesses with a professional setting and various resources - legal and accounting services - marketing support - etc. - they might need to get started.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.


30. In order to ensure that all new employees understand the company's goals - policies - and procedures - most organizations have ________ programs that help acclimate employees to their new work environment.

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31. One way to measure a nation's level of international trade is to determine its _________ of trade - The total value of the productions a nation exports minus the total value of the products it imports - over some period of time.

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32. __________ occurs when a multinational corporation establishes facilities in a foreign country or in some other way invests money directly into foreign business enterprises.
FDI - A company that increases its involvement in foreign countries through establishing Foreign Direct Investment (FDI) might build marketing or production facilities - or even purchase existing firms.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Antitrust - Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.


33. Similar to venture capitalists - ______ ________ tend to be wealthy individuals who are willing to loan smaller amounts of money and to stay involved with the company for a longer period of time.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.
Taxes - Laws surrounding the taxes of businesses have developed to such an extent that entire segments of accounting and legal professionals often help companies and individuals with their interpretation and compliance
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav


34. ___________ - or selling and shipping goods and services to another country - is one of the least risky forms of international business activity.
FDI - A company that increases its involvement in foreign countries through establishing Foreign Direct Investment (FDI) might build marketing or production facilities - or even purchase existing firms.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.


35. Saudi Arabia's ability to produce crude oil with fewer resources per unit of output than any other nation gives it an _________ _______ in crude oil production.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare
Benefits - Some of the more common forms of employee benefits include medical and dental insurance; vacation - holiday - and sick pay; stock options; and retirement benefits.


36. __________ is the process by which the government sets the ground rules and basic standards of proper business behavior - in order to prevent conflicts and facilitate the workings of the economic system.
Regulation - In most sectors of the economy - government regulation ensures that all competitors have an equal chance of producing a product - reaching the market - and making a profit.
POM - Production and operations management (POM) - sometimes just shortened to operations management - oversees all the activities involved in producing a firm's goods or services.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.


37. One of the practices restricted by the landmark Clayton Antitrust Act was that of the _____ contract - which attempts to force buyers to purchase unwanted goods along with goods actually desired.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Tying - Microsoft was recently found guilty of violating antitrust laws - in large part because the court considered the bundling together of Web browsers and operating systems to be a tying contract.
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.


38. Financial compensation other than wages - salaries - and incentives is called employee ______________.
Embargo- Although an embargo is usually established to protect a nation's industry from foreign competition - it can sometimes be done for other reasons. The U.S. - for example - bans the importation of toys with lead paint due to health reasons.
Lifestyle - Roughly 80 to 90% of small businesses are lifestyle businesses. The remainder are called high-growth ventures and are started with the intent of rapid expansion.
HR - The human resources (HR) department is generally in charge of hiring employees for a company - ensuring the quality of their job performance - and administering their compensation and benefits.
Benefits - Some of the more common forms of employee benefits include medical and dental insurance; vacation - holiday - and sick pay; stock options; and retirement benefits.


39. The rise and spread of the __________ is one of the major factors contributing to the dramatic increase in small businesses - as well as the number of employees who now telecommute.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Forecast - Although a production forecast cannot be predicted with certainty - it is an essential tool for use in the planning - budgeting - and scheduling of resources.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.


40. Specific items are subject to _____ taxes - regulatory taxes that are intended to help control potentially harmful practices or to help pay for public services used by taxpayers.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.
Excise - Gasoline - tobacco - and liquor are all subject to excise taxes. Federal excise taxes are also levied on certain services of a national scope - such as air travel and long-distance telephone calls.


41. As foreign markets continue to grow in importance - the number of ____________ - or companies with operations in more than one country - is likewise increasing.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to
Outsourcing - Although outsourcing might give a company increased flexibility and additional expertise - it can also result in a loss of control over the work and a greater dependence on suppliers.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.


42. More and more companies are using __________ agreements as a source of international revenue - allowing foreign companies to use their intellectual property in exchange for a royalty or fee.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Floating - Neither Thailand or Indonesia were ready when their currency devalued rapidly after switching to a floating exchange rate system. In such a system - the value of a currency is not determined in relation to more stable currencies - but in r
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.


43. The ____ ____ ____ system is one of the most used methods of inventory control and production planning today - making sure that materials arrive just when they are needed with minimal inventory and waste.
Assurance - Broader than more basic quality control approaches - a quality assurance system ensures that every stage of production - from design to final product - meets or exceeds preset quality standards.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
Just In Time - A just-in-time system minimizes waste and keeps costs down. However - it requires careful coordination between manufacturers and suppliers in order to work effectively.


44. Quality __________ is a comprehensive system of policies - practices - and procedures implemented throughout a company to create and produce quality goods and services.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Assurance - Broader than more basic quality control approaches - a quality assurance system ensures that every stage of production - from design to final product - meets or exceeds preset quality standards.
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare
Just In Time - A just-in-time system minimizes waste and keeps costs down. However - it requires careful coordination between manufacturers and suppliers in order to work effectively.


45. Customs _______ - or import taxes - vary with the product and its country of origin. They are designed to protect American businesses against foreign competition.
Excise - Gasoline - tobacco - and liquor are all subject to excise taxes. Federal excise taxes are also levied on certain services of a national scope - such as air travel and long-distance telephone calls.
Liability - Because many of these product liability lawsuits seem frivolous and excessive - many lawmakers are beginning to question the strictness with which the laws are interpreted.
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise
Business Plan - Not only does a business plan help sway potential investors - it also provides the company with an overall strategy and guides its operations


46. __________ is the term for the process of attracting appropriate applicants for an organization's jobs.

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47. To stimulate the innovation commonly found in small businesses - many large companies have started small enterprises run by ___________ - or people who create ideas and innovation of any kind from within an organization.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
Intrapreneurs - Work units led by intrapreneurs are formed to provide the parent company with creative ideas usually hindered by the red tape and procedures of a large-scale corporate environment.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
Commission - Depending on the company and position - a commission can be either the sole compensation or else an incentive payment made in addition to salary or wages.


48. Roughly two-thirds of business founders start from scratch with new ventures - commonly called ________ ___________ company.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.


49. A type of trade restriction - _________ limit the amount of a particular good that a nation will allow to be imported during a year.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.
Forecasting - After analyzing the company's future goals - the HR department begins planning the company's staffing needs by forecasting the supply and demand for employees.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.


50. Business owners pay as much as $150 billion every year due to product ________ lawsuits - which hold the producer or seller responsible for damages or injuries to the consumer.
Antitrust - Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.
Liability - Because many of these product liability lawsuits seem frivolous and excessive - many lawmakers are beginning to question the strictness with which the laws are interpreted.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav