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. __________ occurs when a multinational corporation establishes facilities in a foreign country or in some other way invests money directly into foreign business enterprises.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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.
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.
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.


2. Financial compensation other than wages - salaries - and incentives is called employee ______________.
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.
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.
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.
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.


3. Large companies increasingly are subcontracting work to small businesses through a process called _____________.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.
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.
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.
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.


4. 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.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
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
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.
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.


5. The ________ department plans the best way to hire employees - oversee their training - evaluate their performance - and compensate them.
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.
Orientation - Although orientation programs can vary from an hour-long information session to 'integration' curriculums that last several months - they all are created with the intention of helping new employees understand their role in the organizat
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.
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.


6. 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.
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.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
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.
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.


7. Most industrialized countries have regulations against ________ - the practice of selling large quantities of a product at a price lower than the cost of production or below what the company would charge in its own home market.
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.
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.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
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.


8. A type of trade restriction - _________ limit the amount of a particular good that a nation will allow to be imported during a year.
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.
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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


9. 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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10. 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.
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.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.
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.
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.


11. A ________ is a business arrangement in which a small business obtains the rights to sell the goods or services of the supplier within a specific territory.
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.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
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.


12. 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 __________.
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.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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.


13. _______ _________ are investment specialists who raise pools of capital from large private and institutional sources in exchange for a portion of the ownership - with the objective of making a considerable profit on the investment within a relatively
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.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.
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.


14. 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.
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.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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.
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.


15. The majority of small businesses are what are known as ________ businesses. They are built around the personal and financial needs of an individual or family - and are not typically designed to grow into large enterprises.
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.
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.
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


16. 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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.
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.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.


17. 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 ___ _______.
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.
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.
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.
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.


18. In addition to the full body of laws that apply to individuals - companies must also comply to a subset of laws commonly referred to as __________ law.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.
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.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.


19. In planning tools such as PERT diagrams - the longest path through the network is known as the ________ path because it represents the minimum amount of time needed to complete the project.
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.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.
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
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.


20. 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.
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.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.


21. One common incentive program is the ________ _________ system - in which a company distributes a portion of its profits to employees. It encourages employees to work harder - since the more profits the company makes - the larger the compensation will
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.
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.
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.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


22. 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.
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.
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.
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
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


23. 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.
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.
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.
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.
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.


24. A ________ is a type of embargo that is politically motivated - banning trade with a particular nation.
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.
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
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.
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.


25. 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.
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.
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.
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.
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.


26. Customs _______ - or import taxes - vary with the product and its country of origin. They are designed to protect American businesses against foreign competition.
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.
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.
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
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


27. Facilities specifically designed to house small businesses during their early growth phase are known as __________.
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.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.
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.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.


28. 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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29. 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.
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
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
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.
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.


30. When a country imports more than it exports - the resulting unfavorable trade balance is called a trade _______.
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).
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.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
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.


31. Quality __________ is a comprehensive system of policies - practices - and procedures implemented throughout a company to create and produce quality goods and services.
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
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.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
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.


32. 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.
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.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
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.
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.


33. 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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34. Usually used for sales staff - a ____________ is a form of payment that pays employees a percentage of sales made.
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.
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.
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.


35. 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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36. Administering ___________ - or the combination of payments in the form of wages or salaries - incentive programs - employee benefits - and employer services - is one of the major responsibilities of the human resources department.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
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
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
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.


37. The ____________ ____________ theory states that a country should produce and sell to other countries those items it can produce economically - and trade for those it cannot produce efficiently or at a lower cost.

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38. In 1997 - the decision by Thailand and Indonesia to unpeg its currency from the U.S. dollar and use instead a _________ exchange rate system triggered a series of reactions around the world and ignited a worldwide economic crisis.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
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.
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.
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


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

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40. 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.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget
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.
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.
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.


41. 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
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
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
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
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.


42. A company's sequence of events that transforms resources (or inputs) into products and services is called the _________ process.
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.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.


43. One of the most important ways to persuade lenders and investors to finance your business is through preparing a ________ _____ - a written document that provides an orderly statement of a company's goals and how it intends to achieve those goals.
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
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
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
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.


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

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45. Most companies use a system of _______ control to determine the right quantity of various items to have on hand and to keep track of their location - use - and condition.
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.
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
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget


46. 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.
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.
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
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.


47. 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.
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
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.


48. ______ is widely used today to apply computer graphics and mathematical modeling in the design of products.
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
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
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).
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.


49. 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.
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
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.
Orientation - Although orientation programs can vary from an hour-long information session to 'integration' curriculums that last several months - they all are created with the intention of helping new employees understand their role in the organizat
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


50. Many companies now integrate all of the facilities - functions - and activities involved in the production of goods and services - from suppliers to customers - through a process called Supply ___________ Management
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.
Balance - The balance of trade is not necessarily an accurate indicator of a nation's competitiveness in the world market. Fluctuations in currency - intrafirm trade - and several other factors can obscure the overall picture.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.