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


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


3. ______ is widely used today to apply computer graphics and mathematical modeling in the design of 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.
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).
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.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.


4. 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.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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.
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


5. 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.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
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.
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


6. A broader indicator of international trade than the balance of trade - the balance of __________ measure the total flow of money into the country minus the total flow of money out of the country - over some specified period of time.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.
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
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.


7. A regulatory _______ is any of a wide variety of administrative groups established to protect the rights of one or more group of stakeholders from the potentially harmful actions of business.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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).
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.


8. 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
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.


9. The ________ department plans the best way to hire employees - oversee their training - evaluate their performance - and compensate them.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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.
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.


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


11. Usually - human resources will use the job description to develop a ____ __________ - describing the skills - education - and previous experience that the job requires.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
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.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.


12. 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.
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.
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.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
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.


13. __________ 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.
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
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.


14. In the United States - _______ have traditionally been used not only to raise revenue for government - but also to encourage or discourage certain types of behavior - including the restriction of certain business activities.
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.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
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
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


15. 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.
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
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.
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.
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.


16. 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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17. 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.
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.
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.
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.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


18. 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
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.
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.
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.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


19. _____________ - 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.
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.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).


20. 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.
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.
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
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.
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.


21. 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.
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.
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
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.
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.


22. ___________ - or selling and shipping goods and services to another country - is one of the least risky forms of international business activity.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
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.
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.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.


23. 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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24. 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.
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.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
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


25. 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.
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.
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
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
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.


26. 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
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.
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 - 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.
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.


27. 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.
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
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
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
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.


28. 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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29. Quality __________ is a comprehensive system of policies - practices - and procedures implemented throughout a company to create and produce quality goods and services.
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
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.


30. 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.
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.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
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).
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.


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

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32. 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.
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.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
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


33. 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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34. 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.
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.
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).
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.
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.


35. Large companies increasingly are subcontracting work to small businesses through a process called _____________.
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.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.
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.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.


36. 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.
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
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.
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).
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.


37. When a country imports more than it exports - the resulting unfavorable trade balance is called a trade _______.
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.
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.
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.
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.


38. 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.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
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
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).
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.


39. 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.
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.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.
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


40. 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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41. 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 ________ ___________.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
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
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.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.


42. 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.
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
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.
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.


43. 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.
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.
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
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.
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.


44. 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.
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.
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
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
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


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

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46. Facilities specifically designed to house small businesses during their early growth phase are known as __________.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
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.
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.


47. An increasingly used recruiting strategy is for companies to hire ___________ employees to assess their on-the-job performance before hiring them permanently.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.


48. Roughly two-thirds of business founders start from scratch with new ventures - commonly called ________ ___________ company.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
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.
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.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.


49. Usually used for sales staff - a ____________ is a form of payment that pays employees a percentage of sales made.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
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.
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.
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.


50. ____________ 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.
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.
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.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.