Questions and Answers of Foundations of Business

Summarize the process of planning for financial management.
Identify the services provided by banks and financial institutions for their business customers.
Describe the advantages and disadvantages of different methods of short-term debt financing.
Evaluate the advantages and disadvantages of equity financing.
Evaluate the advantages and disadvantages of long-term debt financing.
Many small business owners find it is difficult to obtain debt financing. What can small business owners do to improve their chances of getting a loan from a bank or other financial institutions?
How can a business owner or corporate manager use financial leverage to improve the firm’s profits and return on owners’ equity? Is there a potential danger of using financial leverage?
After its initial public offering (IPO), DoorDash started trading publicly on the New York Stock Exchange (NYSE) in December 2020. An IPO occurs when a corporation sells stock to the general public
Graeter’s still makes ice cream by hand, just like the founders did in 1870. But in every other respect, it’s a very different business from the mom-and-pop firm founded by the great-grandparents
One of the best-known sites for help managing your finances is Mint. The main reasons people like Mint is that it provides an easy way to track spending, create budgets, and monitor cash flow.
Suppose that for the past three years you have been repairing lawn mowers in your garage. Your business has grown steadily and you recently hired two part-time workers. Your garage is no longer
Financial managers are responsible for determining the best way to raise funds at the lowest possible cost, for ensuring that the funds are used to accomplish their firm’s goals and objectives, and
Explain why you should manage your personal finances.
Describe how the factors of safety, risk, income, growth, and liquidity affect your investment program.
Recognize how you can reduce investment risk.
Explain the reasons people choose conservative investments.
Identify the advantages and disadvantages of stocks, mutual funds, real estate, and more speculative investments.
Use financial information to evaluate investment alternatives.
Discuss how different investments are bought and sold.
During the first six months of 2020, investors experienced dramatic declines in the value of stocks, mutual funds, and other investments. The nation and the global economy also experienced declines,
Suppose that you have just inherited 50 shares of Facebook stock. What would you do with it, if anything?
Quicken, the best-selling personal finance software in the United States, was first released in 1983 by Intuit, a financial software company. Before Quicken, people had to visit multiple websites to
A growing number of people are turning to social media to share information and questions about investing. For example, Reddit is a news “aggregator” and discussion forum that allows people to
According to many financial experts, the logical place to begin the search for quality investments is to examine the products and services you use on a regular basis. This suggestion is based on the
Today many people choose a personal financial advisor to help develop an investment program that will help them achieve their financial goals. Not only is this career choice an opportunity to help
Explain how and why labor unions came into being.
Discuss trends in union membership.
Identify the main focus of several major pieces of labor-management legislation.
Explain the process involved in forming a union.
Identify the major issues covered in a union-management contract.
Explain the primary bargaining tools available to unions and management.
Uber Technologies, Inc., is a technology company offering ride-hailing, food delivery, and other services. Uber is a major player in the gig economy, which is characterized by independent contractors
SAG-AFTRA was created from the merger of two labor unions, the Screen Actors Guild and the American Federation of Television and Radio Artists, and today represents 160,000 members around the world.
For more than a century, American unions have played an important role in the workplace, striving to improve the working conditions and quality of life of employees. Today, federal laws cover many of
When applying for a job, whether emailing your résumé directly to a company or through an online job board like Monster, you should always include a cover letter. A well prepared cover letter
Discuss what you must do to be successful in today’s business world.
Identify the potential risks and rewards of business.
Describe the two types of economic systems: capitalism and command economy.
Identify the ways to measure economic performance.
Examine the different phases in the typical business cycle.
Outline the four types of competition.
Summarize the development of American business and the challenges that businesses and society will encounter in the future.
Zoom—a video conference technology company based in San Jose, California—not only broke into a highly competitive industry, but it also became an industry leader. Zoom’s success can be
Over the past few years, employees have been expected to function as productive team members instead of working alone. People often believe that they can work effectively in teams, but many people
In this chapter, entrepreneurship is defined as the willingness to take risks and the knowledge and ability to use the other factors of production efficiently. An entrepreneur is a person who risks
Discuss the factors that affect the level of ethical behavior in organizations.
Explain how organizations can encourage ethical decision making in business.
Describe how our current views on the social responsibility of business have evolved.
List the responsibilities businesses have to the public, especially with regard to consumer rights and public health.
Analyze how present employment practices are being used to counteract past abuses.
Describe the major environmental issues and businesses’ response to them.
What factors affect ethical behavior and choices? How can businesses use this knowledge to further ethical behavior in their organizations?
How can businesses encourage employees to make ethical choices?
Whole Foods Market, a natural supermarket chain, was founded in Austin, Texas, in 1980. At the time, the market for natural, unprocessed foods was small, but the company soon expanded to new cities
Lego has been making children’s toys since the 1930s and its iconic plastic building blocks since 1958. Company executives, wanting their products to have a lasting legacy, have launched several
A firm’s code of ethics outlines the kinds of behaviors expected within the organization and serves as a guideline for encouraging ethical behavior in the workplace. It reflects the rights of the
Business ethics has been at the heart of many discussions over the years and continues to trouble employees and shareholders. Stories about dishonesty and wrongful behavior in the workplace appear on
Explain the economic bases for and importance of international business.
Explore the methods by which a firm can organize for and enter into international markets.
Discuss the challenges businesses face when entering international markets, especially the restrictions nations place on international trade.
Identify the facilitators of international trade, including international trade agreements and international economic organizations working to foster trade.
Describe sources of export assistance.
Identify institutions that can help businesses and nations finance international business.
Some politicians think tariffs will reduce their countries’ trade deficits. Are they correct?
When the U.S. dollar is strong relative to other nations’currencies, what is the effect on imports and exports?
How can another country’s cultural and political climate influence a firm’s efforts to export there?
Honda Motor Company, a Japan-based multinational and the world’s largest motorcycle manufacturer, was founded by Soichiro Honda in 1937. Honda, a Japanese engineer and innovator, built Honda Motor
Although Nike was founded in the Pacific Northwest and still has its corporate headquarters near Beaverton, Oregon, the company has become a multinational enterprise. The firm employs more than
The United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA), went into effect in 2020. It has made a difference in trade among the countries and
Today, firms around the world need employees with special skills. In some countries, such employees are not always available, and firms then must search abroad for qualified applicants. One way they
Explain the different types of partners and the importance of partnership agreements.
Describe the advantages and disadvantages of partnerships.
Summarize how a corporation is formed.
Examine special types of businesses, including S corporations, limited liability companies, and not-for-profit corporations.
Discuss the purpose of a joint venture and syndicate.
Explain how growth from within and growth through mergers can enable a business to expand.
SC Johnson, a multi-billion-dollar family-owned business, is a multinational manufacturer of household and professional products. Windex, Pledge, Drano, Scrubbing Bubbles, and Shout are just a few
Not-for-profit organizations have used social media to redefine how they can get funding for their missions. There are some not-for-profits that exist totally online. Check out www.donorschoose.org
Suppose that you have decided to quit your job as an insurance adjuster and open a bakery. Your business is now growing, and you have decided to add a full line of catering services.This means more
Many people spend their entire lives working in jobs that they do not enjoy. Why? Often, it is because they have taken the first job, they were offered without giving it much thought.How can you
Describe the kinds of people who start small businesses.
Describe the advantages and disadvantages of operating a small business.
Examine some common reasons for business failure.
Discuss the importance of a business plan.
Explore franchising, including its types, growth, and advantages and disadvantages.
Describe methods entrepreneurs can use to finance their small business.
Explore how small businesses can take advantage of global markets.
What industries seem to be most attractive to entrepreneurs? Why do you think that is?
How do entrepreneurs differ from other people? What kinds of things motivate them?
What benefits do small businesses provide our economy? Given all these benefits, should society do more to protect them?
What are the most common reasons that small businesses fail? What steps should entrepreneurs take to protect their firms from failure?
What is the role of the business plan?
Why should small businesses engage in exporting?
When one hears the word entrepreneur, many faces come to mind. Elon Musk, Sara Blakely, Warren Buffet, Martha Stewart, Bill Gates, and Daymond John are just a few that might spring to mind. There are
Independent and family-owned for more than 150 years, Graeter’s has successfully made the transition from a 19th-century mom-and-pop ice cream business to a 21st-century corporation with three
American Express’s “Business Class” is a website that is designed for small-business owners (https://www.american express.com/en-us/business/trends-and-insights/). Take a look at the Business
A business plan is a written statement that documents the nature of a business and how that business intends to achieve its goals. Although entrepreneurs should prepare a business plan before
Many people dream of opening and operating their own businesses. Are you one of them? To be successful, entrepreneurs must have certain characteristics; their profiles generally differ from those of
Define management.
Describe the four basic management functions: planning, organizing, leading and motivating, and controlling.

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