Essex County College

Business Division
BUS 101 – Introduction to Business
Prof. Hospedales
Study Guide – Midterm Exam (Chapters 1 – 7)

Business/External environment (importance)

 Economic, legal, political, socio-cultural (demographics), competitors, technological etc.

 Diversity, diversity management, stakeholders
 Competitive environment (ways to compete: innovation, quality, speed, etc)
Business

 Revenue, profit, loss (formulas)

Economics

 Definition, microeconomics, macroeconomics

 Quality of life, standard of living; resource development
 Types of unemployment (frictional, cyclical, seasonal, structural)
 Thomas Malthus (beliefs)
 Adam Smith (contribution to system of capitalism)
Economic system

 Capitalism, socialism, communism (what they are; pluses and minuses of each)
 Income inequality (purpose of socialism)
Types of competition

 Oligopoly, monopolistic competition, monopoly, perfect competition etc.

Adam Smith – Father of modern economics

 Individual rights to ownership, entrepreneurship (invisible hand), free market, free trade, theory
of absolute advantage
Factors of production

 Land, labor, capital, technology, entrepreneurship, knowledge (definition and importance)

Free trade

 Definition, balance of trade, surplus (favorable), deficit (unfavorable), absolute advantage,

comparative advantage, countertrading (bartering)
 Trade barriers: tariffs (tax), quotas (quantitative restrictions), embargos (political reasons)
 Trade restrictions with China (reasons)
 Export Trading Companies (ETCs) – definition and purpose
Global business

 Outsourcing, offshore outsourcing (offshoring),

 Ways to enter foreign markets: licensing, exporting, franchising, contract manufacturing, joint
ventures, wholly owned subsidiary
 Economic integration: free trade area (NAFTA), economic union (EU –European Union)
 Ethnocentricity
Ethics and corporate social responsibility (CSR)

 Definition, ethical decision making (three questions), whistleblower, corporate social

responsibility, compliance vs. integrity-based ethics, corporate philanthropy, corporate policy,
insider trading
 Pros and cons of corporate social responsibility (CSR)
 Sarbanes-Oxley Act
Entrepreneurship

 Definition: entrepreneurship (pluses and minuses), business, smallbusiness incubators, enterprise

zones, mergers and acquisitions (purpose, types: vertical, horizontal, conglomerate, etc.),
intrapreneur, micropreneur, business plan (purposes)
Forms of business ownership (pluses and minuses)

 Corporation (C corporation), S Corporation, limited liability company (LLC), master limited

partnership (MLP), sole proprietorship, partnership, franchising, partnership (pluses and minuses
of each form)
 Definitions: small business (benefits), incubators, enterprise zones
Management and Leadership

 Leadership types/styles (contingency/situational, etc.)

 Four functions of management (planning, organizing, leading, controlling), types of planning
(strategic, contingency, crisis)
 Mission vs. vision (statements)
 Empowerment
 Skills needed by managers (technical, conceptual, human relations (soft skills)
 Goals vs. objectives