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Mini-Case Gig Abite Is a Bright, Hard-Working Engineer Who Once Owned

question 269

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Mini-Case
Gig Abite is a bright, hard-working engineer who once owned a successful engineering consulting firm in his native country of Frinezia. Gig became discouraged by the high tax rates in Frinezia, so he immigrated to the United States eleven years ago. Soon after moving to the U.S., Gig again started his own business, which he named Giganeers Consulting. The company struggled at first, and almost went under midway through its second year. However, Gig never lost faith, the company survived, and it soon developed a growing reputation for quality work and dependable service. Giganeers began experiencing sustained growth early in its fourth year. In fact, Gig hired additional employees over the next few years to keep up with the increasing workload. His company, which started with only Gig and 2 other full time workers, now provides jobs for 43 full-time employees as well as many part time workers.
Despite these past successes, some clouds are on the horizon. The company recently suffered its first drop in business since its very early years. Gig is convinced that the problem is not with his company, but rather due to a downturn in the U.S. economy. He heard a national broadcast last week reporting that the value of the total output of final goods and services in the U.S. declined over the last quarter. The news anchor went on to state that many economists believe that this downward trend is likely to continue for several more months. Gig is concerned that he will have to lay off some of his employees if the economy doesn't improve. He hopes that the government does something soon to put the economy back on track.
-Gig started Giganeers to earn a profit, but by working hard and increasing his market share, he was able to create jobs for others. This is an example of the ______________ concept.

Understand and identify the differences between investment centers and profit centers.

Calculate investment turnover and understand its implications.

Calculate profit margin and understand its relevance in assessing divisional performance.

Understand the impact of negotiated transfer prices on operating income of divisions and the company as a whole.

Definitions:

Conscious Marketing

An approach to marketing that focuses on making positive decisions that consider the welfare of customers, employees, community, and the environment.

Marketplace

A space, physical or digital, where buyers and sellers come together to transact goods and services.

Corporate Social Responsibility

A corporate strategy that includes social and environmental considerations into the business's day-to-day operations and their engagement with stakeholders.

Cyclone Blenders

High-speed blending machines that use cyclonic action to pull ingredients towards the blades, ensuring a smooth and efficient blend.