Wherever we go, everyone is rushing and trying to get shortcuts and save time to do other more important things. DSST allows you not only to save time but also to save money. It works the following way: when an individual takes the DSST exam, you can transfer those credits to the university. Afterwards, the student doesn’t have to attend some classes, meaning you can save some time and attend other classes with juniors and/or seniors. Moreover, the student doesn’t have to pay for some courses (which topics were covered in the exam), which means you will save some money as well.
To provide you with more insights, this guide includes a thorough overview of the major concepts of the following topics:
• economic issues;
• international business;
• government and business;
• business ownership;
• entrepreneurship and franchise;
• management process;
• human resource management;
• production and operations;
• marketing management;
• financial management;
• risk management and insurance;
• management and information systems
The exam lasts 2 hours and includes 100 questions on the topics mentioned above.
Students will be graded on the basis of the following weighted components:
This section encompasses all the basic business concepts that a businessperson should know in order to be able to start an organized and successful business.
The first thing you will need to know is how the businesses are structured, i.e. the Forms of Business Ownership, such as Sole Proprietorship when there is no legal separation between the owner and the business, or partnerships such as General Partnership, when both risks and benefits of the business are shared among the owners, or Limited Partnership, the case when one person owns the company and is responsible for the liabilities, and there are limited partners with limited involvement. If you just do a little bit of research, you will find many more types of businesses and interesting stories of how to structure the business to be most efficient.
Next topic to be discussed is Government and Businesses, elaborating more on how the government can put constraints on businesses through taxes, laws or other regulatory methods and how it can help businesses grow, like in case of subsidies. Trade barriers should also be considered.
Another interesting topic is Economics of Business, which will discuss how markets influence each other (demand and supply, price takers and price makers) and how to find the equilibrium, what an opportunity cost and a tradeoff are, and the relationships of the businesses with the resources that are needed to produce goods and services: labor, capital and natural resources. The economic systems such as Capitalism, Socialism, & Communism will also be discussed.
Now that you know all the external factors of the business environment, it is time to define all the internal functions of a business.
Whatever happens in a business, there are some certain people who are responsible for what is happening in the organization. Yes, you are right! I’m talking about managers. Strategic management is the key for business to succeed. In this section, the concentration will be on understanding the fundamental management concepts.
The way the businesses define themselves in the market is due to the outstanding work done by the marketing team. Although many people confuse marketing with ads only, in this section, you will learn that marketing is much more than just promoting the business. The basics of marketing – the marketing mix or 4Ps (promotion, price, placement, product) will be discussed.
Interesting to know: Promoting a product/service does not only limit to creating and promoting ads. Uber was so successful not because of massive marketing campaigns but because of word-of-mouth. Uber offers free rides for its customers if they promote the services of Uber to their friends by providing referral codes.
Well, it’s not a secret that, in order to operate, a business needs funding. Financing, be it equity or debt financing, is for finding funds for business activities, purchases or investments. Banking terminology and functions are also essential parts of the finance.
Naturally, accounting is strongly interconnected with finance and is considered to be an essential function in a business. It should be conducted ethically, be it financial or managerial accounting. The fundamental concepts such as income statement, balance sheet, statement of cash flows, revenues, assets, liabilities, equity, dividends, and retained earnings should be emphasized.
Supply chain, inputs, processes, operations, and outputs are the part of the business called Production and Operations. Here also, you will learn to differentiate productivity, effectiveness, efficiency.
Interesting to know: One of the best interpretations of efficient production is Apple buying its iPad retina display manufactured by Samsung!
As everyone all around the world is talking – the 21st century is a century of technological revolution! And they are right. Technology is helping businesses to grow faster, automate a lot of processes, operate efficiently and cut costs. The study of the role of technology is covered in Management Information Systems.
Even if you have a brilliant idea for your startup, you will not be able to succeed if you do not have a right skilled team for your business. Concepts like recruitment, labor unions, job design, employee performance appraisal, employee retention, training and development, salaries and wages along with non-tangible rewards should be taken into account as being part of Human Resource Management.
Interesting to know: Employee rotation is always a refreshing process for employees. Moreover, it can be beneficial and informative, especially if a CEO wants to change his/her job and understand what and how others do. For example, employees of Amazon.com together with the CEO spend two days every two years working at the customer service desk. This is done to show all workers the customer service process.
Besides everything mentioned above, there is one more crucial thing in developing a business – the feature of being innovative! Innovation not only leads to great ideas, but it brings a lot of risks to start something totally new. Basically, that’s what Entrepreneurship is all about – being innovative, carrying risk and finding investors (VCs or angels) who will bear or share the risk with you and even guide you throughout the operations. Risk management and insurance should also be considered.
Part of understanding how and who businesses target and how this technological revolution affects today’s businesses.
The first topic is on Role of technology and e-commerce. We would define e-commerce along with its types (such as B2B, B2C, B2G, etc.), e-business and overall communication through internet.
Business ethics and social responsibility – business ethics, code of ethics, values, morals, fraud, harassment, discrimination, and social responsibility of a business should be discussed.
It’s not surprising that everything is leading to globalization and that affects the businesses the most. In global business environment, the topics will include globalization, economies of scale, outsourcing, tax and interest rates, trade barriers, worldwide supply and demand.
II. Production opportunities
III. Business activities
Correct Answer: All the options are correct
Explanation: Cost of money, a form of opportunity cost, is defined as the interest that could be earned if the amount invested in a business were instead invested in government bonds. All of the factors mentioned above can impact the value of the money invested.
Correct Answer: Cash
Explanation: The liquid asset is defined as an asset that can easily be exchanged for goods and services.
Correct Answer: Conducting a market research
Explanation: CSR now is considered as one of the most important parts of a business's operations. Although many people confuse it with the strategy of a business or think it is as narrow as just doing a charity, CSR is defined as the actions of a company aiming to create positive impact through its activities on the environment, communities, and stakeholders (employees, customers, etc.). Conducting market research is a part of a company's ordinary activities.
Correct Answer: Horizontal job loading, giving employees more tasks to perform
Explanation: If you are lucky enough to have a good and caring manager one day, you will definitely face a job enlargement! The main purpose of job enlargement is to give more tasks to an employee in order to decrease the boredom and motivate for further work. B is about job rotation. s C and D refer to job design and goal setting.
I. A security union in which only the union members can be hired is called a closed shop.
II. A security union in which the company can hire nonunion people, who must then join the union within a set period and pay dues, is defined as a union shop.
III. A security union in which only salespeople can work is called an agency shop.
IV. The employees who join an open shop must pay union dues.
Correct Answer: I, II and IV only
Explanation: Labor unions (mostly referred as security unions) are groups of employees who join together to accomplish the same goal, which is improving the economic and social well-being of its members. In an agency shop, the employees, even if they do not belong to the union, will still have to pay union dues. The main idea behind it is that the actions of the union benefit all employees.
Correct Answer: It measures both the quantity and the quality of the accomplished work while taking into account the resources that were used for that task
Explanation: One of the most confusing questions students face. A is performance effectiveness, while C is performance efficiency. D is done by HR or team manager for improvement purposes – not connected with the productivity definition. In simple terms, productivity is the ratio of inputs and outputs.
Correct Answer: Planning, organizing, leading, controlling
Explanation: A manager should do planning – setting performance objectives and deciding how to achieve them (key points – vision, mission, strategy, and goals). Next come organizing – arranging tasks, people, and other resources to accomplish the work. However, arrangements are not enough; a good manager should also be able to motivate employees to work towards the same goal. This one is leading. Finally, after all these steps a manager should control: tracking performance vs. goal and taking corrective measures when needed.
Correct Answer: subjective risk measures both actual and expected loss of a certain outcome
Explanation: The statement in D actually defines objective risk. Subjective risk, on the other hand, is the inner feeling or a mental state of an individual about a certain outcome.
Correct Answer: The prohibition of any kind of import or export with another country
Explanation: Trade barriers can take different forms. B is free trade, however, it only exists in theory. C is dumping, not really a pleasant thing to do to the competitors, although is legal under WTO if the government doesn't set any regulations. D is a subsidy, which is given to some specific companies by the government in order to get some benefits and keep the operations going. So, A. Embargo is considered to be the most extreme trade barrier.
Correct Answer: what a company owes
Explanation: A very easy question to . The A refers to assets and C is about revenues that the company will get. D – equity capital – is invested money in the firm. So, B, as a liability is a company's financial debt or obligations.
Textbooks are great as far as they go, but I’d generally recommend you opt for this exam guide instead. It tends to cut through the confusion and help you accelerate your learning process.
Ok, so the DSST website isn’t the most inviting, but it will give you the best approximation of the real exam experience. Also, the official practice test is quite affordable (currently just $5 per practice exam).
Another website with a very dated design, but as ancient as it looks, this is actually an incredibly valuable resource. Basically, you get a massive set of flashcards that you can use to study human resources management and to really solidify that knowledge so you’re ready for the exam.