Ch. 1 Pages 5-16 Flashcards
(44 cards)
What is a business?
Organizations that provide goods or services that are sold to earn profit.
What is a profit?
How do you find it?
Business’ Revenue-Expenses
What is customer choice/demand?
Consumers have freedom of choice so businesses take into account want/need.
Opportunity/Enterprise
Spotting promising opportunity and developing plans to capitalize.
What are benefits of business?
- Produce most of the goods/servics consumed.
- Employ most working people
- Contribute to quality of life/standard of living
What is the external environment?
Everything outside of an oranizations boundaries that might affect it. (The categories are: Domestic Business, Global Business, Technological, Political/Legal, Sociocultural, Economic)
Domestic Business Environment
Environment in which a firm conducts operations/derives revenue. Relationship with customers/suppliers, distiguished from competitors.
Global Business Environment
International forces that affect a business. Ex: trade agreements, international economic conditions, political unrest.
Technological Environment
Ways firms make value for constituents. Ex: getting machines/equipment, software, hardware
Constituent: Component/Part of Something
Political/Legal Environment
Relationship between business and government. Legal system defines what a business can/cannot do (ex: advertising practices, health and safety, hiring restrictions)
Sociocultural Environment
Customs, mores, values, and demographic. Characteristics of place where organization is functioning, determines goods/services and standards of business conduct (can be different one country to another)
Mores: Mo-rays-values that you have
Economic Environment
Relevant conditions that exist in the economic system a company operates. (Ex: when an economy does well, benefits and wages are higher and opposite)
Economic Systems
Nation’s system for allocating resources among citizens. (individuals and organizations)
Businesses operate differently in different countries.
Factors of Production
Resources used in the production of goods/services (labor, capital, entrepreneurs, physical resources, informational resources)
What is capital?
Funds needed to create/develop a business enterprise
What is an entrepreneur?
Individual who accepts the risks and opportunities involved in creating/operating a new business.
Physical Resources
Tangible items that organizations use in the conduct of business (can also be land)
Information Resources
Data and other info used by businesses. (Market Forecasts, Specialized knowledge of people, economic data)
What is a planned economy?
Economy that relies on a centralized government to control all/most factors of production and production/allocation decisions
Market Economy
Economy in which individuals control production/allocation decisions through supply/demand
Communism
Political system in which the government owns and operates all factors of production
What is a market?
Mechanism for exchange between buyers and sellers of a particular good/service
B Corporation
Businesses that seek to earn profits but performance is measured not only by profit/growth in stock price but impact on society/environment
What does STEEPLE stand for?
Social, Technological, Economic, Environmental, Political, Legal, Ethics
