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Business 009 textbook, Lecture notes of Business Ethics

Pasadena City CollegeBusiness Ethics

U can see the worksheet and note taking sheet is easy to understanding. Enjoy : )

Typology: Lecture notes

2019/2020

Uploaded on 08/29/2020

jameswijaya23
jameswijaya23 🇺🇸

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Chapter 1
Taking Risks and Making Profits within the Dynamic Business
Environment
Learning Objectives
LO 1-1 Describe the relationship between profit and risk, and show how businesses and nonprofit
organizations can raise the standard of living for all.
LO 1-2 Explain how entrepreneurship and the other factors of production contribute to the creation of wealth.
LO 1-3 Analyze the effects of the economic environment and taxes on businesses.
LO 1-4 Describe the effects of technology on businesses.
LO 1-5 Demonstrate how businesses can meet and beat competition.
LO 1-6 Analyze the social changes affecting businesses.
LO 1-7 Identify what businesses must do to meet global challenges, including war and terrorism.
LO 1-8 Review how past trends are being repeated in the present and what those trends mean for tomorrow’s
college graduates.
Business and Wealth Building
Business — Any activity that seeks to provide goods and services to others while operating at a profit.
Goods — Tangible products such as computers, food, clothing, cars, and appliances.
Services — Intangible products (that can’t be held in your hand) such as education, health care, insurance,
recreation, and travel.
Successfully filling a market need means you could make money for yourself.
Entrepreneur — A person who risks time and money to start and manage a business.
Revenues, Profits, and Losses
–Revenue — The total amount of money a business takes in during a given period by selling goods
and services.
–Profit — The amount of money a business earns above and beyond what it spends for salaries and
other expenses.
–Loss — When a business’s expenses are more than its revenues.
Matching Risk with Profit
–Risk — The chance an entrepreneur takes of losing time and money on a business that may not
prove profitable.
–Not all enterprises make the same amount of profit.
–Businesses take risks, but with big risks could come big profits.
Standard of Living and Quality of Life
–Standard of living — The amount of goods and services people can buy with the money they have.
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Download Business 009 textbook and more Lecture notes Business Ethics in PDF only on Docsity!

Chapter 1

Taking Risks and Making Profits within the Dynamic Business

Environment

Learning Objectives

LO 1-1 Describe the relationship between profit and risk, and show how businesses and nonprofit organizations can raise the standard of living for all. LO 1-2 Explain how entrepreneurship and the other factors of production contribute to the creation of wealth. LO 1-3 Analyze the effects of the economic environment and taxes on businesses. LO 1-4 Describe the effects of technology on businesses. LO 1-5 Demonstrate how businesses can meet and beat competition. LO 1-6 Analyze the social changes affecting businesses. LO 1-7 Identify what businesses must do to meet global challenges, including war and terrorism. LO 1-8 Review how past trends are being repeated in the present and what those trends mean for tomorrow’s college graduates.

Business and Wealth Building

Business — Any activity that seeks to provide goods and services to others while operating at a profit. Goods — Tangible products such as computers, food, clothing, cars, and appliances. Services — Intangible products (that can’t be held in your hand) such as education, health care, insurance, recreation, and travel. Successfully filling a market need means you could make money for yourself. Entrepreneur — A person who risks time and money to start and manage a business.

Revenues, Profits, and Losses

  • Revenue — The total amount of money a business takes in during a given period by selling goods and services.
  • Profit — The amount of money a business earns above and beyond what it spends for salaries and other expenses.
  • Loss — When a business’s expenses are more than its revenues.

Matching Risk with Profit

  • Risk — The chance an entrepreneur takes of losing time and money on a business that may not prove profitable.
  • Not all enterprises make the same amount of profit.
  • Businesses take risks, but with big risks could come big profits.

Standard of Living and Quality of Life

  • Standard of living — The amount of goods and services people can buy with the money they have.
  • The United States has one of the highest standards of living in the world.
  • Workers in other countries may make more money, but prices for products are higher.
  • Quality of life — The general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards that add to the satisfaction and joy that other goods and services provide.
  • High quality of life requires combined efforts of businesses, nonprofits, and government agencies.

Responding to the Various Business Stakeholders

  • Stakeholders — All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.
  • A primary challenge is to recognize and respond to the needs of stakeholders.
  • Outsourcing — Contracting with other companies (often in other countries) to do some of the functions of a firm, like production or accounting.
  • Many foreign companies are opening offices and factories in the United States, which is called insourcing.

Using Business Principles in Nonprofit Organizations

  • Nonprofit organization — An organization whose goals do not include making a personal profit for its owners or organizers.
  • Nonprofit organizations use financial gains to meet social or educational goals.

The Positives to Being an Entrepreneur

  • The freedom to succeed
  • Make your own decisions
  • Possible wealth

The Negatives to Being an Entrepreneur

  • The freedom to fail
  • No paid vacations
  • No health insurance

The Five Factors of Production

  • Factors of production — The resources used to create wealth.
  • The five factors:
    • Land (or natural resources)
    • Labor (workers)
    • Capital
    • Entrepreneurship
    • Knowledge
  • What makes rich countries rich today is entrepreneurship and knowledge.

The Business Environment

Business environment — The surrounding factors that either help or hinder the development of businesses.

  • Economic and legal environment
  • The Increase in the Number of Single-Parent Families
    • Growth of single-parent households has encouraged businesses to implement programs such as family leave and flextime.

The Global Environment

  • Globalization has grown due to efficient distribution systems and communication systems such as the Internet.
  • War and Terrorism
    • They have drained trillions of dollars from the U.S. economy.
    • Money was diverted to the war effort.
    • Adds to the cost of insurance and security.
  • How Global Changes Affect You
    • As businesses expand to serve global markets, new jobs will be created.
    • Rapid changes create a need for continuous learning.
  • The Ecological Environment
    • Climate change — The movement of the temperature of the planet up or down over time.
    • Greening — The trend toward saving energy and producing products that cause less harm to the environment.
    • Many companies say the evidence for climate change is overwhelming.
      • General Electric, Coca-Cola, Shell, Nestlé, DuPont, Johnson & Johnson, British Airways, Shanghai Electric

Progress in the Agricultural and Manufacturing Industries

  • In the 1800s, the agricultural industry led economic development.
  • Technology, like the harvester and cotton gin, made large-scale farming successful.
  • This led to fewer farmers with larger farms.
  • Industrialization in the 19th and 20th centuries moved jobs from farms to factories.
  • As technology improved productivity, fewer workers were needed in factories.

Progress in Service Industries

  • Services make up over 80 percent of the value of the U.S. economy.
  • Since the mid-1980s, the service industry generated almost all the increases in employment.
  • There are more high-paying jobs in service industries.

Your Future in Business

  • We’re in the midst of an information-based global and technical revolution.

Dynamic Business Environment

The Economic and Legal Environment:

  • Freedom of ownership
  • Contract laws
  • Elimination of corruption
  • Tradable currency
  • Minimum taxes and regulation

The Technological Environment:

  • Information technology
  • Databases
  • Bar codes
  • The Internet The Social Environment:
  • Diversity
  • Demographic changes
  • Family changes The Competitive Environment:
  • Customer service
  • Stakeholder recognition
  • Employee service
  • Concern for the environment The global business environment affects the economic, legal, and technological environments. Global competition and free trade affect the competitive environment.