business 101 key terms

Business

an organization that strives for a profit by providing goods and services desired by its customers

Goods

tangible items manufactured by businesses, ex: laptops

Services

intangible offerings of businesses that cannot be held, touched, or stored. Ex: physicians, lawyers, and airlines

business-to-business (B2B)

selling products and services between two businesses, rather than to a consumer

business-to-consumer

selling products and services directly to a consumer (the end user)

what is the traditional purpose of a business?

to MAXIMIZE the value of the firm to its owners—> to maximize shareholders’ wealth. 

**The best way to do this is by increasing profits

stakeholder

anyone involved with or affected by an organization—> shareholders, customers, community members, employees, suppliers, etc.

shareholder

owns a share of a company’s stock

could be an individual, a company, or an institution (financial, medical, educational, etc.)

**common stock shareholder: has the right to votr on major decisions made byy the company; hopes the stock value will increase and/or the company will pay a dividend

dividend

distribution of a company’s earnings to shareholders

profit

the difference between the amount earned and the amount spent in buying, operating, or producing something (revenue-expenses)

revenue

the dollar amount of a firm’s sales plus any other income it received from sources such as interest, dividends, and rents

*what you earn from selling goods and services

expense

what it costs you to operate your business

what are the functional areas of business?

accounting

finance

marketing

management information systems

supply chain management

management

*No matter what major you choose it is important to understand all of the functions of business and how they relate to one another

cross-functional terms

groups of people that belong to different functional/ expertise domains

value proposition

The unique benefit that a company provides to customers who buy its goods or services

what are information systems?

systems that allow users to leverage technology, information, and people to further organizational goals

information technology

the equipment and technology used to manage and process information

data

raw, unorganized facts that can be moved and stored

information

data that has been processed, interpreted, organized, structured, or presented in a way that makes it meaningful or useful

spreadsheet

a computer application that enables a user to save, sort, and manage data in an arranged set of rows and columns

*allows for entry, calculation, and storage of data in rows and columns

database

an organized collection of data stored and accessed electronically

database management system

soft